EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
between
Viewer acquisition corp.,
and
ALLIANCE IMAGING, inc.
TABLE OF CONTENTS
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Page
Article Ithe merger...............................................................................................2
1.1 THE MERGER..............................................................................................2
1.2 CONSUMMATION OF THE MERGER..............................................................................2
1.3 CLOSING.................................................................................................3
1.4 EFFECTS OF THE MERGER...................................................................................3
1.5 CERTIFICATE OF INCORPORATION AND BYLAWS.................................................................3
1.6 DIRECTORS...............................................................................................3
1.7 OFFICERS................................................................................................3
Article IIEFFECTS OF THE MERGER...................................................................................4
2.1 EFFECT ON CAPITAL STOCK.................................................................................4
2.2 EXCHANGE OF CERTIFICATES................................................................................5
2.3 THE DEBT OFFER..........................................................................................6
2.4 CORPORATION STOCK OPTIONS...............................................................................7
2.5 MERGER PRICE............................................................................................8
Article IIIRepresentations and Warranties of THE CORPORATION......................................................8
3.1 ORGANIZATION, STANDING, QUALIFICATION AND POWER.........................................................8
3.2 AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.......................................................8
3.3 NO CONFLICTS; CONSENTS..................................................................................9
3.4 CAPITALIZATION..........................................................................................9
3.5 SUBSIDIARIES...........................................................................................10
3.6 SEC DOCUMENTS; FINANCIAL STATEMENTS; OTHER FINANCIAL INFORMATION.......................................11
3.7 ASSETS OTHER THAN REAL PROPERTY INTERESTS..............................................................11
3.8 REAL PROPERTY..........................................................................................12
3.9 INTELLECTUAL PROPERTY..................................................................................12
3.10 MATERIAL CONTRACTS.....................................................................................13
3.11 PERMITS................................................................................................14
3.12 TAXES..................................................................................................15
3.13 PROCEEDINGS............................................................................................15
3.14 BENEFIT PLANS..........................................................................................16
3.15 ABSENCE OF CHANGES OR EVENTS...........................................................................17
3.16 COMPLIANCE WITH APPLICABLE LAWS........................................................................18
3.17 ENVIRONMENTAL MATTERS..................................................................................19
3.18 EMPLOYEE AND LABOR MATTERS.............................................................................19
3.19 AFFILIATE TRANSACTIONS.................................................................................20
3.20 STATE TAKEOVER STATUTES................................................................................20
3.21 OPINION OF FINANCIAL ADVISOR...........................................................................20
3.22 CERTAIN ADDITIONAL REGULATORY MATTERS..................................................................20
3.23 MEDICARE/MEDICAID PARTICIPATION ACCREDITATION..........................................................21
3.24 BROKERS OR FINDERS.....................................................................................22
3.25 NO ADDITIONAL REPRESENTATIONS..........................................................................22
Article IVRepresentations and Warranties of Parent corp. and newco...............................................23
4.1 ORGANIZATION, STANDING, QUALIFICATION AND POWER........................................................23
4.2 AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY......................................................23
4.3 NO CONFLICTS; CONSENT..................................................................................23
4.4 LITIGATION.............................................................................................24
4.5 AVAILABILITY OF FUNDS..................................................................................24
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4.6 BROKERS OR FINDERS.....................................................................................24
4.7 NEWCO..................................................................................................25
Article VCovenants...............................................................................................25
5.1 CONDUCT OF BUSINESS....................................................................................25
5.2 ACCESS TO INFORMATION..................................................................................27
5.3 CONFIDENTIALITY........................................................................................28
5.4 EFFORTS TO CONSUMMATE..................................................................................28
5.5 EXPENSES...............................................................................................29
5.6 PUBLICITY..............................................................................................29
5.7 EMPLOYEE MATTERS.......................................................................................29
5.8 INDEMNIFICATION, EXCULPATION...........................................................................30
5.9 NO SOLICITATION........................................................................................30
5.10 FINANCIAL INFORMATION..................................................................................31
5.11 NOTICE OF CHANGES......................................................................................31
5.12 REGISTRATION RIGHTS AGREEMENT..........................................................................31
5.13 AFFILIATE AGREEMENTS...................................................................................31
5.14 LEASE AGREEMENTS.......................................................................................31
Article VI Conditions Precedent..................................................................................32
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION..................................................................32
6.2 CONDITIONS TO OBLIGATION OF NEWCO......................................................................32
6.3 CONDITIONS TO THE OBLIGATION OF THE CORPORATION........................................................34
Article VIITermination...........................................................................................35
7.1 TERMINATION............................................................................................35
7.2 EFFECT OF TERMINATION..................................................................................36
Article VIIIGeneral Provisions...................................................................................36
8.1 ASSIGNMENT.............................................................................................36
8.2 NO THIRD-PARTY BENEFICIARIES...........................................................................36
8.3 SURVIVAL...............................................................................................36
8.4 NOTICES................................................................................................36
8.5 INTERPRETATION; EXHIBITS AND SCHEDULES.................................................................37
8.6 COUNTERPARTS...........................................................................................38
8.7 ENTIRE AGREEMENT.......................................................................................38
8.8 AMENDMENTS AND WAIVERS.................................................................................38
8.9 SEVERABILITY...........................................................................................38
8.10 CONSENT TO JURISDICTION................................................................................39
8.11 LIMITATION OF DAMAGES..................................................................................39
8.12 GOVERNING LAW..........................................................................................39
8.13 WAIVER OF JURY TRIAL..................................................................................39
8.14 EQUITABLE REMEDIES.....................................................................................40
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AGREEMENT AND PLAN OF MERGER dated as of
September 13, 1999, between VIEWER ACQUISITION
CORPORATION, a Delaware corporation ("Newco") and
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ALLIANCE IMAGING, INC., a Delaware corporation
(the "Corporation"). Capitalized terms used but
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not defined herein have the meanings set forth in
Annex I hereto.
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WHEREAS, the Board of Directors of the Corporation (the "Board") and Newco
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have determined that the merger of Newco with and into the Corporation (the
"Merger") pursuant to Section 251 of the Delaware General Corporation Law
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("DGCL"), upon the terms and subject to the conditions set forth in this
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Agreement, would be fair and in the best interests of their respective
stockholders, and such Boards of Directors have approved this Agreement and such
Merger, pursuant to which each share of (A) Common Stock, par value $.01 per
share, of the Corporation (the "Common Stock") issued and outstanding
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immediately prior to the Effective Time (other than (i) shares of Common Stock
owned, directly or indirectly, by the Corporation or any of its Subsidiaries,
(ii) shares of Common Stock owned by Viewer Holdings LLC, a Delaware limited
liability company ("Holdings LLC"), a subsidiary of KKR 1996 Fund, L.P.
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("Parent"), Viewer Acquisition LLC, a Delaware limited liability company, a
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subsidiary of Holdings LLC ("Acquisition LLC") and Newco, a subsidiary of
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Acquisition LLC, (iii) the Retained Shares and (iv) Dissenting Shares) will be
converted into the right to receive the Cash Merger Price, and (B) Series F
Redeemable Preferred Stock, par value $.01 per share (the "Series F Preferred")
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issued and outstanding immediately prior to the Effective Time will be converted
into the right to receive the Preferred Merger Price;
WHEREAS, Apollo Investment Fund III, L.P., Apollo Overseas Partners III,
L.P., Apollo (U.K.) Partners III, L.P. and Newport Investment LLC (collectively,
the "Principal Stockholders") own 5,033,762 shares of Common Stock and 141,000
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shares of Series F Preferred;
WHEREAS, after the Board approved this Agreement and the Merger, the Merger
and this Agreement was approved by the written consent of the Principal
Stockholders as owners of at least a majority of the outstanding shares of the
Common Stock and by Newport Investment LLC as the owner of 141,000 of the
outstanding shares of Series F Preferred;
WHEREAS, Newco is unwilling to enter into this Agreement unless,
contemporaneously with the execution and delivery of this Agreement, each of the
Principal Stockholders enter into an agreement (each, a "Stockholder Support
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Agreement") providing for certain actions relating to the shares of Common Stock
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and Series F Preferred owned by them; and the Corporation has approved the
entering into by Holdings LLC and each Principal Stockholder of a Stockholder
Support Agreement, and such parties have, simultaneously with the execution of
this Agreement, executed and delivered a Stockholder Support Agreement;
WHEREAS, the Principal Stockholders are unwilling to authorize the
transactions contemplated by this Agreement or enter into a Stockholder Support
Agreement unless, contemporaneously with the execution and delivery of this
Agreement, Holdings LLC and the
Corporation enter into an agreement (the "Stockholders Agreement") with the
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Principal Stockholders and the Substitute Principal Stockholders that will hold
Retained Shares providing for certain minority shareholder protections, and such
parties have, simultaneously with the execution of this Agreement, executed and
delivered the Stockholders Agreement;
WHEREAS, the Board has approved and authorized for all purposes under the
DGCL, the Stockholder Support Agreements and the Stockholder Agreement;
WHEREAS, it is intended that the Merger be recorded as a recapitalization
for financial reporting purposes; and
WHEREAS, Newco and the Corporation desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, Newco
and the Corporation hereby agree as follows:
ARTICLE I
THE MERGER
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1.1 The Merger.
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Upon the terms and subject to the conditions hereof, and in accordance with
the relevant provisions of the DGCL, Newco shall be merged with and into the
Corporation as soon as practicable following the satisfaction or waiver, if
permissible, of the conditions set forth in Article VI. The Corporation shall
be the surviving corporation in the Merger (the "Surviving Corporation") and
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shall continue its existence under the laws of Delaware. From and after the
Effective Time, the separate corporate existence of Newco shall cease.
1.2 Consummation of the Merger.
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Subject to the provisions of this Agreement, as soon as practicable
following the satisfaction or waiver, if permissible, of the conditions set
forth in Article VI, the parties hereto shall cause the Merger to be consummated
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by filing with the Secretary of State of the State of Delaware a duly executed
certificate of merger (the "Certificate of Merger"), as required by the DGCL,
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and shall take all such other and further actions as may be required by law to
make the Merger effective as promptly as practicable. The Merger will become
effective at such time as the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware, or at such other time as is
permissible in accordance with the DGCL and as Newco and the Corporation shall
agree should be specified in the Certificate of Merger (the time the Merger
becomes effective being the "Effective Time").
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1.3 Closing.
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Prior to the filing of the Certificate of Merger, a closing (the "Closing")
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will be held at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxx, Xxx Xxxx (or such other place as the parties may agree). The Closing
shall take place on a date (the "Closing Date") to be mutually agreed upon by
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the parties.
1.4 Effects of the Merger.
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The Merger shall have the effects set forth in the applicable provisions of
the DGCL and as set forth herein.
1.5 Certificate of Incorporation and Bylaws.
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(a) At the Effective Time, and without any further action on the part
of the Corporation and Newco, the Restated Certificate of Incorporation of the
Corporation (the "Certificate of Incorporation") as in effect immediately prior
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to the Effective Time shall be amended so as to read in its entirety in the form
set forth as Exhibit A hereto, and as so amended, until thereafter changed or
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amended as provided therein or by applicable law, it shall be the certificate of
incorporation of the Surviving Corporation.
(b) At the Effective Time, and without any further action on the part
of the Corporation and Newco, the by-laws of the Corporation (the "By-laws") as
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in effect immediately prior to the Effective Time shall be amended so as to read
in their entirety in the form set forth in Exhibit B, and as so amended, shall
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be the by-laws of the Surviving Corporation, until thereafter changed or amended
as provided therein or by applicable law.
1.6 Directors.
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The directors of Newco at the Effective Time shall be the directors of the
Surviving Corporation until the earlier of their resignation or removal or until
their successors are duly elected or appointed and qualified.
1.7 Officers.
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The officers of the Corporation at the Effective Time shall be the officers
of the Surviving Corporation until the earlier of their resignation or removal
or until their successors are duly elected or appointed and qualified.
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ARTICLE II
EFFECTS OF THE MERGER
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2.1 Effect on Capital Stock
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As of the Effective Time, by virtue of the Merger and without any action on
the part of the Corporation, Newco or any holder of any shares of Common Stock,
Series F Preferred or any shares of capital stock of Newco:
(a) Common Stock of Newco. The common stock of Newco issued and
outstanding immediately prior to the Effective Time shall be converted, in the
aggregate, into a number of shares of the Common Stock, par value $.01 per
share, of the Surviving Corporation following the Merger equal to the quotient
of (i) the aggregate cash contributed to Newco prior to or at the Effective Time
in exchange for Newco Common Stock and retained by Newco through the Effective
Time divided by (ii) the Cash Merger Price.
(b) Cancellation of Treasury Stock. Each share of Common Stock that
is owned by the Corporation or by any Subsidiary of the Corporation shall
automatically be cancelled and retired and shall cease to exist.
(c) Common Stock of the Corporation. Except as otherwise provided
herein, each issued and outstanding share of Common Stock (other than any share
of Common Stock that is owned by Newco, Acquisition LLC or Holdings LLC and
Retained Shares, each of which shall remain outstanding, shares cancelled
pursuant to Section 2.1(b) and Dissenting Shares) (the "Merger Shares") shall be
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converted into the right to receive from the Surviving Corporation, in cash, the
Cash Merger Price.
(d) Series F Preferred. Each issued and outstanding share of Series F
Preferred shall be converted into the right to receive from the Surviving
Corporation, in cash, the Preferred Merger Price.
(e) Retained Shares. Each issued and outstanding Retained Share shall
convert into the right to retain one fully paid and nonassessable share of
Common Stock and each issued and outstanding share of Common Stock that is owned
by Newco, Acquisition LLC or Holding LLC shall convert into the right to retain
one fully paid and nonassessable share of Common Stock.
