EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
DATED AS OF
April 14, 1999,
AMONG
ALLIANCE IMAGING, INC.
AND
THREE RIVERS HOLDING CORP.
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TABLE OF CONTENTS
Page
Article I GENERAL..................................................................................1
1.1 The Merger....................................................................................1
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1.2 Effective Time of the Merger..................................................................1
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1.3 Effect of the Merger..........................................................................1
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1.4 Charter, By-Laws, Officers and Directors of Surviving Corporation.............................2
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1.5 Taking of Necessary Action....................................................................2
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1.6 Tax Free Reorganization.......................................................................2
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1.7 Closing.......................................................................................2
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Article II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES.................................................3
2.1 Consideration; Effect on Capital Stock........................................................3
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2.2 Exchange of Certificates......................................................................3
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2.3 Target Options................................................................................4
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Article III REPRESENTATIONS AND WARRANTIES.........................................................5
3.1 Representations and Warranties of Target......................................................5
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3.2 Representations and Warranties of Parent.....................................................16
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Article IV CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME;
ADDITIONAL AGREEMENTS.............................................................................19
4.1 Access to Records and Properties; Confidentiality............................................19
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4.2 Target Conduct...............................................................................20
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4.3 Parent Conduct...............................................................................21
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4.4 Dissenting Stockholders......................................................................22
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4.5 Advice of Changes............................................................................22
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4.6 Financial Information Update.................................................................22
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4.7 Acquisition Sub..............................................................................22
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4.8 Legal Conditions to Merger...................................................................23
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4.9 Consents.....................................................................................23
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4.10 Efforts to Consummate........................................................................23
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4.11 Notice of Prospective Breach.................................................................23
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4.12 Public Announcements.........................................................................23
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Article V CONDITIONS PRECEDENT....................................................................24
5.1 Conditions to Each Party's Obligations.......................................................24
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5.2 Conditions to Obligations of Parent and Acquisition Sub......................................24
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5.3 Conditions to Obligations of Target..........................................................25
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Article VI TERMINATION............................................................................26
6.1 Termination..................................................................................26
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6.2 Effect of Termination........................................................................26
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Article VII MISCELLANEOUS.........................................................................27
7.1 Expenses.....................................................................................27
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7.2 Survival.....................................................................................27
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7.3 Entire Agreement.............................................................................27
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7.4 Descriptive Headings.........................................................................27
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7.5 Notices......................................................................................27
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7.6 Counterparts.................................................................................28
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7.7 Governing Law................................................................................28
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7.8 Benefits of Agreement........................................................................29
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7.9 Pronouns.....................................................................................29
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7.10 Amendment, Modification and Waiver...........................................................29
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7.11 Covenants and Representations and Warranties.................................................29
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AGREEMENT AND PLAN OF MERGER dated as of
April 14, 1999, among ALLIANCE IMAGING, INC., a
Delaware corporation ("Parent") and THREE RIVERS
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HOLDING CORP., a Delaware corporation (the
"Target").
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The Boards of Directors of Parent and Target have each duly approved
and adopted this Agreement and Plan of Merger (this "Agreement"), and the
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proposed merger of Acquisition Sub (as hereinafter defined) with and into Target
(the "Merger") in accordance with this Agreement and the Delaware General
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Corporation Law (the "Delaware Statute"), whereby, among other things, the
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issued and outstanding shares of common stock, $.01 par value, of Target (the
"Target Common Stock") (other than shares held by Dissenting Stockholders), will
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be exchanged and converted into the right to receive shares of common stock,
$.01 par value, of Parent (the "Parent Common Stock") in the manner set forth in
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Article II hereof upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement and the representations, warranties, covenants, agreements,
conditions and promises contained herein and therein, the parties hereby agree
as follows:
ARTICLE I
GENERAL
1.1 The Merger
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In accordance with, and subject to, the provisions of this Agreement and
the Delaware Statute, Acquisition Sub shall be merged with and into Target, and
Target after the Effective Time, shall be and is hereinafter sometimes referred
to as the "Surviving Corporation." Acquisition Sub and Target are hereinafter
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sometimes collectively referred to as the "Constituent Corporations."
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1.2 Effective Time of the Merger.
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The Merger shall become effective upon the filing on the Closing Date by
the Surviving Corporation of a certificate of merger in appropriate form (the
"Certificate of Merger") with the Secretary of State of the State of Delaware.
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The Certificate of Merger shall be executed and delivered in the manner provided
under the Delaware Statute. The time when the Merger shall become effective is
referred to herein as the "Effective Time."
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1.3 Effect of the Merger.
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Except as specifically set forth herein or in the Certificate of
Merger, at the Effective Time, the identity, existence, corporate organization,
purposes, powers, objects, franchises, privileges, rights, immunities,
restrictions, debts, liabilities and duties (collectively, the "Corporate
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Rights") of Target shall continue in effect and be unimpaired by the Merger, and
the Corporate Rights of Acquisition Sub shall be merged with and into Target.
At the Effective
Time, the separate existence and corporate organization of Acquisition Sub shall
cease, and Acquisition Sub shall be merged with and into the Surviving
Corporation.
1.4 Charter, By-Laws, Officers and Directors of Surviving Corporation.
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From and after the Effective Time, (a) the certificate of incorporation and
bylaws of Target shall be the certificate of incorporation and bylaws of the
Surviving Corporation (the "Surviving Corporation Charter" and the "Surviving
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Corporation Bylaws", respectively), in each case, unless and until altered,
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amended or repealed as provided in the Delaware Statute, the Surviving
Corporation Charter or the Surviving Corporation By-laws and (b) the officers
and directors of Acquisition Sub immediately prior to the Effective Time shall
become the officers and directors of the Surviving Corporation, respectively,
unless and until removed or until their respective terms of office shall have
expired in accordance with the Delaware Statute, the Surviving Corporation
Charter or the Surviving Corporation By-Laws, as applicable.
1.5 Taking of Necessary Action.
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Prior to the Effective Time, the parties hereto shall do or cause to be
done all such acts and things as may be necessary or appropriate in order to
effectuate the Merger as expeditiously as reasonably practicable in accordance
with this Agreement and the Delaware Statute.