(f) Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, shares of Common Stock issued and outstanding immediately prior to
the Effective Time held by a holder (if any) who has the right to demand payment
for and an appraisal of such shares in accordance with Section 262 of the DGCL
(or any successor provision) ("Dissenting Shares") shall not be converted into a
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right to receive the Cash Merger Price (but shall have the rights set forth in
Section 262 of the DGCL (or any successor provision)) unless such holder fails
to perfect or otherwise loses such holder's right to such payment or appraisal,
if any. If, after the Effective Time, such holder fails to perfect or loses any
such right to appraisal, each such share of such holder shall be treated as a
Merger Share in accordance with Section 2.1(c). The Corporation shall give
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prompt notice to Newco of any demands received by the Corporation for
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appraisal of shares of Common Stock, and Newco shall have the right to
participate in and approve all negotiations and proceedings with respect to such
demands. The Corporation shall not, except with the prior written consent of
Newco, make any payment with respect to, or settle or offer to settle, any such
demands.
(g) Cancellation and Retirement of Common Stock and Series F
Preferred. As of the Effective Time, all shares of Common Stock (other than the
Dissenting Shares, the Retained Shares and the other shares described in Section
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2.1(e)) and all shares of Series F Preferred issued and outstanding immediately
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prior to the Effective Time, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each holder
of a certificate representing any such shares of Common Stock or Series F
Preferred shall, to the extent such certificate represents such shares, cease to
have any rights with respect thereto, except the right to receive cash to be
issued or paid in consideration therefor upon surrender of such certificate in
accordance with Section 2.2.
2.2 Exchange of Certificates.
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(a) The Corporation shall appoint an independent bank or trust
company, reasonably acceptable to Newco, to act as paying agent (the "Paying
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Agent"), which Paying Agent shall be responsible for payment of the Cash Merger
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Price and Preferred Merger Price for all Merger Shares and shares of Series F
Preferred. As soon as reasonably practicable as of or after the Effective Time,
the Surviving Corporation shall deposit with the Paying Agent, for payment in
accordance with this Article II, the funds necessary to pay the Cash Merger
Price and Preferred Merger Price for all Merger Shares and Series F Preferred.
(b) As soon as practicable after the Effective Time, each holder of an
outstanding certificate or certificates which prior thereto represented Merger
Shares or shares of Series F Preferred, upon surrender to the Paying Agent of
such certificate or certificates and acceptance thereof by the Paying Agent,
shall be entitled to a certificate or certificates representing the number of
Retained Shares, if any, represented by such certificate or certificates and the
amount of cash into which the number of Merger Shares or shares of Series F
Preferred previously represented by such certificate or certificates surrendered
shall have been converted pursuant to this Agreement. The Paying Agent shall
accept such certificates upon compliance with such reasonable terms and
conditions as the Paying Agent may impose to effect an orderly exchange thereof
in accordance with normal exchange practices, which shall include paying cash
into which the Merger Shares and shares of Series F Preferred shall have been
converted at the Effective Time to holders who have complied with such terms and
conditions prior to such time. After the Effective Time, there shall be no
further transfer on the records of the Corporation or its transfer agent of
certificates representing Merger Shares and shares of Series F Preferred which
have been converted, in whole or in part, pursuant to this Agreement, into the
right to receive cash, and if such certificates are presented to the Corporation
for transfer, they shall be canceled against delivery of such cash. If any
certificate for Retained Shares is to be issued or cash is to be remitted to a
name other than that in which the certificate for Merger Shares surrendered for
exchange is registered, it shall be a condition of such exchange that the
certificate so surrendered shall be properly endorsed, with signature guaranteed
or otherwise in proper form for transfer. Until surrendered as contemplated by
this Section 2.2(b), each certificate for Merger Shares and shares of Series F
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Preferred shall be deemed at any time after
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the Effective Time to represent only the right to receive upon such surrender
the Cash Merger Price for each Merger Share or the Preferred Merger Price for
each share of Series F Preferred. No interest will be paid or will accrue on any
cash payable in the Merger.
(c) All cash paid upon the surrender for exchange of certificates
representing Merger Shares and shares of Series F Preferred in accordance with
the terms of this Article II shall be deemed to have been paid in full
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satisfaction of all rights pertaining to the Merger Shares and shares of Series
F Preferred exchanged for cash theretofor represented by such certificates.
(d) Any cash deposited with the Paying Agent pursuant to this Section
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2.2 (the "Exchange Fund") which remains undistributed to the holders of the
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certificates representing Merger Shares and shares of Series F Preferred 180
days after the Effective Time shall be delivered to the Surviving Corporation at
such time and any holders of Merger Shares or shares of Series F Preferred prior
to the Merger who have not theretofore complied with this Article II shall
thereafter look only to the Surviving Corporation and only as general unsecured
creditors thereof for payment of their claim for cash.
(e) None of Newco or the Corporation or the Paying Agent shall be
liable to any person in respect of any cash from the Exchange Fund delivered to
a public office pursuant to any applicable abandoned property, escheat or
similar law. If any certificates representing Merger Shares or shares of Series
F Preferred shall not have been surrendered prior to one year after the
Effective Time (or immediately prior to such earlier date on which any cash in
respect of such certificate would otherwise escheat to or become the property of
any Governmental Entity), any such cash in respect of such certificate shall, to
the extent permitted by Applicable Law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto.
(f) The Paying Agent shall invest any cash included in the Exchange
Fund, as directed by the Corporation, on a daily basis.
(g) The Surviving Corporation shall pay all charges and expenses of
the Paying Agent.
(h) Notwithstanding anything to the contrary set forth in this
Agreement, Newco and the Surviving Corporation shall cause the Paying Agent to
pay by wire transfer at the Effective Time, in immediately available funds, the
full Cash Merger Price and the Preferred Merger Price payable to the Principal
Stockholders and to each other stockholder requesting payment by wire transfer
at such time in writing at least two Business Days prior to the Closing.
2.3 The Debt Offers.
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(a) Provided that this Agreement shall not have been terminated in
accordance with Section 7.1, the Corporation shall commence an offer to purchase
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(i) all of the outstanding aggregate principal amount of the Corporation's
Senior Subordinated Notes and (ii) at the request of Newco, all of the
outstanding principal amount of the FIRSTS, in each case, on the terms and
conditions as are reasonably acceptable to Newco, subject to the terms and
conditions set forth in the indenture governing the Existing Notes as amended to
the date hereof (collectively, the "Debt Offers"). The Corporation shall waive
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any of the conditions to either
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Debt Offer and make any other changes in the terms and conditions of such Debt
Offer as may be reasonably requested by Newco; provided that the Corporation
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shall not be required to waive any condition or make any change which may
require it to purchase any Existing Notes prior to the Effective Time. Except to
the extent required to comply with Applicable Law, the Corporation shall not,
without Newco's prior consent, waive any material condition to either Debt Offer
or make any changes to the terms and conditions of either Debt Offer. The
Corporation agrees that, subject to the terms and conditions of this Agreement,
including but not limited to, the conditions to either Debt Offer, at the
Effective Time, it will accept for payment and pay for the Existing Notes that
are the subject of such Debt Offer in accordance with the terms and conditions
of such Debt Offer.
(b) Promptly following the date of this Agreement, the Corporation
shall prepare, subject to advice and comments of Newco, an offer to purchase and
forms of letters of transmittal and summary advertisements, as well as all other
information and exhibits necessary to effect any Debt Offer (collectively, the
"Offer Documents"). All mailings to the holders of Existing Notes subject to a
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Debt Offer shall be subject to the prior review, comment and reasonable approval
of Newco. The Corporation will use its reasonable efforts to cause the Offer
Documents to be mailed to the holders of any of the Existing Notes. The
Corporation agrees promptly to correct any information in any Offer Document
that shall be or have become false or misleading in any material respect.
(c) Newco agrees to cooperate with the Corporation in any Debt Offer
and to provide such information and documents to the Corporation as are
reasonably requested by the Corporation in connection with such Debt Offer.
2.4 Corporation Stock Options.
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At the Effective Time, each unexpired and unexercised outstanding
Corporation Stock Option, other than those Corporation Stock Options set forth
on Schedule 2.4 (as it may be amended by Newco from time to time after the date
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hereof and with the consent of each option holder added thereto but not later
than the sixteenth day prior to the Closing Date) which shall continue to remain
outstanding following the Effective Time, whether or not then vested or
exercisable in accordance with its terms (the "Payout Options"), shall be
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cancelled and converted into the right to receive from the Surviving
Corporation, cash in an amount equal to the product of (a) the Cash Merger Price
minus the exercise price per share of Common Stock subject to such Payout
Option, times (b) the number of shares of Common Stock which may be purchased
upon exercise of such Payout Option (whether or not then exercisable), less all
applicable tax withholding. Prior to (but effective at) the Effective Time, the
Corporation shall use its reasonable efforts to (i) obtain any consents from all
holders of Corporation Stock Options and (ii) make any amendments to the terms
of such stock option or compensation plans or arrangements that, in the case of
either clause (i) or (ii), are necessary to give effect to the transactions
contemplated by this Section 2.4. At the Effective Time, the Corporation shall
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terminate all stock option plans and other arrangements granting right in the
Common Stock, other than the stock option plan set forth on Schedule 2.4, which
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shall continue to remain in effect following the Effective Time.
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2.5 Merger Price.
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At least two days prior to the Closing Date, the Corporation shall deliver
to Newco a certificate which sets forth the estimated Cash Merger Price. If
Newco objects to any calculation set forth therein, the parties will cooperate
in good faith to resolve any disputed items prior to the Effective Time.
Article III
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
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For purposes of this Agreement, the phrase "to the knowledge of the
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Corporation," or other language of similar effect, shall mean to the actual
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knowledge, without investigation or inquiry, of Xxxxxxx X. Xxxxxx, Xxxxxxx X.
Xxxx, Xxxxxxx Xxx or Xxxxxxx X. Xxxxxxxx, Xx. The exceptions, modifications,
descriptions and disclosures in any Schedule or Exhibit hereto are exceptions to
each representation and warranty set forth in this Agreement if a prudent Person
in the applicable party's position would reasonably conclude that such
exception, modification, description or disclosure would constitute an
exception, modification, description or disclosure to the applicable
representation and warranty if included in the appropriate Schedule or Exhibit.
Disclosure of any items not otherwise required to be disclosed shall not create
an inference of materiality. The Corporation hereby represents and warrants to
Newco as of the date hereof and as of the Closing Date as set forth below:
3.1 Organization, Standing, Qualification and Power.
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The Corporation is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full corporate power and
authority to own, lease and operate its properties and to carry on its business
as presently conducted. The Corporation is duly qualified and in good standing
to do business in each jurisdiction in which the property owned or leased or
operated by it or by the nature of business conducted by it makes such
qualification necessary, except where the failure to be so qualified is not
reasonably likely to have a Material Adverse Effect. The Corporation has made
available to Newco or its counsel, representatives or advisors, complete and
correct copies of its certificate of incorporation, as in effect on the date
hereof and in effect immediately prior to the Effective Time, and the by-laws,
as amended to the date hereof.
3.2 Authority; Execution and Delivery; Enforceability.
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The Corporation has all corporate power and authority to execute this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
the Corporation of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of the Corporation, including all required
stockholder approval, and no other corporate proceedings on the part of the
Corporation are necessary to authorize the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated hereby
(other than notice to stockholders pursuant to Sections 228 and 262 of the
DGCL). The Corporation has duly executed and delivered this Agreement and this
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Agreement constitutes a legal, valid and binding obligation of the Corporation,
enforceable against it in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or other similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles.
3.3 No Conflicts; Consents.
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(a) Except as set forth in Schedule 3.3, the execution and delivery by
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the Corporation of this Agreement and the consummation of the transactions
contemplated hereby does not conflict with, or result in any violation of or
default under, or give rise to any increase payment, loss of a material benefit,
a requirement of prepayment or offer to purchase any debt, a right of
termination, cancellation or acceleration of any obligation, or result in the
creation of any Lien (other than a Permitted Lien) upon any of the assets owned
or used by the Corporation or any of its Subsidiaries under, any provision of
(a) the Certificate of Incorporation or By-Laws, (b) any Contract to which the
Corporation or any Subsidiary is a party or (c) any judgment, writ, injunction,
order or decree ("Judgment") or Applicable Law applicable to the Corporation,
other than, in the case of clauses (b) and (c) above, any such conflicts,
violations, defaults, rights or Liens that, individually or in the aggregate,
would not have a Material Adverse Effect.
(b) Except as set forth in Schedule 3.3, no material consent,
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approval, Permit, order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required to be obtained or made by or
with respect to the Corporation or any of its Subsidiaries in connection with
the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby, other than (i) compliance with and filings
under the HSR Act, (ii) compliance with and filings and notifications under
applicable Environmental Laws, (iii) those the failure of which to obtain or
make would not have a Material Adverse Effect, (iv) those that have been
obtained, (v) those that may be required solely by reason of Newco's (as opposed
to any other third party's) participation in the transactions contemplated
hereby and (vi) filings required pursuant to the indenture governing the
Existing Notes or applicable securities laws.
3.4 Capitalization
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The authorized capital stock of the Corporation consists of 10,000,000
shares of Common Stock, consisting of 9,500,000 shares of voting common stock,
par value $.01 ("Voting Common"), 500,000 shares of non-voting common stock, par
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value $.01 ("Non-Voting Common"), and 500,000 shares of preferred stock,
-----------------
undesignated as to series ("Preferred Stock"), of which 300,000 shares have been
---------------
designated and authorized by the Board as Series F Redeemable Preferred Stock,
$.01 par value. At the close of business of the date hereof, (i) 5,506,651
shares of Voting Common, 242,898 shares of Non-Voting Common and 150,000 shares
of Series F Preferred are validly issued and outstanding, fully paid and
nonassessable, (ii) no shares of Voting Common, Non-Voting Common or Series F
Preferred are held by the Corporation in its treasury and (iii) 842,033 shares
of Common Stock were reserved for issuance upon the exercise of options granted
or available for grant under the Corporation Stock Option Plans. Except as set
forth above, except for shares issued since the close of business on the
Business Day immediately preceding the date hereof upon the exercise of any then
outstanding Corporation Stock Option, since such date no shares of capital stock
or other voting securities of
-9-
the Corporation have been issued or reserved for issuance. All outstanding
Shares and shares of Series F Preferred are duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights. There are no
bonds, debentures, notes or other indebtedness of the Corporation having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which stockholders of the Corporation may vote.
Except for Corporation Stock Options with respect to 759,932 Shares, there are
no securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Corporation is a party or
by which it is bound obligating the Corporation to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Corporation or obligating the Corporation to
issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. Except as set forth in
the Series F Preferred Certificate of Designations relating to the Corporation's
Series F Preferred or Schedule 3.4, there are no outstanding contractual
------------
obligations of the Corporation torepurchase, redeem or otherwise acquire any
shares of capital stock of the Corporation.
3.5 Subsidiaries.
------------
(a) Except as set forth on Schedule 3.5, all of the outstanding shares
------------
of capital stock of Subsidiaries are owned of record and beneficially by the
Corporation, free and clear of all Liens other than Permitted Liens.
(b) Except as set forth on Schedule 3.5, since June 30, 1999, no
------------
shares of capital stock or other voting securities of any Subsidiary were
issued, reserved for issuance or issuable. All outstanding shares of capital
stock of Subsidiaries are, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of any Subsidiary having the right to
vote (or convertible into, or exchangeable for, securities having the right to
vote) on any matters on which stockholders of Subsidiaries may vote. There are
no securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Corporation or any
Subsidiary is a party or by which any of them is bound obligating the
Corporation or any Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of any Subsidiary or obligating the Corporation or any Subsidiary to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations of the Corporation or any Subsidiary to repurchase,
redeem or otherwise acquire any shares of capital stock of any Subsidiary.
There are no voting trusts, proxies or other agreements or understandings to
which the Corporation or its Subsidiaries is a party or by which the Corporation
or any of its Subsidiaries is bound with respect to the voting of any shares of
capital stock, or any other equity or voting security or interest of the
Corporation or any of its Subsidiaries. Except for the Corporation's interest
in the Subsidiaries or as set forth in Schedule 3.5, neither the Corporation nor
------------
any Subsidiary owns directly or indirectly any interest or investment in the
form of equity in, and neither the Corporation nor any Subsidiary is subject to
any obligation or requirement to provide for or to make any investment in, any
Person (other than financially insignificant holdings of publicly reporting
companies held in order to obtain filings).
-10-
3.6 SEC Documents; Financial Statements; Other Financial Information.
----------------------------------------------------------------
(a) The Corporation has filed with the SEC all reports, forms,
schedules and statements and other documents required to be filed by it since
December 18, 1997 (the "SEC Documents"). As of their respective filing dates,
(i) the SEC Documents complied in all material respects with the requirements of
the Securities Act, or the Securities Exchange Act of 1934, as amended
("Exchange Act"), as the case may be, and the rules and regulations of the
Securities and Exchange Commission ("SEC") promulgated thereunder applicable to
---
such SEC Documents, and (ii) none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein under applicable federal securities laws in order to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading. The financial statements included in the SEC
Documents complied, as of their respective filing dates as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with GAAP (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present,
in all material respects, the consolidated financial position of the Corporation
and its Subsidiaries as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
(b) Neither the Corporation nor any of its Subsidiaries has any ,debts
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) that would be required to be reflected on, or disclosed or
reserved against in, a consolidated balance sheet of the Corporation and its
Subsidiaries or in the notes thereto, prepared in accordance with GAAP
consistently applied, except for debts, liabilities or obligations (a) that were
so reserved on, or disclosed or reflected in, the consolidated balance sheet of
the Corporation and its Subsidiaries as of June 30, 1999 and the notes thereto,
included in the Quarterly Report on Form 10-Q of the Corporation for the quarter
then ended, or the consolidated balance sheet of the Corporation and its
Subsidiaries as of December 31, 1998 and the notes thereto, included in the
Annual Report on Form 10-K of the Corporation for the year then ended, (b)
arising in the ordinary course of business since June 30, 1999, (c) incurred in
connection with the purchase of equipment or (d) that have not had and are not
reasonably likely to have a Material Adverse Effect.
3.7 Assets Other than Real Property Interests.
-----------------------------------------
Each of the Corporation and its Subsidiaries has good and valid title to
all of the assets and properties reflected on the latest balance sheet included
in the SEC Documents or acquired subsequent thereto (except for assets and
properties sold, consumed or otherwise disposed of in the ordinary course of
business since the date thereof and except for real property or interests in
real property, such items being the subject of Section 3.8), free and clear of
-----------
all Liens, except Permitted Liens and except as set forth in Schedule 3.7. The
------------
properties and assets of the Corporation and its Subsidiaries are in sufficient
repair and operating condition for the conduct of the business of the
Corporation and Subsidiaries as presently conducted.
-11-
3.8 Real Property.
-------------
(a) Except as set forth on Schedule 3.8, neither the Corporation nor
------------
any of its Subsidiaries owns in fee any real property (the "Owned Real
----------
Property"). Schedule 3.8 sets forth as of the date hereof, a complete and
------------
correct list of all real property leases, subleases, licenses and use or
occupancy ("Leases") agreements pursuant to which the Corporation or any of its
------
Subsidiaries is the lessee, sublessee, licensee, user or occupant of real
property, or interests therein, requiring annual payments in excess of $150,000
(the "Leased Property"). Each of the Corporation and its Subsidiaries has good
---------------
and valid title to the leasehold estate or other interest created under its
respective leases, free and clear of any Liens other than Permitted Liens. Each
Lease is valid or in full force and effect without any material default
thereunder by the Corporation or such Subsidiary, except failures to be in full
force and effect and defaults which, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect.
(b) The Corporation has not received notice that the location,
construction, occupancy, operation or use of the buildings located on the Leased
Property violates any restrictive covenant or deed restriction or any other
Applicable Laws, except for such violations or restrictions which, individually
or in the aggregate, is not reasonably likely to have a Material Adverse Effect.
3.9 Intellectual Property.
---------------------
The Corporation and each Subsidiary owns, or is validly licensed or
otherwise has the right to use, as applicable, all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service xxxx rights, copyrights, trade secrets and other proprietary
intellectual property rights and computer programs that are used in the conduct
of the business of the Corporation and its Subsidiaries as now operated
(collectively, "Intellectual Property Rights") other than those Intellectual
----------------------------
Property Rights in which the failure to own, license or have the right to use
would not be reasonably likely to have a Material Adverse Effect. Schedule 3.9
------------
sets forth a description of all material patents, trademarks and copyrights and
applications therefor owned by or licensed to the Corporation or its
Subsidiaries that are used in the conduct of the business of the Corporation or
its Subsidiaries as now operated (excluding customary commercial software
licenses). No claims are pending or, to the knowledge of the Corporation,
threatened against the Corporation or any of its Subsidiaries that the
Corporation or any of its Subsidiaries is, and to the knowledge of the
Corporation, neither the Corporation nor any Subsidiary is, infringing or
otherwise adversely affecting the rights of any Person with regard to any
Intellectual Property Right, except for claims, infringements or adverse effects
which, individually, or in the aggregate, is not reasonably likely to have a
Material Adverse Effect. To the knowledge of the Corporation, no Person is
infringing the rights of the Corporation with respect to any Intellectual
Property Right in any manner that is reasonably likely to have a Material
Adverse Effect. The Corporation has not licensed, or otherwise granted, to any
Person, any rights in or to any Intellectual Property Rights and none of the
Corporation or its Subsidiaries has any obligation to grant licenses or other
right to any of the material Intellectual Property Rights to any other Person,
except for such licenses, grants or obligations that are not reasonably likely
to have a Material Adverse Effect. The Corporation is not, nor will it be as a
result of the execution and delivery of this Agreement or the performance of its
obligations under this Agreement, in breach of any license, sublicense or other
agreement
-12-
relating to the Intellectual Property Rights, except for breaches which,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect. To the Corporation's knowledge, the information technology
systems of the Corporation and its Subsidiaries (including but not limited to
software), equipment and software which are used in business as currently
conducted by Corporation and its Subsidiaries, are (or will be prior to December
31, 1999) "year 2000 compliant" in that they are (or will be prior to December
31, 1999) designed to be used prior to, during and after the calendar year 2000
A.D., except for such failure to be "year 2000 complaint" which, individually or
in the aggregate, would not have and is not reasonably likely to have a Material
Adverse Effect.
3.10 Material Contracts.
------------------
(a) Except as set forth in Schedule 3.10, as of the date hereof,
-------------
neither the Corporation nor any of its Subsidiaries is a party to or bound by
any Contract that is used in the operation or conduct of its business and that
is:
(i) a Contract not to compete against the diagnostic imaging
systems and related radiology services business of any third party or a
Contract that restricts the Corporation or any of its Subsidiary or
Affiliates from entering or conducting any line of business in any location
at any time, except for restrictions on providing imaging services
contained in Contracts with hospitals, clinics, medical or healthcare
providers or other customers and except for Contracts with holders of
equity interests in Subsidiaries and other Persons in which the Corporation
holds directly or indirectly equity interests, none of which has had or is
reasonably likely to have a Material Adverse Effect);
(ii) a Contract (other than Benefit Plans) with any shareholder,
officer, director or Affiliate of the Corporation requiring annual payments
in excess of $150,000;
(iii) a lease or similar Contract in connection with tangible
personal property requiring annual payments in excess of $200,000;
(iv) a Contract under which the Corporation or such Subsidiary
has directly or indirectly guaranteed indebtedness of any other Person,
other than endorsements for the purpose of collection in the ordinary
course of business that, individually, is in excess of $100,000 and other
than guarantees of any indebtedness of the Corporation or any Subsidiary;
(v) a Contract granting a Lien upon any assets of the
Corporation, the foreclosure of which would have a Material Adverse Effect;
(vi) a Contract involving an annual payment to or by the
Corporation or such Subsidiary of more than $150,000 (unless terminable
without payment or penalty) other than sales orders and purchase orders
entered into in the ordinary course of business after the date of this
Agreement;
(vii) a material Contract that relate to services provided by
the Corporation to or at hospitals, clinics, medical or healthcare
providers or other customers or services paid for by health maintenance
organizations or other third party payors;
-13-
(viii) a material Contract that relates to the construction,
reconstruction, maintenance, transportation or use of Magnetic Resonance
Imaging equipment which will require payments in excess of $250,000;
(ix) a Contract for indebtedness for borrowed money in excess of
$200,000; or
(x) a Contract other than as set forth above to which the
Corporation or such Subsidiary is a party, the absence of which would have
a Material Adverse Effect.
(b) Except as set forth in Schedule 3.10(b), neither the Corporation
----------------
nor any Subsidiary is and, to the knowledge of the Corporation (which for
purposes, hereof, shall also include the actual knowledge of Xxx Xxxxxxx,
without inquiry or investigation), no other party is in violation of or in
default under (nor does there exist any condition affecting the Corporation or
any Subsidiary, or to the Corporation's knowledge, other parties to the material
Contracts which upon the passage of time or the giving of notice or both is
reasonably likely to cause such a violation of or default under) any material
Contract to which it is a party or by which it or any of its properties or
assets is bound (it being understood that any non-payment shall be deemed not to
be a violation of or default under any such Contract if the financial statements
included in the most recently filed SEC Documents reflects, in the aggregate,
adequate reserves for doubtful accounts as of the date of filing). Each
material Contract constitutes a valid and binding obligation of the Corporation
and/or Subsidiary party thereto and, to the knowledge of the Corporation, each
other party thereto, enforceable against such other party in accordance with its
terms, except if the failure to be valid, binding and enforceable has not had
and is not reasonably likely to have a Material Adverse Effect. No party has
given any written notice or to the knowledge of the Corporation, oral notice of
termination or cancellation of any material Contract or that it intends to
assert a breach of, or seek to terminate or cancel, any material Contract as a
result of the transactions contemplated hereby, in each case that has had or is
reasonably likely to have a Material Adverse Effect. Copies of all Contracts
listed in Schedule 3.10 have been made available to Newco or its representatives
-------------
or agents.
3.11 Permits.
-------
Except as set forth in Schedule 3.11, as of the date hereof, each of the
-------------
Corporation and its Subsidiaries holds all material certificates, franchises,
consents, licenses, permits, notices, rights, authorizations and approvals
(including, without limitation, all certificates of need) from all Governmental
Entities as are necessary for it to own, lease or operate its properties and
assets and to conduct the business of the Corporation and such Subsidiaries as
currently conducted as of the date hereof (collectively, "Permits"), except
-------
where the failure to have any such Permit, individually or in the aggregate, is
not reasonably likely to have a Material Adverse Effect. Schedule 3.11 contains
-------------
a list of all material Permits (including, without limitation, all certificates
of need), and copies thereof have been provided or made available to Newco or
its representatives or agents. No default under any Permit has occurred, except
for defaults under Permits that, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect.
-14-
3.12 Taxes.
-----
(a) Except as set forth in Schedule 3.12(a), the Corporation and each
----------------
of its Subsidiaries, and any consolidated, combined, unitary or aggregate group
for Tax purposes of which the Corporation or any of its Subsidiaries is or has
been a member (a "Consolidated Group") (i) has timely filed all material Tax
------------------
Returns required to be filed by it (and, with respect to any such Consolidated
Group, during the period for which they have been a member thereof) and (ii)
such Tax Returns are complete and correct in all material respects and (iii) has
paid all Taxes shown thereon to be due. The most recent financial statements
reflect adequate reserves for any Taxes payable by the Corporation and its
Subsidiaries, for all taxable periods and portions thereof that have not been
paid, whether or not shown as being due on any returns through the date of such
financial statements. Except as set forth in Schedule 3.12(a), to the best
----------------
knowledge of the Corporation (which for purposes, hereof, shall also include
the actual knowledge of Xxxxxxxx Xxxx, without inquiry or investigation), no
audit of any Tax Return of the Corporation or any of its Subsidiaries is
pending, threatened or being conducted by a Tax authority. No extension of the
statute of limitations on the assessment of any Taxes has been granted by the
Corporation or any of its Subsidiaries and is currently in effect. No consent
under Section 341(f) of the Code has been filed with respect to the Corporation
or any of its Subsidiaries. None of the Corporation or its Subsidiaries has
been a United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code. All Taxes required to be withheld, collected or
deposited by or with respect to the Corporation and each of its Subsidiaries
have been timely withheld, collected or deposited, as the case may be, and, to
the extent required, have been paid to the relevant taxing authority except to
the extent the failure to so withhold, collected or deposited is reasonably
likely to have a Material Adverse Effect. No power of attorney that is
currently in force has been granted with respect to any matter relating to Taxes
that could materially affect the Tax liability of the Corporation or one of its
Subsidiaries and that are reasonably likely to have a Material Adverse Effect.