1.6 Tax Free Reorganization.
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(a) For Federal income tax purposes, the parties intend that the Merger be
treated as a tax-free reorganization within the meaning of Section 368(a)(1)(A)
of the Internal Revenue Code of 1986, as amended (the "Code"), by reason of
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Section 368(a)(2)(E) of the Code. The parties shall not take a position on any
tax return inconsistent with this Section 1.6.
(b) None of the parties hereto shall take any action or fail to take any
action that would prevent the Merger from qualifying as a tax-free
reorganization under Section 368(a)(1)(A) of the Code, either before or after
the consummation of the Merger.
1.7 Closing.
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Unless this Agreement shall have been terminated and the transactions
contemplated by this Agreement abandoned pursuant to the provisions of Article
VI, and subject to the provisions of Article V, the closing of the Merger (the
"Closing") will take place at 10:00 a.m. (New York time) on a date (the "Closing
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Date") to be mutually agreed upon by the parties, which date shall be not later
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than the third Business Day after all the conditions set forth in Article V
shall have been satisfied (or waived in accordance with Section 7.10, to the
extent the same may be waived), unless another date is agreed to in writing by
the parties. The Closing shall take place at the offices of X'Xxxxxxxx Graev &
Karabell, LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another
place is agreed to in writing by the parties. As used herein, the term
"Business Day" shall mean any day other than a Saturday, Sunday or day on which
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banks are permitted to close in the City and State of New York.
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ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
2.1 Consideration; Effect on Capital Stock.
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At the Effective Time, subject and pursuant to the terms and conditions of
this Agreement, by virtue of the Merger and without any action on the part of
the Constituent Corporations or the holders of the capital stock of the
Constituent Corporations:
(a) Capital Stock of Acquisition Sub. Each issued and outstanding share
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of common stock, par value $.01 per share, of Acquisition Sub shall be converted
into one share of common stock, par value $.01 per share, of the Surviving
Corporation.
(b) Cancellation of Certain Shares of Target Common Stock. Each share of
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Target Common Stock that is owned by Target as treasury stock shall be cancelled
and no Parent Common Stock or other consideration shall be delivered in exchange
therefor.
(c) Conversion of Target Common Stock for Parent Common Stock. Subject
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to Section 2.2, each share of Target Common Stock issued and outstanding at the
Effective Time (other than shares held by Dissenting Stockholders, if any) shall
be exchanged and converted into the right to receive 4.9 shares of Parent Common
Stock (each, a "Merger Share"). All calculations under this Section 2.1(c) shall
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be rounded to the nearest one thousandth (.001).
(d) Shares of Dissenting Stockholders. Each issued and outstanding share
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of Target Common Stock held by a Dissenting Stockholder, if any, shall not be
exchanged and converted as described in Section 2.1(c) but shall become the
right to receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to the Delaware Statute; provided, however, that
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each share of Target Common Stock issued and outstanding at the Effective Time
and held by a Dissenting Stockholder who or which shall, after the Effective
Time, withdraw his or its demand for appraisal or lose or fail to perfect his or
its right of appraisal as provided in the Delaware Statute shall be deemed, as
of the Effective Time, to be exchanged and converted into Parent Common Stock as
provided in Section 2.1(c), without interest. After the Effective Time, as
provided in the Delaware Statute, no Dissenting Stockholder will be entitled to
vote the shares of Target Common Stock subject to such Dissenting Stockholder's
demand for appraisal for any purpose or be entitled to the payment of dividends
or other distributions on such shares.
2.2 Exchange of Certificates.
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(a) Procedure for Exchange. Immediately following the Effective Time,
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Parent shall deliver to each holder of record (other than Target and any Target
Subsidiary) of a certificate or certificates which immediately prior to the
Effective Time represented issued and outstanding shares of Target Common Stock
(each, an "Old Certificate") a certificate representing that number of Merger
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Shares which such holder has the right to receive pursuant to Section 2.1(c)
with respect to such Old Certificate upon receipt by Parent of (i) such Old
Certificate for cancellation and (ii) an executed stock power, duly endorsed in
blank for transfer
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by such holder, together with such other documents as may be reasonably required
by Parent, and the Old Certificate so surrendered shall forthwith be cancelled.
In the event of a transfer of ownership of shares of Target Common Stock that is
not registered on the transfer records of Target, a new certificate representing
the proper number of shares of Parent Common Stock may be issued to a transferee
if the Old Certificate representing such Target Common Stock is presented to
Parent, accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock or other transfer taxes have
been paid. Until surrendered as contemplated by this Section 2.2, each Old
Certificate shall be deemed, on and after the Effective Time, to represent only
the right to receive upon such surrender, new certificates representing Merger
Shares.
(b) Fractional Shares. No fractional shares of Parent Common Stock
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will be issued in connection with the Merger, but in lieu thereof each holder of
Target Common Stock who would otherwise be entitled to receive a fraction of a
share of Parent Common Stock will receive from Parent, at such time as such
holder shall receive a certificate representing shares of Parent Common Stock as
contemplated by this Section 2.2(b), an amount of cash equal to the product of
(i) $107.80 (the "Target Per Share Value") multiplied by (ii) the fraction of a
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share of Parent Common Stock otherwise issuable to such holder. The fractional
interests of each Stockholder will be aggregated so that no Stockholder will
receive cash in an amount equal to or greater than Target Per Share Value.
(c) No Further Ownership Rights in Target Common Stock. All shares of
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Parent Common Stock issued upon the surrender for exchange of shares of Target
Common Stock in accordance with the terms of this Article II shall be deemed to
have been issued in full satisfaction of all rights pertaining to such shares of
Target Common Stock. If, after the Effective Time, any Old Certificate is
presented to the Surviving Corporation for any reason, such Old Certificate
shall be cancelled and exchanged as provided in this Article II.