Neither the Corporation nor any of its subsidiaries (i) is a party to or bound
by any tax indemnity, tax sharing or tax allocation agreement (or administrative
or accounting practice having substantially the same effect as such an
agreement), (ii) has agreed to make or is required to make any material
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise, or (iii) owns material assets that directly or indirectly
secure indebtedness the interest on which is tax-exempt under Section 103(a) of
the Code.
(b) Except as set forth in Schedule 3.12, none of the Corporation or
-------------
any of its Subsidiaries has any liabilities for the Taxes of any Person (other
than any of the Corporation or any of its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law) as a transferee or successor, by contract or otherwise.
3.13 Proceedings.
-----------
Schedule 3.13 sets forth a list of all pending Proceedings, and to the
-------------
Corporation's knowledge (which for purposes, hereof, shall also include the
actual knowledge of Xxxxxxx Xxxxxx, without inquiry or investigation),
threatened Proceedings, involving the Corporation or any of its Subsidiaries
which (i) relate to or involve more than $200,000 (in excess of available
insurance coverage), (ii) seek any equitable relief or (iii) which in any case,
individually or in the
-15-
aggregate, would materially impair the ability of the Corporation to perform its
obligations under this Agreement. Neither the Corporation nor any of its
Subsidiaries is a party or subject to or in default under any material Judgment
applicable to the conduct or the business of the Corporation or such Subsidiary,
expect as, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect.
3.14 Benefit Plans.
-------------
(a) Schedule 3.14(a) hereto contains a true and complete list of each
----------------
material employee benefit plan (as defined in Section 3(3) of ERISA), stock
option plans and severance agreements and plans that the Corporation and its
Subsidiaries has any present or future obligations or liability on behalf of its
employees or former employees, contractual employees or their dependents or
beneficiaries (collectively, the "Benefit Plans"). The following have been made
-------------
available to Newco (i) true and complete copies of all Benefit Plans (or in the
case of unwritten Benefit Plans, descriptions thereof), including, without
limitation, with respect to each Benefit Plan, all amendments to the Benefit
Plans, and any trust or other funding arrangement, (ii) Form 5500s for each
Benefit Plan for the two most recent plan years, (iii) the most recently
completed actuarial valuation for each Benefit Plan for which an actuarial
report is required by ERISA or for financial reporting purposes, and (iv) the
most recent summary plan description for each Benefit Plan for which a summary
plan description is required by ERISA.
(b) None of the Benefit Plans which is a "pension plan" within the
meaning of Section 3(2) of ERISA (a "Pension Plan") is a "multiemployer plan" as
------------
defined in Section 3(37) of ERISA, or is subject to the requirements of Title IV
of ERISA, Section 302 of ERISA or Section 412 of the Code. Neither the
Corporation nor any Subsidiary has any liability under Title IV of ERISA that
has had or is reasonably likely to have a Material Adverse Effect. Each Pension
Plan that is intended to be "qualified" within the meaning of Section 401(a) of
the Code has received a determination letter from the IRS that it is so
qualified or the remedial amendment period for such Pension Plan has not
expired, and no fact or event has occurred since the date of such determination
letter that could adversely affect the qualified status of any such Pension
Plan, except if the failure to be so qualified or the expiration of such
remedial amendment period would not be reasonably likely to have a Material
Adverse Effect.
(c) Neither Corporation nor any Subsidiary has incurred any liability
for any penalty or tax under Sections 4971, 4972, 4975, 4976, 4979, or 4980 of
the Code or Section 502 of ERISA which is reasonably likely to have a Material
Adverse Effect.
(d) Each of the Benefit Plans that is a "group health plan" (as
defined in Code Section 5000(b)) has at all times been in compliance with the
provisions of Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA
and any similar applicable state laws except to the extent that the failure to
be in compliance would not be reasonably likely to have a Material Adverse
Effect. No Benefit Plan that is a "welfare plan" (as defined in Section 3(1) of
ERISA) (the "Welfare Plans") provides or promises post-retirement health or life
-------------
benefits to current employees or retirees of Corporation or any Subsidiary,
except to the extent required under any applicable state law or under Section
601 of ERISA. Each Welfare Plan contains a procedure for amendment and
termination of such plan.
-16-
(e) No Benefit Plan is funded by a trust described in Section
501(c)(9) of the Code or subject to the provisions of Section 505 of the Code.
(f) Payment of all material amounts has been made to each Benefit Plan
which are required to be made as contributions thereto, under Applicable Law or
under any Benefit Plan or any agreement relating to a Benefit Plan as of the
last day of the most recent fiscal year of such Benefit Plan ended prior to the
date hereof. There is no accumulated funding deficiency with respect to any
Benefit Plan.
(g) Except as set forth in Schedule 3.14 and except as provided in the
-------------
Corporation's certificates and bylaws or as expressly provided in this
Agreement, there exist no employment, consulting, severance, termination or
indemnification agreements between the Corporation and any current or former
employee, officer or director of the Corporation providing for a lump sum or
annual payment in excess of $100,000. Except as set forth in Schedule 3.14, the
-------------
execution and delivery of, and performance of the transactions contemplated by,
this Agreement will not (either alone or upon the occurrence of any additional
or subsequent events) constitute an event under any Benefit Plan or individual
agreement that will result in any payment (whether of severance pay or
otherwise), acceleration, vesting or increase in benefits with respect to any
employee.
(h) All applicable filings, notice or reports (including, without
limitation, annual reports filed on IRS Form 5500 and disclosure to participants
and beneficiaries) relating to any Benefit Plan have been timely made.
(i) For purposes of this Section 3.14, any reference to the
------------
Corporation shall be deemed also to refer to any entity which is under common
control or affiliated with the Corporation within the meaning of Section 4001 of
ERISA and the rules and regulations thereunder and/or Section 414 of the Code
and the rules and regulations thereunder.
3.15 Absence of Changes or Events.
----------------------------
Except as set forth on Schedule 3.15 hereto, since December 31, 1998, the
-------------
Corporation and its Subsidiaries have conducted their respective businesses only
in the ordinary course consistent with prior practice except in connection with
the transactions contemplated hereby and the sale process, and there has not
been:
(a) any change, development, condition or effect that, individually or
in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect;
(b) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of the
Corporation's capital stock other than the declaration of dividends in respect
of the Series F Preferred;
(c) any split, combination or reclassification of any of its capital
stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock;
-17-
(d) except in the ordinary course of business (i) any granting by the
Corporation or any Subsidiary to any officer of the Corporation of any material
increase in compensation, (ii) any granting by the Corporation or any Subsidiary
to any officer, employee, director or consultant of any increase in severance or
termination pay, (iii) any entry by the Corporation or any Subsidiary into any
written employment agreement, or any severance or termination agreement or
arrangement with any officer, employee, director or consultant, or (iv) any
adoption or amendment of any Benefits Plans, in the case of clauses (i) through
(iv) that has had or is reasonably likely to have a Material Adverse Effect;
(e) any damage, destruction or loss to property, whether or not
covered by insurance, that, individually or in the aggregate, has not been cured
and is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect;
(f) any material change in accounting methods, principles or practices
by the Corporation or any Subsidiary; or
(g) any material revaluation for financial statement purposes by the
Corporation or any of its Subsidiaries of any of asset (including, without
limitation, any material writing down of the value of any material property,
investment or assets).
3.16 Compliance with Applicable Laws.
-------------------------------
The Corporation and its Subsidiaries are not in conflict with, or in
default or violation of, its respective certificate of incorporation, by-laws,
partnership agreement or other charter or organizational documents, except in
the case of the Subsidiaries if such conflict, default or violation has not had
and is not reasonably likely to have a Material Adverse Effect. The Corporation
and its Subsidiaries have complied in all material respects with all Applicable
Laws, except for instances of noncompliance which, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect. Except
as set forth in Schedule 3.16, neither the Corporation nor any of its
-------------
Subsidiaries has received any written (or to the knowledge of the Corporation,
oral) communication during the past three years from a Governmental Entity that
alleges that the Corporation or its Subsidiaries is not in compliance in any
material respect with any Applicable Law, except if such non-compliance has not
had and is not reasonably likely to have a Material Adverse Effect. Except as
set forth in Schedule 3.16, neither the Corporation nor any of its Subsidiaries
-------------
has received any written (or to the knowledge of the Corporation, oral)
communication during the past three years from a Governmental Entity that
alleges that the Corporation or its Subsidiaries is not in compliance in any
material respect with any Applicable Law, except for any such non-compliance
that has not had and is not reasonably likely to have a Material Adverse Effect.
Except as set forth in Schedule 3.16, the Corporation has not received any
-------------
written (or to the knowledge of the Corporation, oral) notice of any pending
investigation by any Governmental Entity with respect to any non-compliance with
Applicable Law by the Corporation or any of its Subsidiaries, which has had or
is reasonably likely to have a Material Adverse Effect. The Corporation's
Common Stock is not required to be registered pursuant to Section 12 of the
Exchange Act.
-18-
3.17 Environmental Matters.
---------------------
Except as set forth in Schedule 3.17:
-------------
(a) the Corporation and each Subsidiary is, and has been, in
compliance with all applicable Environmental Laws except for any noncompliance
that, individually or in the aggregate, has not had a Material Adverse Effect
that has not been cured and is not reasonably likely to have a Material Adverse
Effect. The term "Environmental Laws" means any Federal, state, provincial,
------------------
regional, municipal, local or foreign judgment, order, decree, statute, law,
ordinance, rule, regulation, code, permit, consent, approval, license, writ,
decree, directive, injunction or other enforceable governmental requirement,
including any registration requirement, relating to: (A) Releases or threatened
Releases of Hazardous Materials into the environment; (B) the generation,
treatment, storage, disposal, use, handling, manufacturing, transportation or
shipment of Hazardous Materials; or (C) otherwise relating to pollution or
protection of health or safety or the environment;
(b) since December 18, 1997 (and prior to such date, to the knowledge
of the Corporation), there has been no Release or threatened Release of
Hazardous Materials, in, on, under or affecting any property now or previously
owned, leased, controlled or operated by the Corporation or any Subsidiary or,
to the knowledge of the Corporation, any adjacent site, which Release or
threatened Release has had or is reasonably likely to have a Material Adverse
Effect. The term "Release" has the meaning set forth in 42 U.S.C. (S) 9601(22).
-------
The term "Hazardous Materials" means any pollutant, contaminant, hazardous,
-------------------
radioactive or toxic substance, material, constituent or waste, or any other
waste, substance, chemical or material regulated under any Environmental Law,
including (1) petroleum, crude oil and any fractions thereof, (2) natural gas,
synthetic gas and any mixtures thereof, (3) asbestos and/or asbestos-containing
material, (4) radon and (5) polychlorinated biphenyls ("PCBs"), or materials or
----
fluids containing PCBs;
(c) there is no pending, or, to the knowledge of the Corporation,
threatened claim, action, demand, investigation or inquiry of or against the
Corporation or any of its Subsidiaries by any Governmental Entity or other
Person relating to any actual or potential violations of Environmental Law or
any actual or potential obligation to investigate or remediate a Release or
threatened Release of any Hazardous Materials, in each case, that has had or is
reasonably likely to have a Material Adverse Effect;
(d) neither the Corporation nor any Subsidiary has used any waste
disposal site, or otherwise disposed of, transported, or arranged for the
transportation of, any Hazardous Materials to any place or location, except for
any such use, disposal, transportation or arrangement that has not had a
Material Adverse Effect that has not been cured and is not reasonably likely to
have a Material Adverse Effect.
3.18 Employee and Labor Matters.
--------------------------
Except as set forth in Schedule 3.18, (i) neither the Corporation nor any
--------------
Subsidiary is a party to any collective bargaining agreement or similar
agreement with a labor organization, union or association; (ii) there are no
unfair labor practice complaints pending against the Corporation or any
Subsidiary, or to the Corporation's knowledge, threatened against any of
-19-
them, before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is
pending against any of them; (iii) no strike, labor dispute, slowdown or
stoppage is pending (or to the Corporation's knowledge, threatened) against the
Corporation or any Subsidiary; (iv) there is no union representation question
existing with respect to the employees of the Corporation or any Subsidiary, and
(v) to the knowledge of the Corporation, since January 1, 1998, neither the
Corporation nor any Subsidiary has encountered any labor union organizing
activity, except with respect to any matter specified above, which in the case
of clauses (ii) - (v), individually or in the aggregate, is not reasonably
likely to have a Material Adverse Effect.
3.19 Affiliate Transactions.
----------------------
Schedule 3.19 sets forth a description of all transactions between the
-------------
Corporation or its Subsidiaries, on the one hand, and the Principal Stockholders
or any of their respective Affiliates, on the other hand, in each case
consummated at any time since January 1, 1999 and required to be disclosed in an
SEC Document (if such transaction occurred during the time period covered by
such SEC Document). Except as set forth on Schedule 3.19, there are no
-------------
agreements or arrangements between the Corporation or its Subsidiaries, on the
one hand, and the Principal Stockholders or any of their respective Affiliates,
on the other hand, in each case, required to be disclosed in an SEC Document (if
such agreement or arrangement was in existence during the time period covered by
such SEC Document). To the knowledge of the Corporation, no Principal
Stockholder or any of their respective Affiliates owns any interest in any asset
or property (real or personal, tangible or intangible), business or contract
used or intended for use or otherwise relating to the business currently
conducted by the Corporation or any Subsidiary other than minority investments
in publicly traded corporations.
3.20 State Takeover Statutes.
-----------------------
The Board has approved the Merger and this Agreement and the Stockholder
Support Agreements, and such approval is sufficient to render inapplicable to
the Merger, this Agreement and the Stockholder Support Agreements the provisions
of Section 203 of the DGCL to the extent, if any, such Section is applicable to
the Merger, this Agreement, the Stockholder Support Agreement and the
transactions contemplated by this Agreement and the Stockholder Support
Agreements. To the knowledge of the Corporation, no other state takeover statute
or similar statute or regulation applies to the Merger, this Agreement or the
transactions contemplated by this Agreement and the Stockholder Support
Agreements.