(d) No Liability. Neither Parent, Acquisition Sub nor Target shall be
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liable to any holder of shares of Target Common Stock or Parent Common Stock, as
the case may be, for shares (or dividends or distributions with respect thereto)
of Parent Common Stock to be issued in exchange for Target Common Stock pursuant
to this Section 2.2, if, on or after the expiration of six months following the
Effective Date, such shares are delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
2.3 Target Options.
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(a) At the Effective Time, each of Target's then outstanding options
(the "Target Options") to purchase Target Common Stock (including all outstand-
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ing incentive stock options to purchase Target Common Stock (the "Target ISOs")
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non-qualified stock options to purchase Target Common Stock (the "Target NQSOs")
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granted under Target's 1997 Stock Option Plan, as amended (the "Target Option
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Plan") or granted pursuant to rollover option agreements in the form previously
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provided to Parent (the "Rollover Options")), by virtue of the Merger and
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without any further action on the part of any holder thereof, shall be assumed
by Parent and shall be automatically converted into an option (the "Assumed
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Option") to purchase a number of shares of Parent Common Stock that the holder
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of such Target Option would have received had such holder exercised such Option
immediately prior to the Effective Time, at an
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exercise price per share of Parent Common Stock equal to (i) the exercise price
in effect under such Target Option immediately prior to the Effective Time
divided by (ii) the number of Merger Shares to be issued for each share of
Target Common Stock pursuant to Section 2.1(c). The Assumed Option shall contain
the same term, status as an "incentive stock option" under Section 422 of the
Code (if such Target Option was theretofore a Target ISO), vesting schedule
(without acceleration thereof by virtue of the Merger and the transactions
contemplated hereby except as otherwise set forth in any written agreement
between Target and a holder of a Target Option) and otherwise be on
substantially the same terms and conditions as set forth in the assumed Target
Option.
(b) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery upon
exercise of the Assumed Options in accordance with this Section 2.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Target.
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Target represents and warrants to Parent that, except as disclosed in the
disclosure schedule dated the date hereof, certified by an executive officer of
Target and delivered by Target to Parent simultaneously herewith (which
disclosure schedule shall contain specific references to the representations and
warranties to which the disclosures contained therein relate) (the "Target
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Disclosure Schedule"):
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(a) Organization; Good Standing; Qualification and Power. Target and
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each Target Subsidiary (i) is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation, (ii) has all
requisite corporate power, authority and legal right to own, lease and operate
its properties and assets and to carry on its business as now being conducted,
to enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby and (iii) is duly qualified and
in good standing to do business in those jurisdictions listed in Target
Disclosure Schedule and in all other jurisdictions in which the failure to be so
qualified and in good standing could reasonably be expected to have a material
adverse effect on the business, properties, Liabilities, assets, operations,
results of operations, condition (financial or otherwise), prospects or affairs
(a "Material Adverse Effect") of Target taken as a whole. Target has delivered
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to Parent true and complete copies of the Organizational Documents of Target and
each of its Subsidiaries, as amended to the date hereof. As used herein,
"Organizational Documents" means, with respect to any person, each instrument or
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other document that (x) defines the existence of such person, including its
certificate of limited partnership or formation or articles or certificate of
incorporation, as filed or recorded with an applicable Governmental Authority,
or (y) governs the internal affairs of such person, including its limited
liability company agreement, operating agreement, partnership agreement and/or
by-laws.
(b) Equity Investments. Target Disclosure Schedule sets forth a true and
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complete list of each of each Person of which Target owns 50% or more of the
Equity Interests
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(each, a "Target Subsidiary"). Except for Target Subsidiaries or as set forth in
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the Target Disclosure Schedule, Target does not have any subsidiaries and does
not currently own, directly or indirectly, any Equity Interest in any Person. As
used herein, "Equity Interest" means (i) with respect to any corporation, any
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and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including each class
of common stock and preferred stock of such Person and (ii) with respect to any
association, trust, partnership, limited liability, joint venture or other
entity or business (a "Person"), any and all partnership, membership or other
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equity interests.
(c) Capital Stock; Securities. The authorized capital stock of Target
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consists of 400,000 shares of common stock, of which 335,600 shares are issued
and outstanding. Target has reserved 57,657 shares of Target Common Stock for
issuance upon the exercise of Target Options. The authorized, issued and
outstanding capital stock for each Target Subsidiary is set forth on Target
Disclosure Schedule. All outstanding shares of Target Common Stock are validly
issued, fully paid and non-assessable and not subject to preemptive rights.
Target Disclosure Schedule sets forth a true and complete list of the holders of
shares of Target Common Stock and the number and class or series of such shares
owned of record and beneficially by each such holder, and sets forth a true and
complete list of Target Options outstanding as of the date hereof, including the
name of each holder thereof, the class and number of shares of Target Common
Stock subject to each such Target Option and the per share exercise price for
each such Target Option. Except under the Target Option Plan or the option
agreements thereunder or pursuant to the Rollover Option Agreements, there are
no options, warrants, rights, calls, commitments or agreements of any character
to which Target is a party or by which it is bound calling for the issuance of
shares of capital stock of Target or any securities convertible into or
exercisable or exchangeable for, or representing the right to purchase or
otherwise receive, any such capital stock, or other arrangement to acquire, at
any time or under any circumstance, capital stock of Target or any such other
securities. Except under the Target Option Plan or the option agreements
thereunder or pursuant to the Rollover Option Agreements, there are no voting
trusts, voting agreements, proxies, first refusal rights, first offer rights,
co-sale rights, transfer restrictions or other agreements, instruments or
understandings (whether written or oral, formal or informal) with respect to the
voting, transfer or disposition of Target Common Stock to which Target is a
party or by which it is bound, or, to the best knowledge of Target, among or
between any persons other than Target. As used herein, "to the best knowledge of
Target" and like phrases shall mean and include (i) actual knowledge and (ii)
that knowledge which a prudent business person (including the directors,
officers and other key employees of Target) would have obtained in the
management of his or her business affairs after making due inquiry and
exercising due diligence with respect thereto; and, in connection therewith, the
knowledge (both actual and constructive) of any officer, director or other key
employee of Target shall be imputed to be the knowledge of Target.
(d) Authority; No Consents. The execution, delivery and performance of
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this Agreement and the Related Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of Target;
and this Agreement and the Related Agreements to which it is a party have been
duly and validly executed and delivered by Target, and this Agreement and the
Related Agreements to which it is a party are the legal, valid and binding
obligations of Target, enforceable against Target in accordance with their
respective terms.