3.21 Opinion of Financial Advisor
----------------------------
The Board has received the opinion of Xxxxxxx Xxxxx Xxxxxx Inc, the
financial advisor to the Corporation.
3.22 Certain Additional Regulatory Matters.
-------------------------------------
None of (x) the Corporation, any Subsidiary of the Corporation, or, the
officers, directors, or employees or agents of the Corporation or any Subsidiary
or (y) to the Corporation's knowledge (which for purposes, hereof, shall also
include the actual knowledge of Xxxxx Xxxx), any Affiliate of the Corporation
having a direct or indirect ownership interest in the
-20-
Corporation or any of its Subsidiaries within the meaning of Section 1320a-
7(b)(8) of Title 42 of the United States Code have engaged in any activities
which constitute violations of, or are cause for imposition of civil penalties
upon the Corporation or mandatory or permissive exclusion of the Corporation
from Medicare or Medicaid, under Sections 1320a-7, 1320a-7a, 1320a-7b, or 1395nn
of Title 42 of the United States Code, the federal Civilian Health and Medical
Plan of the Uniformed Services statute ("CHAMPUS"), or the regulations
-------
promulgated pursuant to such statutes or regulations or related state or local
statutes, including the following activities: (a) knowingly and willfully making
or causing to be made a false statement or representation of a material fact in
any application for any benefit or payment; (b) knowingly and willfully making
or causing to be made any false statement or representation of a material fact
for use in determining rights to any benefit or payment; (c) presenting or
causing to be presented a claim for reimbursement under CHAMPUS, Medicare,
Medicaid or any other State Health Care Program (as defined below) or Federal
Health Care Program (as defined below) that is (i) for an item or service that
the Person presenting or causing to be presented knows or should know was not
provided as claimed, or (ii) for an item or service and the Person presenting
knows or should know that the claim is false or fraudulent; (d) knowingly and
willfully offering, paying, soliciting or receiving any remuneration (including
any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in
cash or in kind (i) in return for referring, or to induce the referral of, an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by CHAMPUS,
Medicare or Medicaid, or any other State Health Care Program or any Federal
Health Care Program, or (ii) in return for, or to induce, the purchase, lease,
or order, or the arranging for or recommending of the purchase, lease, or order,
of any good, facility, service, or item for which payment may be made in whole
or in part by CHAMPUS, Medicare or Medicaid or any other State Health Care
Program or any Federal Health Care Program; or (e) knowingly and willfully
making or causing to be made or inducing or seeking to induce the making of any
false statement or representation (or omitting to state a material fact required
to be stated therein or necessary to make the statements contained therein not
misleading) of a material fact with respect to (i) the conditions or operations
of a facility in order that the facility may qualify for CHAMPUS, Medicare,
Medicaid or any other State Health Care Program certification or any Federal
Health Care Program certification, or (ii) information required to be provided
under Section 1124(A) of the Social Security Act ("SSA") (Section 1320a-3 of
---
Title 42 of the United States Code), except for such matters which, individually
or in the aggregate, is not reasonably likely to have a Material Adverse Effect.
For purposes of this Section 3.22 only, "Subsidiary" shall also include, without
------------
limitation, the entities set forth in Schedule 3.22.
-------------
3.23 Medicare/Medicaid Participation Accreditation.
-----------------------------------------------
(a) None of the Corporation, its Subsidiaries or any existing officers
or directors of the Corporation or the respective Subsidiary who (based on
advice by Newco to the Corporation) is expected to be an officer, director,
agent (as defined in 42 C.F.R. Section 1001.1001(a)(2)), or managing employee
(as defined in SSA Section 1126(b) or any regulations promulgated thereunder) of
the Corporation or the respective Subsidiary: (1) has had a civil monetary
penalty assessed against it under Section 1128A of the SSA or any regulations
promulgated thereunder; (2) has A-I-21 been excluded from participation under
the Medicare program or a state health care program as defined in SSA Section
1128(h) or any regulations promulgated thereunder ("State Health Care Program")
-------------------------
or a federal health care program as defined in SSA Section
-21-
1128B(f) ("Federal Health Care Program"); or (3) has been convicted (as that
---------------------------
term is defined in 42C.F.R. Section 1001.2) of any of the following categories
of offenses as described in SSA Section 1128(a) and (b)(1), (2), (3) or any
regulations promulgated thereunder: (i) criminal offenses relating to the
delivery of an item or service under Medicare or any State Health Care Program
or any Federal Health Care Program; (ii) criminal offenses under federal or
state law relating to patient neglect or abuse in connection with the delivery
of a health care item or service; criminal offenses under federal or state law
relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or
other financial misconduct in connection with the delivery of a health care item
or service or with respect to any act or omission in a program operated by or
financed in whole or in part by any federal, state or local governmental agency;
(iii) federal or state laws relating to the interference with or obstruction of
any investigation into any criminal offense described above in this clause (a);
or (iv) criminal offenses under federal or state law relating to the unlawful
manufacture, distribution, prescription or dispensing of a controlled substance,
except for such matters which, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect.
(b) The Corporation or a Subsidiary has a Medicare provider number,
and a participating provider agreement in force with a Medicare Part B carrier,
in each locale, as applicable, in which the Corporation or such Subsidiary bills
directly to Medicare for services furnished by the Corporation or such
Subsidiary.
(c) The Corporation or a Subsidiary has a Medicaid number and a
participating provider agreement in each state, as applicable, in which the
Corporation or such Subsidiary bills directly to such states' Medicaid agency
for services provided by the Corporation or such Subsidiary.
(d) For purposes of this Section 3.23 only, "Subsidiary" shall also
------------
include, without limitation, the entities set forth in Schedule 3.23.
-------------
3.24 Brokers or Finders.
------------------
The Corporation represents, as to itself and its Affiliates, that no agent,
broker, investment banker or other firm or Person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except Xxxxxxx
Xxxxx Xxxxxx, Inc. and BT Alex. Xxxxx & Co., based upon arrangements made by or
on behalf of the Corporation. The Corporation has heretofore provided or made
available to Newco or its representatives or agents a true and complete copy of
all valid and binding written agreements between the Corporation and such firms
pursuant to which such firms would be entitled to any payment from the
Corporation relating to the Merger.
3.25 No Additional Representations.
-----------------------------
THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE III ARE THE
ONLY REPRESENTATIONS AND WARRANTIES MADE BY THE CORPORATION. EXCEPT AS
SPECIFICALLY SET FORTH HEREIN, ALL WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY
DISCLAIMED AND EXCLUDED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A
-22-
PARTICULAR PURPOSE. IN NO EVENT SHALL THE CORPORATION BE LIABLE FOR SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES. THE CORPORATION MAKES NO REPRESENTATION OR
WARRANTY AS TO THE ACCURACY OR RELIABILITY OF ANY FORECASTS OR PROJECTIONS OF
REVENUES, SALES, EXPENSES OR PROFITS OF THE BUSINESS.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT CORP. AND NEWCO
--------------------------------------------------------
Newco hereby represent and warrant to the Corporation, as of the date
hereof, and as of the Closing Date, as follows:
4.1 Organization, Standing, Qualification and Power
-----------------------------------------------
Newco is duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power and authority to own,
lease and operate its properties and to carry on its business as presently
conducted. Newco is duly qualified and in good standing to do business in each
jurisdiction in which the property owned or leased or operated by it or by the
nature of business conducted by it makes such qualification necessary, except
where the failure to be so qualified would not have a Material Adverse Effect.
From the date of its incorporation, Newco has not engaged in any activities
other than in connection with or as contemplated by this Agreement and the
Merger or in connection with or as contemplated by this Agreement and the
Merger. Newco has made available to the Corporation or its counsel,
representatives or advisors, complete and correct copies of its certificate of
incorporation, as in effect on the date hereof and its by-laws.
4.2 Authority; Execution and Delivery; Enforceability
-------------------------------------------------
Newco has all corporate power and authority to execute this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Newco of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action on the part of
Newco, and no other corporate proceedings on the part of Newco are necessary to
authorize the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby. Newco has duly executed
and delivered this Agreement and this Agreement constitutes a legal, valid and
binding obligation of Newco, enforceable against it in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or other similar laws affecting the enforcement of
creditors' rights generally and general equitable principles.
4.3 No Conflicts; Consent
---------------------
The execution and delivery by Newco of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance by Newco
with the terms hereof will not conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or a
loss of a material benefit under, or result in the creation of any Lien upon any
of the
-23-
properties or assets of Newco under any provision of (a) the certificate of
incorporation or by-laws of Newco, (b) any Contract to which Newco is a party or
by which any of its properties or assets is bound or (c) any Judgment or
Applicable Law applicable to Newco or its properties or assets. No consent of or
registration, declaration or filing with any Governmental Entity is required to
be obtained or made by or with respect to Newco in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, other than (i) compliance with and filings
under the HSR Act and (ii) as set forth in Schedule 4.3.
------------
4.4 Litigation
----------
There are not any (a) outstanding Judgments against Newco, or (b)
Proceedings pending or, to the knowledge of Newco, threatened against Newco or
its Affiliates that are in any case, individually or in the aggregate, are
reasonably likely to materially impair the ability of Newco to perform its
obligations under this Agreement or to materially delay the consummation of the
transactions contemplated hereunder.
4.5 Availability of Funds
---------------------
(a) Schedule 4.5(a) contains a true, correct and complete copy of a
---------------
commitment letter from Bankers Trust Corporation for the aggregate amount of
$650 million in senior bank financing.
(b) Schedule 4.5(b) contains a true, correct and complete copy of
---------------
commitment letters for the aggregate amount of $260 million in subordinated debt
financing. Schedule 4.5(b) also contains a true, correct and complete copy of a
---------------
commitment letter from Parent for equity financing. Newco cannot amend the
letters set forth in Schedule 4.5(b) without the consent of the Corporation.
---------------
(c) The commitment letters referred to in Sections 4.5(a) and (b) are
--------------- ---
hereinafter referred to as the "Financing Commitments."
---------------------
(d) No Financing Commitment has been modified, withdrawn or terminated
as of the date hereof, and Newco has no reason to believe as of the date hereof
that the Financing Commitments will not lead to the financing as contemplated by
the Financing Commitments. Assuming the satisfaction or waiver of the
conditions set forth in the Financing Commitment, the Financing Commitments are
sufficient to pay the Cash Merger Price, the Preferred Merger Price and all fees
and expenses arising out of or relating to the transactions contemplated by this
Agreement, including, without limitation, the amount required to purchase or
defease all of the outstanding Senior Subordinated Notes and to purchase or
redeem all of the outstanding FIRSTS.
4.6 Brokers or Finders.
------------------
Except for XX Xxxxxx and Xxxxxxxx Kravis Xxxxxxx & Co. LLP, Newco
represents, as to itself and its Affiliates, that no agent, broker, investment
banker or other firm or Person is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement. No Principal Stockholder shall
-24-
have any liability or obligation, and if this Agreement is terminated, the
Corporation shall not have any liability or obligation, to XX Xxxxxx or
Xxxxxxxx, Kravis Xxxxxxx & Co. LLP.
4.7 Newco.
-----
No Affiliate of Parent or Newco owns any material equity interest in any
Person engaged in the mobile magnetic resonance imaging business. Newco has no
reason to believe that the Federal Trade Commission or the Department of Justice
will request any information in connection with the consummation of the
transactions contemplated by this Agreement or that there is any antitrust
impediment to the consummation of the transactions contemplated hereby.