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Neither the execution, delivery and performance of this Agreement, the Related
Agreements to which it is a party nor the consummation by Target of the
transactions contemplated hereby nor compliance by Target with any provision
hereof will (i) (A) conflict with, (B) result in any violations of, (C) cause a
default under (with or without due notice, lapse of time or both), (D) give rise
to any right of termination, amendment, cancellation or acceleration of any
obligation contained in or the loss of any material benefit under or (E) result
in the creation of any Encumbrance on or against any assets, rights or property
of Target or any Target Subsidiary under any term, condition or provision of (x)
any instrument or agreement to which Target or any Target Subsidiary is a party,
or by which Target or any Target Subsidiary or any of their properties, assets
or rights may be bound, (y) any law, statute, rule, regulation, order, writ,
injunction, decree, permit, concession, license or franchise of any Governmental
Authority applicable to Target, any Target Subsidiary, or any of their
properties, assets or rights or (z) Target's Organizational Documents or (ii)
require the affirmative vote of the holders of greater than a majority of the
issued and outstanding shares of Target Common Stock which has been obtained
prior to the execution and delivery of this Agreement. Except as contemplated by
this Agreement or as set forth in Target Disclosure Schedule, no permit,
authorization, consent or approval of or by, or any notification of or filing
with, any Governmental Authority is required in connection with the execution,
delivery and performance by Target of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which Target is
qualified to do business and (ii) such other consents, waivers, authorizations,
filings, approvals and registrations which if not obtained or made would not
have a Material Adverse Effect on Target, taken as a whole, or materially impair
the ability of Target to consummate the transactions contemplated by this
Agreement, including, without limitation, the Merger.
(e) Financial Information.
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(i) Target has previously delivered to Parent the following
financial statements (collectively, the "Target Financial Statements"):
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(A) the consolidated audited balance sheet (including the
complete footnotes thereto) of Target as at December 31, 1998 (the
"Target Current Balance Sheet") and the related consolidated
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statements of income, cash flow and stockholders' equity for the year
then ended (including footnotes thereto), certified by Ernst & Young
LLP, Target's independent public accountants ("Target's Auditors"),
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and accompanied by a copy of such auditor's report (collectively with
Target Current Balance Sheet, the "Target Current Financial
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Statements"); and
(B) the consolidated audited balance sheets of Target as at
December 31, 1997, and the related consolidated audited statements of
income, cash flow and stockholders' equity for the year ended December
31, 1997 (including footnotes thereto), certified by Target's Auditors
and accompanied by a copy of such auditor's report.
(ii) Target Financial Statements (A) are true and complete, (B)
are in accordance with the books and records of Target (C) fairly present
the financial condition
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of Target as at the respective dates indicated and the
results of operations of Target for the respective periods indicated and
(D) have been prepared in accordance with generally accepted accounting
principles consistently applied ("GAAP").
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(f) Absence of Undisclosed Liabilities. At December 31, 1998, (i) neither
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Target nor any Target Subsidiary had any liability or obligation of any nature
(whether known or unknown, matured or unmatured, fixed or contingent, secured or
unsecured, accrued, absolute or otherwise ("Liability")) required to be set
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forth on Target Current Balance Sheet or in the footnotes thereto in order for
Target Current Balance Sheet to fairly present the financial condition of Target
at the date thereof in accordance with GAAP, which was not provided for or
disclosed thereon, and (ii) all liability reserves established by Target and set
forth thereon were adequate for all such Liabilities at the date thereof. There
were no material loss contingencies (as such term is used in Statement of
Financial Accounting Standards No. 5 issued by the Financial Accounting
Standards Board in March, 1975 ("FAS No. 5")) which were not adequately provided
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for or disclosed on Target Current Balance Sheet as required by FAS No. 5.
(g) Absence of Changes. Since December 31, 1998, Target and Target
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Subsidiaries have been operated in the ordinary course, consistent with past
practice, and there has not been any material adverse change in the business,
assets, properties, Liabilities, operations, results of operations, condition
(financial or otherwise), prospects or affairs (a "Material Adverse Change") of
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Target, taken as a whole.
(h) Tax Matters. Target and each Target Subsidiary (i) has filed and will
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file, in a timely and proper manner, consistent with applicable laws, all
Federal, state and local Tax returns and Tax reports required to be filed by
them through the Closing Date (the "Target Returns") with the appropriate
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governmental agencies in all jurisdictions in which Target Returns are required
to be filed and have paid or will pay all amounts shown thereon to be due; and
(ii) have paid and shall timely pay all Taxes required to have been paid on or
before the Closing Date. All Taxes attributable to all taxable periods ending on
or before the Closing Date, to the extent not required to have been previously
paid, have been adequately provided for on Target Current Balance Sheet and
neither Target nor any Target Subsidiary will accrue a Tax liability from the
date of Target Current Balance Sheet up to and including the Closing Date, other
than a Tax liability accrued in the ordinary course of business. Neither Target
nor any Target Subsidiary has been notified by the Internal Revenue Service or
any state, local or foreign taxing authority that any issues have been raised
(or are currently pending) in connection with any Target Return, and no waivers
of statutes of limitations have been given or requested with respect to Target.
Except as contested in good faith and disclosed in Target Disclosure Schedule,
any deficiencies asserted or assessments (including interest and penalties) made
as a result of any examination by the Internal Revenue Service or by any other
taxing authorities of any Target Return have been fully paid or are adequately
provided for on Target Current Balance Sheet and no proposed additional Taxes
have been asserted. Neither Target nor any Target Subsidiary will incur a Tax
liability resulting from ceasing to be a member of a consolidated or combined
group that had previously filed consolidated, combined or unitary Tax returns.
As used in this Agreement, "Tax" means any of the Taxes and "Taxes" means,
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with respect to any entity, (A) all income taxes (including any tax on or
based upon net income, gross income, income as specially defined, earnings,
profits or selected items of income, earnings or profits) and all gross
receipts, sales, use, ad valorem, transfer, franchise, license, withholding,
payroll, employment, excise,
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severance, stamp, occupation, premium, property or windfall profits taxes,
alternative or add-on minimum taxes, customs duties and other taxes, fees,
assessments or charges of any kind whatsoever, together with all interest and
penalties, additions to tax and other additional amounts imposed by any taxing
authority (domestic or foreign) on such entity and (B) any liability for the
payment of any amount of the type described in the immediately preceding clause
(A) as a result of being a "transferee" (within the meaning of Section 6901 of
the Code or any other applicable law) of another entity or a member of an
affiliated or combined group.
(i) Title to Assets, Properties and Rights and Related Matters. Target and
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each Target Subsidiary has good and marketable title to its assets, properties
and interests in properties, real, personal or mixed, reflected on Target
Current Balance Sheet or acquired after December 31, 1998 (except property sold
or otherwise disposed of since December 31, 1998, in the ordinary course of
business and accounts receivable and notes receivable paid in full subsequent to
December 31, 1998), or not so reflected therein but used or useful in the
conduct or operation of the business of Target, free and clear of all
Encumbrances, of any kind or character, except for (i) those Encumbrances set
forth in Target Disclosure Schedule, (ii) Encumbrances for current Taxes not yet
due and payable and (iii) statutory mechanics and materialmen's liens. The
assets, properties and interests in properties of Target are in good operating
condition and repair in all material respects (ordinary wear and tear excepted).
The assets, properties and interests in properties of Target to be owned, leased
or licensed by the Surviving Corporation at the Effective Time shall include all
assets, properties and interests in properties (real, personal and mixed,
tangible and intangible) and all rights, leases, licenses and other agreements
necessary to enable the Surviving Corporation to carry on the business of Target
and Target Subsidiaries as presently conducted. As used herein, the term
"Encumbrances" shall mean and include security interests, mortgages, liens,
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pledges, guarantees, charges, easements, reservations, restrictions, clouds,
equities, rights of way, options, rights of first refusal and all other
encumbrances, whether or not relating to the extension of credit or the
borrowing of money.
(j) Real Property-Owned or Leased. Neither Target nor any Target
-----------------------------
Subsidiary currently owns, nor have they ever owned, any real property. Target
Disclosure Schedule contains a list all real property leased by Target or any
Target Subsidiary (the "Leased Real Property"). Either Target or a Target
--------------------
Subsidiary, is the owner and holder of all the leasehold estates purported to be
granted by each Lease and all Leases are in full force and effect and constitute
valid and binding obligations of Target. Target has made available to Parent
true and complete copies of all Leases. All improvements included in the Leased
Real Property are in good operating condition and repair in all material
respects (ordinary wear and tear excepted) and there does not exist any
condition which interferes with the economic value or use of such property and
improvements.
(k) Intellectual Property. Target, and each Target Subsidiary, has the
---------------------
right to use, sell, license and dispose of, has the right to bring actions for
the infringement of, and, where necessary, has made timely and proper
application for all Intellectual Property Rights necessary for the conduct of
its business as presently conducted and as presently proposed to be conducted
(such Intellectual Property Rights, collectively, the "Target Requisite Rights")
-----------------------
and such rights to use, sell, license, dispose of and bring actions are
exclusive with respect to Target Requisite Rights developed by Target or any
Target Subsidiary and are sufficient for such conduct of their
9
business in the case of all other Target Requisite Rights. As used herein, the
term "Intellectual Property Rights" shall mean all industrial and intellectual
----------------------------
property rights, including, without limitation, patents, patent applications,
patent rights, trademarks, trademark applications, trade names, service marks,
service xxxx applications, copyrights, copyright applications, franchises,
licenses, inventories, know-how, trade secrets, proprietary processes and
formulae, all source and object code, algorithms, architecture, structure,
display screens, layouts, inventions, development tools and all documentation
and media constituting, describing or relating to the above, including, without
limitation, manuals, memoranda and records.
(l) Agreements, Etc. Target Disclosure Schedule sets forth a true and
----------------
complete list of all written or oral contracts, agreements and other instruments
not made in the ordinary course of business to which either Target or any Target
Subsidiary is a party, or made in the ordinary course of business and referred
to in any of the following clauses:
(i) any material contract relating to the payment of a commission or
other fee calculated as or by reference to a percentage of the profits or
revenues of Target;
(ii) any joint venture, partnership or other agreement or arrangement
for the sharing of profits;
(iii) any collective bargaining contract or other contract with or
commitment to any labor union;
(iv) the future purchase, sale or license of products, material,
supplies, equipment or services requiring payments to or from Target or any
Target Subsidiary in an amount in excess of $100,000 per annum, which
agreement, arrangement or understanding is not terminable on 60 days'
notice without cost or other liability at or at any time after the
Effective Time, or in which Target or any Target Subsidiary has granted or
received most favored pricing provisions or exclusive marketing or other
rights relating to any services, assets or territory;
(v) the employment of any officer, employee, consultant or agent or
any other type of contract, commitment or understanding with any officer,
employee, consultant or agent which (except as otherwise generally provided
by applicable law) is not immediately terminable without cost or other
liability at or at any time after the Effective Time;
(vi) profit-sharing, bonus, stock option, stock appreciation right,
pension, retirement, disability, stock purchase, hospitalization, insurance
or similar plan or agreement, formal or informal, providing benefits to any
current or former director, officer, employee or consultant;
(vii) indenture, mortgage, promissory note, loan agreement, guarantee
or other agreement or commitment for the borrowing of money, for a line of
credit or for a leasing transaction of a type required to be capitalized in
accordance with Statement of Financial Accounting Standards No. 13 of the
Financial Accounting Standards Board;
10
(viii) any agreement, instrument or other arrangement granting or
permitting any Encumbrance on any of the properties, assets or rights of
Target;
(ix) any lease for real property (whether as lessor or lessee) or any
other lease or agreement under which Target or any Target Subsidiary is
lessee of or holds or operates any items of tangible personal property
owned by any third party;
(x) contracts or commitments for charitable contributions;
(xi) contract or commitment for capital expenditures individually in
excess of $25,000 or in the aggregate in excess of $100,000
(xii) any agreement or contract with a "disqualified individual" (as
defined in Section 280G(c) of the Code), which could result in a
disallowance of the deduction for any "excess parachute payment" (as
defined in Section 280G(b)(i) of the Code) under Section 280G of the Code;
(xiii) agreement or arrangement for the sale of any assets, properties
or rights having a value in excess of $100,000;
(xiv) agreement which restricts Target from engaging in any aspect of
its business or competing in any line of business in any geographic area;
or
(xv) any other agreement, contract or commitment that is material to
Target. For purposes of this Section 3.1(l), the term "material", as used
herein, shall mean and refer to those agreements, contracts, instruments or
arrangements (as applicable) that involve payments by or to Target, or otherwise
have a value, of at least $100,000. Target has furnished to Parent true and
complete copies of all such agreements listed in Target Disclosure Schedule and
(x) each such agreement (A) is the legal, valid and binding obligation of
Target, as the case may be, and the legal, valid and binding obligation of each
other party thereto, in each case enforceable in accordance with its terms, (B)
is in full force and effect and (y) to the best knowledge of Target, the other
party or parties thereto is or are not in material default thereunder.