ARTICLE V
COVENANTS
---------
5.1 Conduct of Business.
-------------------
From the date hereof to the Effective Time (or the termination of this
Agreement), except as set forth on Schedule 5.1, the Corporation shall, and
------------
shall cause each Subsidiary to, carry on its business in the ordinary course
consistent with past practice and use reasonable efforts to preserve intact its
current business organization, keep available the services of its current
officers and employees and preserve its relationships with customers, suppliers,
licensors, licensees and others having material business dealings with it, in
each case in accordance with past practice. Without limiting the generality of
the foregoing, from the date hereof to the Effective Time, the Corporation shall
not and shall cause each Subsidiary not to (except as expressly permitted or
contemplated by this Agreement or with the prior written consent of Newco, which
consent will not be unreasonably withheld or delayed):
(a) (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) purchase, redeem or otherwise acquire any Shares or any
capital stock of the Corporation or any Subsidiary or any other securities
thereof or any rights, warrants or options to acquire any such shares or other
securities;
(b) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities (other than the issuance of Shares upon the
exercise of Corporation Stock Options outstanding on the date hereof);
(c) amend its Certificate of Incorporation or Bylaws or other
comparable charter or organizational documents;
(d) acquire or agree to acquire (i) by merging or consolidating with,
or by purchasing a substantial portion of the assets or stock of, or by any
other manner, any business or any person, other than as set forth on Schedule
--------
5.1 or (ii) any assets or make other capital expenditures except for the
---
purchase of equipment or other assets consistent with the
-25-
Corporation's capital expenditure forecast for 1999 and the first quarter of
2000 as set forth on Schedule 5.1(d); provided that the Corporation may agree to
--------------- --------
acquire any asset or agree to make any capital expenditure if such agreement is
terminable or may be substantially delayed for any reason by the Corporation
without premium or penalty;
(e) sell, lease, license, mortgage or otherwise encumber or subject to
any Lien or otherwise dispose of any of its properties or assets, except (i)
immaterial assets, (ii) in the ordinary course of business (including for
trade-ins) or (iii) where the amount of such sales does not exceed, individually
or in the aggregate, $1,000,000 (excluding trade-ins);
(f) (i) incur any indebtedness or guarantee any such indebtedness of
another Person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Corporation or any Subsidiary (other than
incurrence of indebtedness under the Corporation's revolving credit facility or
equipment financing in the ordinary course of business consistent with past
practice), guarantee any debt securities of another Person, enter into any "keep
well" or other agreement to maintain any financial statement condition of
another Person or enter into any arrangement having the economic effect of any
of the foregoing, or (ii) make any loans, advances (other than advances to
Subsidiaries or among Subsidiaries) or capital contributions to, or investments
in, any other Person;
(g) make any material tax election or settle or compromise any
material income tax liability other than the payment of taxes in the ordinary
course of business;
(h) pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in the most recent
consolidated financial statements (or the notes thereto) of the Corporation
included in the SEC Documents or incurred thereafter in the ordinary course of
business consistent with past practice, or waive any material benefits of, or
agree to modify in any material respect, any confidentiality, standstill, non-
solicitation or similar agreement to which the Corporation or any Subsidiary is
a party;
(i) modify, amend or terminate any material Contract to which the
Corporation or any Subsidiary is a party (other than those Contracts subject to
Section 5.1(j)), or waive, release or assign any material rights or claims under
--------------
any material Contract (other than those Contracts subject to Section 5.1(j)),
--------------
other than in the ordinary course of business consistent with past practice;
(j) enter into any material Contract, which is not terminable by the
Corporation without premium or penalty, relating to the provision of services by
the Corporation or any Subsidiary, the maintenance of any MRI Unit or CT Unit or
the distribution, sale or marketing by third parties of the Corporation's or any
Subsidiary's services, including any material Contract with any hospital,
clinic, medical or healthcare provider, health maintenance organization or other
customer or third party payor, other than in the ordinary course of business
consistent with past practice; provided that the Corporation shall be permitted
--------
to enter into any Contract or engage in any transaction which is otherwise
permitted under this Section 5.1;
-----------
-26-
(k) except as set forth in Schedule 5.1(k) and except as required to
---------------
comply with Applicable Law, (i) adopt, enter into, terminate or amend any
Benefit Plan or other arrangement for the benefit or welfare of any director,
officer or current or former employee, other than, in the case of non-executive
officer employees, in the ordinary course of business consistent with past
practice, (ii) materially increase in any manner the compensation or fringe
benefits of, or pay any material bonus to, any director or executive officer
(other than as set forth on Schedule 5.1(k)), (iii) pay any material benefit to
---------------
any director or executive officer not provided for under any Benefit Plan (other
than customary director fees and expenses), (iv) except as permitted in clause
(ii), grant any awards under any bonus, incentive, performance or other
compensation plan or arrangement or Benefit Plan (including the grant of stock
options, stock appreciation rights, stock based or stock related awards,
performance units or restricted stock, or the removal of existing restrictions
in any Benefit Plans or agreement or awards made thereunder) or (v) fund or
secure the payment of material compensation or benefits under any Benefit Plan
other than in the ordinary course of business consistent with past practice;
(l) terminate the employment of Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxx,
Xxxxxxx Xxx or Xxxxxxx X. Xxxxxxxx, Xx.;
(m) willingly allow or permit to be done, any act by which any of the
material Insurance Policies may be suspended, materially impaired or canceled;
(n) enter into, renew, modify or revise any agreement or transaction
with any Principal Stockholder or any of its Affiliates if such renewal,
modification or revision is not on an arms' length basis or would be required to
be disclosed in an SEC Document assuming the renewal, modification or revision
was executed or the transaction occurred during the period covered by such SEC
Document; or
(o) authorize any of, or commit or agree to take any of, the foregoing
actions.
5.2 Access to Information.
---------------------
The Corporation shall, and shall cause its Subsidiaries and its and their
respective officers, directors, employees and agents to, afford to Newco, its
Affiliates and their respective accountants, counsel and other representatives
reasonable access during normal business hours during the period prior to the
Effective Time to all the properties, officers, employees, agents, attorneys,
accountants, books, contracts, commitments, Tax Returns and records of the
Corporation and its Subsidiaries and, during such period shall furnish promptly
to Newco any information concerning the Corporation and its Subsidiaries as
Newco may reasonably request; provided, however, that (a) such access does not
-------- -------
unreasonably disrupt the normal operations of the Corporation or any of its
Subsidiaries, (b) the Corporation is under no obligation to disclose to Newco
any information, the disclosure of which is restricted by Contract or Applicable
Law or any information relating to the proposed sale of the Corporation or (c)
the Corporation may withhold access to any of the foregoing to the extent the
matters covered thereby have been previously disclosed to Newco.
-27-
5.3 Confidentiality.
---------------
Newco acknowledges that the information being provided to it in connection
with the consummation of the transactions contemplated hereby is subject to the
terms of a confidentiality agreement dated as of June 18, 1999 between the
Corporation and Affiliates of Newco as if Newco was a party to such
Confidentiality Agreement (the "Confidentiality Agreement"), the terms of which
-------------------------
are incorporated herein by reference.
5.4 Efforts to Consummate.
---------------------
(a) Subject to the terms and conditions of this Agreement, the parties
agree (i) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, (ii) to execute any documents, instruments or conveyances of any kind
which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, and (iii) to cooperate with each other in
connection with the foregoing. Without limiting the foregoing, the parties
agree to use their respective reasonable efforts (A) to obtain all necessary
waivers, consents and approvals from any Person; provided, however that neither
-------- -------
the Corporation nor Newco shall be required to make any payments, commence
litigation or agree to modifications of the terms of any Contracts in order to
obtain any such waivers, consents or approvals, (B) to obtain all necessary
Permits as are required to be obtained under any Applicable Law, (C) to give all
notices to, and make all registrations and filings with third parties, including
without limitation submissions of information requested by Governmental
Entities, (D) to reasonably cooperate with all potential sources of financing to
the Corporation in connection with the Merger, and the other transactions
contemplated by this Agreement, and to take all reasonable steps as may be
necessary or advisable to consummate one or more financing transactions with
such potential sources of financing, (E) to the extent necessary to obtain
recapitalization accounting treatment of the Merger, taking reasonable actions
to restructure the transactions contemplated by this Agreement; provided that
--------
the Corporation will not be required to take any action that, in the
Corporation's reasonable discretion, may materially delay the consummation of
the Merger or may adversely affect the Cash Merger Price, the Preferred Merger
Price, the Taxes payable by any holder of the Corporation's Common Stock or the
risk of liability to any such holder and (F) to cause all conditions to this
Agreement to be satisfied; provided, however that neither the Corporation nor
-------- -------
Newco shall be required to make any payments or commence litigation in
connection therewith.
(b) Each of the Corporation and Newco shall, as promptly as
practicable, but in no event later than ten Business Days following the
execution and delivery of this Agreement, file with the United States Federal
Trade Commission (the "FTC") and the United States Department of Justice (the
---
"DOJ") the notification and report form, if any, required for the transactions
----
contemplated hereby and any supplemental information requested in connection
therewith pursuant to the HSR Act. Any such notification and report form and
supplemental information shall be in substantial compliance with the
requirements of the HSR Act. Each of Newco and the Corporation shall furnish to
the other such necessary information and reasonable assistance as the other may
request in connection with its preparation of any filing or submission that is
necessary under the HSR Act. The Corporation and Newco shall keep each other
apprised of the status of any communications with, and any inquiries or requests
for additional information
-28-
from, the FTC and the DOJ and shall comply promptly with any such inquiry or
request. Each of the Corporation and Newco shall use its reasonable efforts to
obtain any clearance required under the HSR Act for the consummation of the
transactions contemplated by this Agreement.
(c) Without limiting the foregoing, Newco shall use its commercially
reasonable best efforts to obtain the requisite funds for the consummation of
the transactions contemplated hereby, including the Merger, the Debt Offers (or
the defeasance of the Senior Subordinated Notes and the redemption of the
FIRSTS), and to pay the related fees and expenses, on substantially the terms
and conditions set forth in the Financing Commitments or on substantially
comparable terms.
(d) Without limiting the foregoing, the Corporation shall defease all
of the outstanding Senior Subordinated Notes and redeem all of the outstanding
FIRSTS at the Effective Time to the extent that the Debt Offer with respect to
such Existing Notes has not been consummated, in each case, with the proceeds
from the Financing Commitments.
5.5 Expenses.
--------
Whether or not the Closing takes place, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expense, including all costs and expenses
incurred pursuant to Section 5.4(a). Upon the Closing, the Surviving
--------------
Corporation shall pay the fees and expenses incurred by Newco and its Affiliates
in connection with this Agreement and the transactions contemplated hereby,
including the financial advisory fees of Kohlberg Kravis Xxxxxxx & Co. ("KKR")
---
and shall enter into a fee agreement pursuant to which the Surviving Corporation
will agree to pay KKR an annual management fee, reimburse KKR's expenses in
connection with its services to the Surviving Corporation and its ownership of
Shares and indemnify Newco and its Affiliates and their respective partners,
members, shareholders, officers, directors, employees, agents, representatives
and advisors in connection with their service on the board of directors of the
Corporation and the provision of services under the fee agreement.
5.6 Publicity.
---------
From the date hereof through the Closing Date, Newco, on the one hand, and
the Corporation on the other hand, will consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions contemplated
hereby. Without the prior written consent of the other party (which consent
shall not be unreasonably withheld), no public release or announcement
concerning the transactions contemplated hereby shall be issued by the
Corporation, on the one hand, or Newco, on the other hand, without the prior
consent of Newco, as the case may be, except as such release or announcement may
be required by law or the rules or regulations of any United States or foreign
securities exchange.
5.7 Employee Matters.
----------------
Newco has no present intention to provide employees of the Corporation with
benefits substantially different from those in effect on the date hereof, except
for equity incentive programs. Newco has no present intention to terminate the
employment of any employee of the
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Corporation or any of its Subsidiaries within 60 days following the Closing Date
except for existing plans of the Corporation.
5.8 Indemnification, Exculpation.
----------------------------
(a) All rights to indemnification and exculpation (including the
advancement of expenses) from liabilities for acts or omissions occurring at or
prior to the Effective Time (including with respect to the transactions
contemplated by this Agreement) existing as of the date hereof in favor of the
current or former directors, officers and employees of the Corporation, as
provided in the Certificate of Incorporation and/or the By-Laws and/or any
indemnification agreements and pursuant to applicable law shall be assumed by
the Surviving Corporation in the Merger, without further action, as of the
Effective Time and shall survive the Merger and shall continue in full force and
effect without amendment, modification or repeal in accordance with their terms
for a period of not less than 5 years after the Effective Time; provided,
--------
however, that if any claims are asserted or made within such period, all rights
-------
to indemnification (and to advancement of expenses) hereunder in respect of any
such claims shall continue, without diminution, until disposition of any and all
such claims.
(b) For a period of at least five years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect standard policies
of directors' and officers' liability insurance in an aggregate coverage amount
not less than the coverage amounts maintained by the Corporation as of the date
hereof and including coverage with respect to claim arising from facts or events
which occurred before the Effective Time to the extent available; provided,
however, that (i) the Surviving Corporation shall not be required in order to
maintain or procure such coverage to pay an annual premium in excess of $200,000
(other than with respect to any existing run-off coverage) and that if
equivalent coverage can be obtained only by paying an annual premium in excess
of such limit, the Surviving Corporation shall only be required to obtain as
much coverage as can be obtained by paying an annual premium equal to such limit
(subject to the availability of such (or similar) coverage) and (ii) such
policies may in the sole discretion of the Surviving Corporation be one or more
"tail" policies for all or portion of the full five years.
(c) The provisions of this Section 5.8 are intended to be for the
benefit of, and will be enforceable by, each indemnified party, his or her heirs
and his or her representatives.
5.9 No Solicitation.
---------------
The Corporation shall, and shall cause each Subsidiary to, and shall direct
and use reasonable efforts to cause its and its Subsidiaries' officers,
directors, employees, representatives and agents to, immediately cease any
discussions or negotiations with any parties other than Parent, Newco and their
Affiliates and representatives that may be ongoing with respect to an
Alternative Transaction. The Corporation shall not, shall cause each Subsidiary
not to, and shall not authorize and shall direct and use reasonable efforts to
cause its and its Subsidiaries' officers, directors, employees and any
investment banker, financial advisor, attorney, accountant or other
representative retained by it not to, directly or indirectly, (i) solicit,
initiate or encourage (including by way of furnishing information), or take any
other action to facilitate, any inquiries
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or the making of any proposal that may lead to an Alternative Transaction, or
(ii) participate in any discussions or negotiations regarding any proposed
Alternative Transaction.
5.10 Financial Information.
---------------------
The Corporation shall furnish to Newco the following financial information
(all to be prepared in accordance with GAAP consistently applied, subject, in
the case of unaudited financial information, to normal year-end audit
adjustments): (a) as soon as available but in any event within 45 days of each
of March 31, June 30, September 30 and December 31 and 35 days of each other
month, the unaudited consolidated balance sheets and income statements of the
Corporation, showing its financial condition as of the close of such month and
the results of operations during such month and for the then elapsed portion of
the Corporation's fiscal year, in each case, setting forth the comparative
figures for the corresponding month in the prior fiscal year, the corresponding
elapsed portion of the prior fiscal year and the corresponding period in the
Corporation's budget for 1999 as in effect on the date hereof; and (b) all
documents filed with or submitted to the SEC by the Corporation simultaneously
with such filing or submission.
5.11 Notice of Changes.
-----------------
From the date hereof to the Effective Time, each party (the "Breaching
---------
Party") shall give reasonably prompt notice to the other party of any breach of
-----
any representation, warranty or covenant made by the Breaching Party that it
becomes aware of, in each case, which breach would cause a condition to the non-
Breaching Party's obligations not to be satisfied. The Corporation shall give
reasonably prompt notice to Newco of any action commenced after the date hereof
and prior to the Effective Time that could reasonably be expected to materially
affect the Corporation or its Subsidiaries. A breach of this Section 5.11 shall
------------
be deemed not to have occurred if the failure to give any notice hereunder has
not materially prejudiced the non-Breaching Party.
5.12 Registration Rights Agreement.
-----------------------------
Immediately prior to the Effective Time, the Corporation shall execute and
deliver to Parent or Holdings LLC, the Principal Stockholders and any Substitute
Principal Stockholder a registration rights agreement (the "Registration Rights
-------------------
Agreement") substantially in the form set forth in Schedule 5.12.
--------- -------------
5.13 Affiliate Agreements.
--------------------
The Corporation shall use its reasonable efforts to cause the condition set
forth in Section 6.2(h) to be satisfied prior to the Effective Time.