(m) Certain Additional Regulatory Matters.
-------------------------------------
None of (i) Target, any affiliate of Target, or, the officers, directors,
or agents or managing employees (within the meaning of 42 U.S.C. (S) 1320a-
7(b)(8)) of Target or any affiliate, (ii) to the best of Target's knowledge, any
of the Persons having a direct or indirect ownership interest in Target or any
of its Subsidiaries within the meaning of Section 1320a-7(b)(8) of Title 42 of
the United States Code or (iii) to the best of Target's knowledge, any of the
Persons who provide professional services under agreements with any of Target or
any affiliate as agents of such entities, have engaged in any activities which
constitute violations of, or are cause for imposition of civil penalties upon
Target or mandatory or permissive exclusion of Target 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, or the regulations promulgated pursuant to such statutes or
regulations or related state or local statutes.
11
(n) Medicare/Medicaid Participation; Accreditation.
----------------------------------------------
(i) Neither Target, any Target Subsidiary, nor any existing officers
or directors of Target or any Target Subsidiary who (based on advice by
Parent to Target) 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
Surviving Corporation: (A) has had a civil monetary penalty assessed
against it under Section 1128A of the SSA or any regulations promulgated
thereunder; (B) has 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 or a federal health care program as
defined in SSA Section 1128B(f); or (C) has been convicted (as that term is
defined in 42 C.F.R. Section 1001.2) of any offense as described in SSA
Section 1128(a) and (b)(1), (2), (3) or any regulations promulgated
thereunder.
(ii) Target or a Target Subsidiary, as appropriate, 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 Target
bills directly to Medicare for services furnished by Target.
(iii) Target or a Target Subsidiary, as appropriate, has a Medicaid
number and a participating provider agreement in each state, as applicable, in
which Target bills directly to such states' Medicaid agency for services
provided by Target.
(o) No Defaults. Target and each Target Subsidiary has in all material
-----------
respects performed all the obligations required to be performed by it to date
and is not in default or alleged to be in default under (i) its Organizational
Documents or (ii) any material agreement, lease, contract, commitment,
instrument or obligation to which it is a party or by which any of its
properties, assets or rights are or may be bound or affected, and there exists
no event, condition or occurrence which, with or without due notice or lapse of
time, or both, would constitute such a default by it of any of the foregoing.
(p) Litigation, Etc. There are no (i) actions, suits, claims,
---------------
investigations or legal or administrative or arbitration proceedings
(collectively, "Actions") pending or, to the best knowledge of Target,
----------------------
threatened against Target or any Target Subsidiary, whether at law or in equity,
or before or by any Federal, state, municipal, foreign or other governmental
court, department, commission, board, bureau, agency or instrumentality
("Governmental Authority") or (ii) judgments, decrees, injunctions or orders of
----------------------
any Governmental Authority or arbitrator against Target or any Target
Subsidiary.
(q) Accounts and Notes Receivable. All the accounts receivable and notes
-----------------------------
receivable owing to Target or any Target Subsidiary as of the date hereof
constitute, and as of the Effective Time will constitute, legal, valid and
enforceable claims arising from bona fide transactions in the ordinary course of
business, and there are no asserted claims, refusals to pay or other rights of
set-off against any thereof. Except as set forth in the Target Disclosure
Schedule, there is (i) no account debtor or note debtor delinquent in its
payment by more than 90 days for payments of an amount in excess of $20,000,
(ii) no account debtor or note debtor that
12
has refused (or, to the best knowledge of Target, threatened to refuse) to pay
its obligations for any reason, (iii) no account debtor or note debtor that is
insolvent or bankrupt and (iv) no account receivable or note receivable which is
pledged to any third party by Target or any Target Subsidiary.
(r) Accounts and Notes Payable. All accounts payable and notes payable by
--------------------------
Target or any Target Subsidiary to third parties as of the date hereof arose,
and as of the Closing will have arisen, in the ordinary course of business, and,
except as set forth in Target Disclosure Schedule, there is no such account
payable or note payable delinquent in its payment, except those contested in
good faith and disclosed in Target Disclosure Schedule.
(s) Compliance; Governmental Authorizations. Target, and each Target
---------------------------------------
Subsidiary, has complied and is presently in compliance in all material respects
with all material Federal, state, local or foreign laws, ordinances, regulations
and orders applicable to them or their business. Target, and each Target
Subsidiary, has all material Federal, state, local and foreign governmental
authorizations, consents, approvals, licenses and permits necessary in the
conduct of their business as presently conducted, such authorizations, consents,
approvals, licenses and permits are in full force and effect, no violations are
or have been recorded in respect of any thereof and no proceeding is pending or,
to the best knowledge of Target, threatened to revoke or limit any thereof.
Target Disclosure Schedule contains a true and complete list of all such
governmental licenses, authorizations, consents, approvals, permits, orders,
decrees and other compliance agreements under which Target or any Target
Subsidiary is operating or bound, neither Target nor any Target Subsidiary is in
default or alleged to be in default under any thereof and Target has furnished
to Parent true and complete copies thereof. None of such authorizations,
consents, approvals, licenses and permits shall be affected in any material
respect by the Merger or the transactions contemplated hereby.
(t) Environmental Matters.
---------------------
Target and each Target Subsidiary currently is and at all times has
been in material compliance with all Federal, state and local laws, ordinances,
regulations and orders relating to the protection of the environment applicable
to its properties, facilities or operations (the "Environmental Laws"). Neither
------------------
Target nor any Target Subsidiary has received any notice or other communication
alleging the violation by it of any Environmental Law.
(u) Labor Relations; Employees. Except as set forth in Target Disclosure
--------------------------
Schedule, (i) neither Target nor any Target Subsidiary is delinquent in payments
to any of its employees for any wages, salaries, commissions, bonuses or other
direct compensation for any services performed by them to date or amounts
required to be reimbursed to such employees, (ii) upon termination of the
employment of any such employees, neither Target, any Target Subsidiary, Parent,
Acquisition Sub nor the Surviving Corporation will by reason of anything done
prior to the Closing be liable to any of such employees for so-called "severance
pay" or any other payments, (iii) Target and each Target Subsidiary is in
compliance in all material respects with all material Federal, state, local and
foreign laws and regulations respecting labor, employment and employment
practices, terms and conditions of employment and wages and hours, (iv) there is
no unfair labor practice complaint against Target or any Target Subsidiary
pending before the National Labor Relations Board or any comparable state, local
or foreign
13
agency, (v) there is no labor strike, dispute, slowdown or stoppage actually
pending or, to the best knowledge of Target, threatened against or involving
Target or any Target Subsidiary, (vi) no labor union has taken any action with
respect to organizing the employees of Target or any Target Subsidiary, (vii)
neither any grievance which might have a Material Adverse Effect on Target or
any Target Subsidiary, taken as a whole, or the conduct of its business nor any
arbitration proceeding arising out of or under collective bargaining agreements
is pending and no claim therefor has been asserted against Target or any Target
Subsidiary and (viii) no employee has informed Target or any Target Subsidiary
that such employee will terminate his or her employment or engagement with
Target, such Target Subsidiary or the Surviving Corporation.
(v) Employee Benefit Plans and Contracts.
------------------------------------
(i) Target Disclosure Schedule identifies each "employee benefit
plan", as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other material written
-----
or formal plans or agreements involving direct or indirect compensation
(including any employment agreements entered into between Target or any
Target Subsidiary and any Employee of Target or any Target Subsidiary, but
excluding workers' compensation, unemployment compensation, other
government-mandated programs and the salary and wage arrangements)
currently or previously maintained, contributed to or entered into by
Target or any ERISA Affiliate thereof for the benefit of any Employee or
former Employee under which Target or any ERISA Affiliate thereof has any
present or future obligation or liability (the "Employee Plans"). Target
--------------
has made available to Parent true and complete copies of all Employee Plans
(and, if applicable, related trust agreements) and all amendments thereto
and written interpretations thereof. For purposes of the preceding
sentence, "ERISA Affiliate" shall mean any entity which is a member of (A)
---------------
a "controlled group of corporations", as defined in Section 414(b) of the
Code, (B) a group of entities under "common control", as defined in Section
414(c) of the Code or (C) an "affiliated service group", as defined in
Section 414(m) of the Code or treasury regulations promulgated under
Section 414(o) of the Code, any of which includes Target. Any Employee
Plans which individually or collectively would constitute an "employee
pension benefit plan", as defined in Section 3(2) of ERISA, but which are
not Multiemployer Plans (collectively, the "Pension Plans"), are identified
-------------
as such in Target Disclosure Schedule. For purposes of this Section
3.1(v), "Employee" means any common law employee, consultant or director of
--------
Target or any Target Subsidiary.
-------------------------------
(ii) Each Employee Plan that is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to the date hereof, and each trust forming a part
thereof is exempt from tax pursuant to Section 501(a) of the Code. Target
has provided Parent with copies of the most recent Internal Revenue Service
determination letters with respect to any such Employee Plans. Each
Employee Plan has been maintained substantially in compliance with its
terms and with the requirements prescribed by any and all statutes, orders,
rules and regulations, including, without limitation, ERISA and the Code,
which are applicable to such Employee Plans.
14
(iii) Except as set forth in Target Disclosure Schedule, no Employee
Plan constitutes or since the enactment of ERISA has constituted a
"multiemployer plan", as defined in Section 3(37) of ERISA (a
"Multiemployer Plan"). Target has not within the past five years incurred
------------------
any material liability under Title IV of ERISA arising in connection with
the termination of any Pension Plan or the complete or partial withdrawal
from any Multiemployer Plan. Except as disclosed in Target Disclosure
Schedule, if a "complete withdrawal" by Target were to occur as of the
Closing with respect to all Multiemployer Plans, Target would not incur any
withdrawal liability under Title IV of ERISA .
(iv) Target Disclosure Schedule lists each employment, severance or
other similar contract, arrangement or policy and each plan or arrangement
(written or oral) providing for insurance coverage (including any self-
insured arrangements), workers' benefits, vacation benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock options,
stock appreciation or other forms of incentive compensation or post-
retirement insurance, compensation or benefits which (A) is not an Employee
Plan, (B) is entered into, maintained or contributed to, as the case may
be, by Target or any Target Subsidiary, (C) covers any Employee or former
Employee and (D) under which Target or Target Subsidiary has any present or
future obligation or liability. Such contracts, plans and arrangements as
are described above are hereinafter referred to collectively as the
"Benefit Arrangements". Each Benefit Arrangement has been maintained in
---------------------
substantial compliance with its terms and with the requirements prescribed
by any and all material laws, statutes, rules, regulations, orders and
judgments which are applicable to such Benefit Arrangements.
(v) Target has provided, or will have provided, to individuals
entitled thereto who are current or former Employees of Target or any
Target Subsidiary all required notices within the applicable time period
and coverage pursuant to Section 4980B of the Code with respect to any
"qualifying event" (as defined in Section 4980B(f)(3) of the Code)
occurring prior to and including the Closing Date, and no tax payable on
account of Section 4980B of the Code has been incurred with respect to any
current or former Employees of Target.