--------------
5.14 Lease Agreements.
----------------
The Corporation shall use its reasonable efforts to amend all real estate
leases in respect of retail sites that have provisions for lease payments that
are based on revenues at the applicable site to provide for lease payments that
are not based on revenues.
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ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation.
-------------------------------------
The respective obligations of each party to effect the Merger are subject
to the satisfaction or waiver, where permissible, prior to the Effective Time,
of the following conditions:
(a) HSR Act. The waiting period (and any extensions thereof) under the
-------
HSR Act shall have expired or been terminated.
(b) No Injunctions or Restraints. No Applicable Law or injunction
----------------------------
enacted, entered, promulgated, enforced or issued by any Governmental Entity or
other legal restraint or prohibition preventing the consummation of the
transactions contemplated hereby shall be in effect; provided, however, that
-------- -------
each of the Corporation and Newco shall have used its reasonable efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as possible any such injunction or other order that may be entered.
6.2 Conditions to Obligation of Newco.
---------------------------------
The obligation of Newco to effect the Merger is subject to the satisfaction
(or waiver by Newco) on or prior to the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties
------------------------------
of the Corporation made in this Agreement shall be true and correct (without
giving effect to any limitation as to "materiality" or "Material Adverse
Effect"), as of the Closing Date as though made on and as of the Closing Date
(except as to any representation or warranty that expressly relates to a
specific date, which representation and warranty shall be true and correct on
the date so specified), except where the failure to be so true and correct is
not, individually or in the aggregate reasonably likely to have a Material
Adverse Effect. Newco shall have received a certificate signed by an authorized
officer of the Corporation certifying as to fulfillment of the conditions set
forth in this Section 6.2(a) with respect to the Corporation.
--------------
(b) Performance of Obligations. The Corporation shall have performed
--------------------------
or complied in all material respects with all obligations and covenants required
by this Agreement to be performed or complied with by the Corporation by the
time of the Closing, and Newco shall have received a certificate signed by an
authorized officer of the Corporation certifying as to fulfillment of the
conditions set forth in this Section 6.2(b) with respect to the Corporation.
--------------
(c) Secretary's Certificates. Newco shall have received a
------------------------
certificate, dated as of the Closing Date, signed by the Secretary of the
Corporation and certifying as to (i) its certificate of incorporation and
bylaws, (ii) the incumbency of officers executing this Agreement and (iii) the
resolutions of the board of director of the Corporation authorizing the
execution, delivery and performance by the Corporation of this Agreement.
-32-
(d) No Material Adverse Change. Since the date hereof, there shall
--------------------------
have been no change, development, condition or effect that has had or is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect.
(e) No Litigation. If Newco has complied in all material respects
-------------
with its obligations under Section 5.4, there shall not be pending by any
-----------
Governmental Entity (x) any suit, action or proceeding (i) challenging or
seeking to restrain or prohibit the consummation of the Merger or the
Stockholder Support Agreements, (ii) seeking to prohibit or limit the ownership
or operation by the Corporation, Parent or any of their respective Affiliates of
any material portion of the business or assets of the Corporation or any of its
Subsidiaries, to dispose of or hold separate any material portion of the
business or assets of the Corporation or any of its Subsidiaries, as a result of
the Merger or any of the other transactions contemplated by this Agreement or
the Stockholder Support Agreements, (iii) seeking to impose limitations on the
ability of Parent, Newco or their Affiliates to acquire or hold, or exercise
full rights of ownership of, any shares of the Common Stock, including, without
limitation, the right to vote the Common Stock on all maters properly presented
to the stockholders of the Corporation, or (iv) seeking to prohibit Parent or
any of its Affiliates from effectively controlling in any material respect the
business or operation of the Corporation or its Subsidiaries, or (y) any formal
investigation, audit or Qui Tam proceeding with respect to the Corporation's
compliance with Health Care Laws that Newco reasonably determines has the
potential to be material to the Corporation and its Subsidiaries, taken as a
whole (other than any such investigation, audit or Qui Tam proceeding relating
to a matter that has been previously disclosed to Newco); provided that the
--------
condition set forth in this Section 6.2(e)(y) shall be deemed to be waived on
-----------------
the tenth Business Day following delivery of a notice to Newco of any such
investigation, audit or Qui Tam proceeding if Newco shall not have delivered on
or prior to such tenth day a notice to the effect that it has reasonably
determined that such investigation, audit or Qui Tam proceeding has the
potential to be material and adverse to the Company and its Subsidiaries, taken
as a whole.
(f) Financing. The Corporation shall have received the proceeds of
---------
financing described in the Financing Commitment referred to in Section 4.5(a) on
substantially the terms set forth in the Financing Commitment or on
substantially comparable terms.
(g) Payout Options. Each Payout Option, except for Payout Options
--------------
which are exercisable with respect to fewer than 50,000 shares of Common Stock,
shall have been cancelled for the cash payment contemplated by Section 2.4.
-----------
(h) Termination of Affiliate Agreements. Each of the agreements set
-----------------------------------
forth in Schedule 6.2(h) shall have been terminated without further liability
---------------
(it being understood that all amounts payable thereunder shall be paid at or
prior to the Effective Time), and all obligations and liabilities of the
Corporation to the Principal Stockholders and their Affiliates thereunder shall
be cancelled, except, in each case for rights to indemnification and exculpation
set forth in the agreements referred to in Schedule 6.2(h).
---------------
(i) Resignations. Prior to the Effective Time, each member of the
------------
Board that is employed by or an Affiliate of the Principal Stockholders shall
have executed letters of resignation which shall become effective as of the
Effective Time.
-33-
(j) Stockholder Agreements. Each of the Principal Stockholders shall
----------------------
have performed in all material respects its obligations under each of the
Stockholder Support Agreements.
(k) Recapitalization Accounting Treatment. The Chief Accountant or
-------------------------------------
other senior staff members of the SEC shall not have issued any public
communication which (i) changes its policy with respect to recapitalization
accounting treatment as in effect on the date hereof and (ii) would result in
the transactions contemplated by this Agreement not to be treated as a
recapitalization for accounting purposes.
6.3 Conditions to the Obligation of the Corporation.
-----------------------------------------------
The obligation of the Corporation to effect the Merger is subject to the
satisfaction (or waiver by the Corporation) on or prior to the Closing Date of
the following conditions:
(a) Representations and Warranties of Newco. The representations and
----------------------------------------
warranties of Newco made in this Agreement shall be true and correct (without
giving effect to any limitation as to "materiality" or "Material Adverse
Effect"), as of the Closing Date as though made on and as of the Closing Date
(except as to any representation or warranty that expressly relates to a
specific date, which representation and warranty shall be correct in all
material respects on the date so specified), except where the failure to be so
true and correct is not, individually or in the aggregate reasonably likely to
have a Material Adverse Effect (except for the representations contained in
Sections 4.1 and 4.2, which shall be true and correct in all respects). The
Corporation shall have received a certificate signed by an authorized officer of
Newco to such effect.
(b) Performance of Obligations of Newco. Newco shall have performed or
-----------------------------------
complied in all material respects with all obligations and covenants required by
this Agreement to be performed or complied with by Newco by the time of the
Closing, and the Corporation shall have received a certificate signed by an
authorized officer of Newco to such effect (it being understood that Newco shall
not have been deemed to have complied in all material respects if it has not
paid the Cash Merger Price and the Preferred Merger Price in full).
(c) Secretary's Certificate. The Corporation shall have received a
-----------------------
certificate, dated as of the Closing Date, signed by the Secretary of Newco
certifying as to (i) its certificate of incorporation and bylaws, (ii) the
incumbency of officers executing this Agreement and (iii) the resolutions of the
board of directors of Newco authorizing the execution, delivery and performance
by Newco of this Agreement.
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ARTICLE VII
TERMINATION
-----------
7.1 Termination.
-----------
(a) Subject to the provisions of Section 7.2, this Agreement may be
-----------
terminated and the transactions contemplated by this Agreement abandoned at any
time prior to the Closing, notwithstanding approval thereof by the stockholders
of the Corporation:
(i) by mutual written consent of the Corporation and Newco;
(ii) by either the Corporation or Newco, if the Effective Time
shall not have occurred on or before November 30, 1999; provided that
--------
the right to terminate this Agreement pursuant to this Section
-------
7.1(a)(ii) shall not be available to the party seeking to terminate if
----------
any willful failure of such party to perform any of its obligations
under this Agreement required to be performed at or prior to the
Effective Time has been the cause of the failure of the Effective Time
to occur on or before such date and such failure constitutes a breach
of this Agreement;
(iii) by the Corporation, on or after November 8, 1999 if all
conditions to the obligations of Newco shall have been satisfied or
waived on or before such date other than the condition set forth in
Section 6.2(f); provided that Newco shall be entitled to extend such
--------
date to a date not later than November 12, 1999 if the Corporation is
required under Applicable Law to extend the Debt Offer beyond November
8, 1999; provided, further, that the right to terminate this Agreement
-------- -------
pursuant to this Section 7.1(a)(iii) shall not be available to the
-------------------
party seeking to terminate if any willful failure of such party to
perform any of its obligations under this Agreement required to be
performed at or prior to the Effective Time has been the cause of the
failure of the Effective Time to occur on or before November 8, 1999
(or, if extended, November 12, 1999) and such failure constitutes a
breach of this Agreement;
(iv) by the Corporation or Newco if any Governmental Entity shall
have issued a final order, decree or ruling or taken any other final
action permanently restraining, enjoining or otherwise prohibiting the
Merger and such order, decree or other action is or shall have become
final and nonappealable; or
(v) by the Corporation following delivery by Newco to the
Corporation of a notice pursuant to Section 6.2(e).
--------------
(b) In the event of termination by the Corporation or Newco pursuant
to this Section 7.1, written notice thereof shall forthwith be given to the
-----------
other and the transactions contemplated by this Agreement shall be terminated,
without further action by any party.
-35-
7.2 Effect of Termination.
---------------------
If this Agreement is terminated and the transactions contemplated hereby
are abandoned as described in Section 7.1, this Agreement shall become null and
-----------
void and of no further force and effect, except for the provisions of Sections
--------
2.3, 5.3, 5.5, 5.6, this Article VII and Article VIII. Nothing in this Section
--- --- --- --- -------
7.2 shall be deemed to release any party from any liability for any breach by
---
such party of the terms and provisions of this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
------------------
8.1 Assignment.
----------
This Agreement and the rights and obligations hereunder shall not be
assignable or transferable by Newco or the Corporation (including by operation
of law in connection with a merger or consolidation of Newco or the Corporation)
without the prior written consent of the other party hereto. Any attempted
assignment in violation of this Section 8.1 shall be void.
-----------
8.2 No Third-Party Beneficiaries.
----------------------------
This Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.
8.3 Survival.
--------
The representations and warranties and covenants applicable to periods
prior to the Closing contained in this Agreement and in any document delivered
in connection herewith shall survive until the Closing and the consummation of
the transactions contemplated hereby and shall not survive the Closing. From
and after the Effective Time, no party shall have any claim or cause of action
arising out of or relating to this Agreement, including any claim or cause of
action in respect of any breach of any representation or warranty or covenant
applicable to periods prior to the Closing contained in this Agreement, other
than any claim in respect of any covenant to be performed after the Closing
Date.
8.4 Notices.
-------
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand or sent by
facsimile or sent, postage prepaid, by registered, certified or nationally
recognized overnight courier service and shall be deemed given when so delivered
by hand or facsimile, or if mailed, three days after mailing (one Business Day
in the case of overnight courier service), as follows:
(i) if to Newco, or the Surviving Corporation after the Closing,
to
Viewer Acquisition Corporation
c/o Kohlberg Kravis Xxxxxxx & Co. LLP
-36-
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
(ii) if to the Corporation prior to the Closing to:
Alliance Imaging, Inc.
0000 Xxxxx XxxxxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier. (000) 000-0000
Attention: Chief Executive Officer,
with a copy to:
Apollo Management, L.P.
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Mr. Xxxxxx Xxxxxx
and
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
8.5 Interpretation; Exhibits and Schedules.
--------------------------------------
The headings contained in this Agreement, in any Exhibit or Schedule
hereto and in the table of contents to this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Except when the context requires otherwise, any reference in this
Agreement to any Article, Section, clause, Schedule or Exhibit
-37-
shall be to the Articles, Sections and clauses of, and Schedules and Exhibits
to, this Agreement. The words "include," "includes" and "including" are deemed
to be followed by the phrase "without limitation." Any reference to the
masculine, feminine or neuter gender shall include such other genders and any
reference to the singular or plural shall include the other, in each case unless
the context otherwise requires. All Exhibits and Schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth on full herein. The consummation of the matters set forth on
Exhibit C shall be exceptions to the representations, warranties and covenants
---------
of the Corporation contained in this Agreement.
8.6 Counterparts.
------------
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the parties and
delivered to the other party.
8.7 Entire Agreement.
----------------
This Agreement, the Stockholder Support Agreements, the Stockholder
Agreement, the Registration Rights Agreement and the Confidentiality Agreement
contain the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements relating
to such subject matter. Neither party hereto shall be liable or bound to the
other party hereto in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein or in
such other documents set forth in this Section 8.7.
8.8 Amendments and Waivers.
----------------------
This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the parties hereto. By an instrument in writing the
Corporation, on the one hand, or Newco, on the other hand, may waive compliance
by the other party with any term or provision of this Agreement that such other
party was or is obligated to comply with or perform. No delay on the part of
any party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party
hereto of any right, power or privilege hereunder operate as a waiver of any
other right, power or privilege hereunder or preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder. Unless otherwise provided, the rights and remedies herein provided
are cumulative and are not exclusive of any rights or remedies which the parties
hereto may otherwise have at law or in equity.
8.9 Severability.
------------
It is the desire and intent of the parties hereto that the provisions of
this Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other
-38-
jurisdiction so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Upon such
adjudication that any particular provision shall be invalid, prohibited or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.
8.10 Consent to Jurisdiction.
-----------------------
Each of Newco and the Corporation irrevocably submits to the non-exclusive
jurisdiction of the Supreme Court of the State of New York, New York County, the
United States District Court for the Southern District of New York and any
appellate courts thereof, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each of Newco and the Corporation further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's respective
address set forth above shall be effective service of process for any action,
suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction in this Section 8.10 . Each of Newco and the
------------
Corporation irrevocably, and unconditionally waives any objection to the laying
of venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in the Supreme Court of the State of New York,
New York County, the United States District Court for the Southern District of
New York and any appellate courts thereof, and hereby and thereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
8.11 Limitation of Damages.
---------------------
Notwithstanding any provision of this Agreement, no party shall be liable
for any punitive, exemplary or consequential damages, including loss of revenue
or income, or loss of business reputation or opportunity relating to the breach
of this Agreement.
8.12 Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware applicable to agreements made and to be
performed entirely within such State, without regard to the conflicts of law
principles of such State.
8.13 Waiver of Jury Trial.
-----------------------
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
-39-
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED
IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH
WAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH
WAIVERS, (iii) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.13.
8.14 Equitable Remedies.
------------------
Each of the parties acknowledges and agrees that the other party would be
irreparably damaged in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached.
Therefore, notwithstanding anything to the contrary in this Agreement, each of
the parties agrees that the other party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the performance by the other party under this Agreement,
and each party agrees to waive the defense in any such suit that the other party
has an adequate remedy at law and to interpose no opposition, legal or
otherwise, as to the propriety of injunction or specific performance as a
remedy. The equitable remedies described in this Section 8.14 shall be in
addition to, and not in lieu of, any other remedies at law or in equity that the
parties hereto may elect to pursue.
* * * *
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Merger as of the date first written above.
VIEWER ACQUISITION CORPORATION
By: ___________________________________
Name:
Title:
ALLIANCE IMAGING, INC.
By: ___________________________________
Name:
Title:
ANNEX I
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Definitions
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As used in this Agreement, the following terms shall have the
following respective meanings:
"Acquisition LLC" has the meaning set forth in the preamble hereto
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"Affiliate" of any Person means another Person that directly or
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indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.
"Agreement" means this Agreement and Plan of Merger.
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"Alternative Transaction" means (i) any acquisition or purchase of 20%
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or more of the consolidated assets of the Corporation and its Subsidiaries or of
over 20% of any class of equity securities of the Corporation or any of its
Subsidiaries, (ii) any tender offer (including a self tender offer) or exchange
offer that if consummated would result in any Person beneficially owning 20% or
more of any class of equity securities of the Corporation or any of its
Subsidiaries, (iii) any merger, consolidation, business combination, sale of all
or substantially all of the assets, recapitalization, liquidation, dissolution
or similar transaction involving the Corporation or any of its Subsidiaries
whose assets, individually or in the aggregate, constitute more than 20% of the
consolidated assets of the Corporation other than the transactions contemplated
by this Agreement, or (iv) any other transaction the consummation of which would
be reasonably likely to impede, interfere with, prevent or materially delay the
Merger or which would be reasonably likely to materially dilute the benefits to
Newco of the transaction contemplated hereby.
"Applicable Law" means shall mean any laws, statutes, ordinances,
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regulations, rules, notice requirements, court decisions, agency guidelines,
principles of law and orders of any Governmental Entity.
"Benefit Plan" has the meaning set forth in Section 3.14(a).
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"Board" has the meaning set forth in the preamble hereof.
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"Business Day" means any day that is not a Saturday, Sunday or other
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day on which banking institutions in New York, New York are not required to be
open.
"By-Laws" has the meaning set forth in Section 1.5(b).
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"Cash Merger Price" means (a) an amount equal to (i) $915 million plus
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(ii) the aggregate exercise price of all Corporation Stock Options (whether or
not vested) outstanding immediately prior to the Effective Time plus (iii) all
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cash proceeds received by the Corporation in connection with the exercise of any
Corporation Stock Option after the date hereof and prior
to the Effective Time (any such exercised Corporation Stock Options shall not be
considered outstanding under clause (ii) above) less (iv) the Net Debt Amount
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less (v) the product of 150,000 multiplied by the Preferred Merger Price less
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(vi) the Corporation Expenses less (vii) the aggregate retention bonuses paid
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or payable in accordance with the arrangements set forth in Exhibit C (as the
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amount of such bonuses may be revised by the Corporation, in its sole
discretion, from time to time prior to the Effective Time) plus (viii) $582,500
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(adjusted in the same proportion as the retention bonuses) divided by (b) the
total number of shares of Common Stock outstanding immediately prior to the
Effective Time assuming all Corporation Stock Options (whether or not vested)
have been exercised.
"Certificate of Incorporation" has the meaning set forth in Section
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1.5(a).
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"Certificate of Merger" has the meaning set forth in Section 1.2.
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"Closing" has the meaning set forth in Section 1.3.
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"Closing Date" has the meaning set forth in Section 1.3.
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Common Stock" has the meaning set forth in the preamble hereof.
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"Confidentiality Agreement" has the meaning set forth in Section 5.3.
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"Consent" has the meaning set forth in Section 3.3(b).
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"Contract" all agreements, contracts, leases, purchase orders,
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undertakings, understandings, covenants not to compete, employment agreements,
confidentiality agreements, licenses, instruments, obligations and commitments
to which the Corporation or one of its Subsidiaries is a party or by which any
assets of the Corporation or its Subsidiaries are bound or affected, whether
written or oral.
"control" (including the terms "controlled", "controlled by" and
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"under common control with") means the possession, directly or indirectly, of
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the power to direct or cause the direction of the management policies of a
Person, whether through the ownership of stock, by contract or credit
arrangement or otherwise.
"Corporation" has the meaning set forth in the caption.
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"Corporation Expenses" means all expenses incurred by the Corporation
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in connection with the negotiation, execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, including all fees
payable to the Corporation's financial advisors and counsel in connection with
such transactions, other than those expenses relating to the Debt Offers, the
debt and equity financing to be provided in connection with the Merger, the
financial advisory work provided to Newco and its Affiliates and the rollover of
management equity and other compensation arrangements for management after the
Closing (it being understood that the Corporation will cause its financial
advisors
and counsel to provide final invoices prior to Closing for all services that are
included in Corporation Expenses).
"Corporation Stock Option Plans" means the Corporation's 1991 Stock
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Option Plan, 1997 Stock Option Plan, 1999 Non-Employee Director Stock Option
Plan, the Three Rivers Holding Corp. 1997 Stock Option Plan, the Rollover Option
Agreements between Three Rivers Holding Corp. and certain of its employees and
any other plan, agreement or arrangement which grants options or any other
rights in Common Stock, in each case, as amended, supplemented or restated to
the date hereof.
"Corporation Stock Options" means all options to acquire Common Stock.
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"Credit Agreement" means the Third Amended and Restated Credit
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Agreement dated as of May 13, 1999, among the Corporation, Salomon Brothers
Holding Company Inc, Bankers Trust Company and the Various Lending Institutions
party thereto.
"Debt Offers" has the meaning set forth in Section 2.3.
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"DGCL" has the meaning set forth in the preamble hereof.
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"Dissenting Shares" has the meaning set forth in Section 2.1.
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"DOJ" has the meaning set forth in Section 5.4(b).
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"Effective Time" has the meaning set forth in Section 1.2.
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"Environmental Law" has the meaning set forth in Section 3.17.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended, the regulations promulgated thereunder.
"Exchange Fund" has the meaning set forth in Section 2.2(d).
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"Existing Notes" means the FIRSTS and the Senior Subordinated Notes.
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"FIRSTS" means the Corporation's Floating Interest Rate Subordinated
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Term Securities due 2005.
"FTC" has the meaning set forth in Section 5.4(b).
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"GAAP" means generally accepted accounting principles set forth in the
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opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession in the United States, consistently applied.
"Governmental Entity" means any Federal, state, local or foreign
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government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority, agency, department, board,
commission or instrumentality, domestic or foreign.
"Hazardous Materials" has the meaning set forth in Section 3.17.
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"Health Care Laws" means laws and regulations relating to the Permits
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referred to in Section 3.11 that are specific to the healthcare industry (such
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as certificates of need and clinic licenses), laws and regulations referred to
in Sections 3.22 and 3.23 and laws and regulations enacted or promulgated
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pursuant to State Health Care Programs and Federal Health Care Programs.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
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1976, as amended.
"Judgment" means any judgment, decision, ruling, writ, injunction,
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order, award or decree of any Governmental Entity.
"Leased Property" has the meaning set forth in Section 3.8.
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"Leases" has the meaning set forth in Section 3.8.
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"Liens" means mortgages, liens, security interests, pledges,
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easements, rights of first refusal, options, restrictions, claims, easements,
encroachment, building or use restriction, or encumbrances of any kind, whether
voluntarily incurred or arising by operation of law, and includes any agreement
to give any of the foregoing in the future and any contingent sale or other
title retention agreement or lease in the nature thereof.
"Material Adverse Effect" means (i) a material adverse effect on the
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business, assets, liabilities, properties, condition (financial or otherwise) or
results of operations of the Corporation and its Subsidiaries, taken as a whole,
other than any such effect caused by or relating to general economic conditions
or (ii) the prevention or material delay of the ability of the Corporation to
consummate the transactions contemplated hereby.
"Merger" has the meaning set forth in the preamble hereof.
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"Merger Shares" has the meaning set forth in Section 2.1(a)(i).
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"Net Debt Amount" means (a) $526,998,000 less (b) if the Effective
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Time occurs after October 31 but prior to November 30, the product of $141,333
multiplied by the number of days that has elapsed from October 31 through the
Closing Date.
"Newco" has the meaning set forth in the first paragraph hereof.
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"Non-Voting Common" has the meaning set forth in Section 3.4(a).
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"Offer Documents" has the meaning set forth in Section 2.3.
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"Owned Real Property" has the meaning set forth in Section 3.8(a).
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"Parent" has the meaning set forth in the preamble hereof.
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"Paying Agent" has the meaning set forth in Section 2.2.
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"Payout Options" has the meaning set forth in Section 2.4.
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"Permits" has the meaning set forth in Section 3.11.
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"Permitted Liens" means (i) those Liens granted pursuant to real
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property loans and leases disclosed in Schedule 3.8 or which the failure to
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disclose would not be reasonably likely to have a Material Adverse Effect, (ii)
mechanics', carriers', workmen's, repairmen's or other like Liens arising or
incurred in the ordinary course of business, Liens arising under original
purchase price conditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business and liens for Taxes that
continued use and operation of the Corporation's or its Subsidiaries' assets in
the conduct of its business as presently conducted, (iv) easements, covenants,
rights-of-way and other similar restrictions of record, (v) any conditions that
may be shown by a current, accurate survey or physical inspection of any Owned
Real Property made prior to Closing, (vi) (A) zoning, building and other similar
restrictions, (B) Liens that have been placed by any developer, landlord or
other third party on property are not due and payable or that may thereafter be
paid without penalty or that are being contested in good faith by appropriate
proceedings, (iii) other imperfections of title or encumbrances, if any, that do
not, individually or in the aggregate, materially impair the over which the
Corporation has easement rights and (C) unrecorded easements, covenants, rights-
of-way and other similar restrictions (none of which have had or are reasonably
likely to have a Material Adverse Effect), (vi) liens granted pursuant to the
Credit Agreement and (vii) other Liens which have not had and are not reasonably
likely to have a Material Adverse Effect.
"Person" means and includes any person or entity, whether an
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individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, firm or a governmental entity (or any department, agency or
political subdivision thereof).
"Preferred Merger Price" means a per share amount equal to the amount
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that a holder of a share of Series F Preferred would have received if that share
of Series F Preferred was redeemed immediately prior to the Effective Time.
"Preferred Stock" has the meaning set forth in Section 3.4.
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"Principal Stockholders" has the meaning set forth in the preamble
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hereto.
"Proceeding" means any claim, action, suit, investigation or
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proceeding before any Governmental Entity.
"Release" has the meaning set forth in Section 3.17.
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"Registration Rights Agreement" has the meaning set forth in Section
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5.12.
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"Retained Shares" means the number of shares of Common Stock set forth
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opposite the name of each stockholder set forth on Schedule 2.1; provided that
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after the date hereof, the Corporation and/or the Principal Stockholders may, in
their sole discretion, amend Schedule 2.1 to add additional stockholders who
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have agreed to retain shares of Voting Common Stock in lieu of a portion of the
shares set forth opposite the name of the Principal Stockholders
in such Schedule (a "Substitute Principal Stockholder"); provided, further, that
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(i) no such Substitute Principal Stockholder shall retain more than 5% of the
number of Shares it holds immediately prior to the Effective Time and (ii) that
an employee, officer or director of the Corporation shall not be a Substitute
Principal Shareholder.
"SEC Documents" has the meaning set forth in Section 3.6.
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"Securities Act" means the Securities Act of 1933, as amended, and as
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the same may be further amended, modified or supplemented from time to time, or
any successor statute, and the rules and regulations thereunder, as the same are
from time to time in effect.
"Senior Subordinated Notes" means the 9.625% Senior Subordinated
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Notes, due 2005.
"Series F Preferred" has the meaning set forth in the preamble hereof.
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"Series F Preferred Certificate of Designations" means the Certificate
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of Designations, Powers, Preferences and Rights of Series F Preferred, dated as
of December 17, 1997.
"Shares" means shares of Voting Common and Non-Voting Common issued
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and outstanding.
"Stockholders Agreement" has the meaning set forth in the preamble
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hereof.
"Stockholder Support Agreements" has the meaning set forth in the
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preamble hereof.
"Subsidiary" of any Person means another Person, an amount of the
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voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, more than 50%
of the equity interests of which) is owned (either alone or through or together
with any other Subsidiary or Subsidiaries) directly or indirectly by such first
Person.
"Substitute Principal Shareholder" has the meaning set forth in the
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definition of Retained Shares.
"Surviving Corporation" has the meaning set forth in Section 1.1.
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"Taxes" shall mean all taxes of any kind, including, without
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limitation, those on or measured by or referred to as income, gross receipts,
sales, use, ad valorem, franchise, net worth, profits, license, estimated,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
value added, property or windfall profits taxes, customs, duties or similar
fees, transfer taxes, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any Governmental Entity.
"Tax Return" shall mean any return, report or statement required to be
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filed with any Governmental Entity with respect to Taxes.
"Voting Common Stock" has the meaning set forth in Section 3.4.
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