(w) Certain Agreements. Except as set forth in the Target Disclosure
------------------
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including, without limitation, severance, unemployment compensation,
golden parachute, bonus or otherwise) becoming due to any director or employee
of Target or any Target Subsidiary from Target or such Target Subsidiary, under
any Employee Plan, Benefit Arrangement or otherwise, (ii) materially increase
any benefits otherwise payable under any Employee Plan or Benefit Arrangement or
(iii) result in the acceleration of the time of payment or vesting of any such
benefits, including, without limitation, any Target Options.
(x) Insurance. Target Disclosure Schedule contains a list of all policies
---------
of liability, theft, fidelity, fire, product liability, workmen's compensation,
indemnification of directors and officers and other similar forms of insurance
held by Target or any Target Subsidiary (specifying the insurer, the amount of
coverage, the type of insurance and the policy
15
number). All such policies of insurance are in full force and effect and all
premiums with respect thereto are currently paid and, to the best knowledge of
Target, no basis exists for termination of any thereof on the part of the
insurer. The amounts of coverage under such policies of insurance are adequate
for the assets and properties of Target. Target has not, during the last three
fiscal years, been denied or had revoked or rescinded any policy of insurance.
(y) Bank Accounts; Powers of Attorney. Target Disclosure Schedule sets
---------------------------------
forth a true and complete list of (i) all bank accounts and safe deposit boxes
of Target and each Target Subsidiary and all persons who are signatories
thereunder or who have access thereto and (ii) the names of all Persons holding
general or special powers of attorney from Target or any of its subsidiaries and
a summary of the terms thereof.
(z) Brokers. Target has not, nor has any of its officers, directors,
-------
stockholders or employees, employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby.
(aa) Disclosure. Neither this Section 3.1 (including Target Disclosure
----------
Schedule) nor any document, written information, statement, financial statement,
certificate or exhibit furnished or to be furnished to Parent or Acquisition Sub
by or on behalf of Target or any Stockholder pursuant hereto or in connection
with the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements or facts contained herein and therein
not misleading in light of the circumstances under which they were made.
(bb) Year 2000. To the best knowledge of Target, prior to December 31,
---------
1999, all material hardware and software products that are intended to be used
by Target and each Target Subsidiary in the administration and the business
operations of Target will be able to accurately process date data (including,
but not limited to calculating, comparing and sequencing) from, into and between
the twentieth century (through 1999), the year 2000 and the twenty-first
century, including leap year calculations, when used in accordance with the
product documentation accompanying such hardware and software products, except
to the extent that any such failure to accurately process date data would not
result in a Material Adverse Change.
3.2 Representations and Warranties of Parent.
----------------------------------------
Parent represents and warrants to Target that, except as disclosed in (i)
the Parent SEC Documents or (ii) the disclosure schedule dated the date hereof,
certified by an executive officer of Parent and delivered by Parent to Target
simultaneously herewith (which disclosure schedule shall contain specific
references to the representations and warranties to which the disclosures
contained therein relate) (the "Parent Disclosure Schedule"):
--------------------------
(a) Organization; Good Standing; Qualification and Power. (i) Parent and
----------------------------------------------------
each Parent Subsidiary (other than Acquisition Sub) is, and upon its formation,
Acquisition Sub will be, a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation, and (ii) Parent and
each Parent Subsidiary (other than Acquisition Sub) has and upon its formation,
Acquisition Sub will have, all requisite corporate power, authority and legal
right to own, lease and operate its properties and assets and to carry on its
business as
16
now being conducted, to enter into this Agreement and each of the Related
Agreements to which it is a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby
and (iii) Parent and each Parent Subsidiary (other than Acquisition Sub) is and
upon its formation, Acquisition Sub will be, duly qualified and in good standing
to do business in all jurisdictions in which the failure to be so qualified and
in good standing could reasonably be expected to have a Material Adverse Effect
on Parent. Parent has delivered or made available to Target true and complete
copies of the Organizational Document of Parent and each Parent Subsidiary, as
amended to the date hereof, and after the formation of Acquisition Sub, will
provide to Target, upon request, the Organizational Documents of Acquisition
Sub.
(b) Equity Investments. The Parent Disclosure Schedule sets forth a true
------------------
and complete list of each Person of which the Parent owns 50% or more of the
Equity Interests (the "Parent Subsidiaries"). Except for the Parent Subsidiaries
-------------------
or as otherwise set forth in the Parent Disclosure Letter, Parent does not have
any subsidiaries.
(c) Capital Stock; Securities. Parent's Form 10-K filed with the SEC with
-------------------------
respect to the fiscal year ended December 31, 1998 (the "Form 10-K"), sets forth
---------
the number of authorized and outstanding shares of capital stock of Parent as of
such date. All outstanding shares of Parent Common Stock are validly issued,
fully paid and non-assessable and not subject to preemptive rights. Except as
set forth in the Parent SEC Documents or the Parent Disclosure Schedule, there
are no options, warrants, rights, calls, commitments or agreements of any
character to which Parent is a party or by which it is bound calling for the
issuance of shares of capital stock of Parent or any securities convertible into
or exercisable or exchangeable for, or representing the right to purchase or
otherwise receive, any such capital stock, or other arrangement to acquire, at
any time or under any circumstance, capital stock of Parent or any securities
convertible into or exercisable or exchangeable for, or representing the right
to purchase or otherwise receive, any such capital stock, or other arrangement
to acquire, at any time or under any circumstance, capital stock of Parent or
any such other securities. Except as set forth in the Parent SEC Documents, the
Amended and Restated 1991 Stock Option Plan, the 1997 Stock Option Plan or the
Registration Rights Agreement dated December 18, 1997 between Parent and Newport
Investment LLC, there are no voting trusts, voting agreements, proxies, first
refusal rights, first offer rights, co-sale rights, transfer restrictions or
other agreements, instruments or understandings (whether written or oral, formal
or informal) with respect to the voting, transfer or disposition of Parent
Common Stock to which Parent is a party or by which it is bound, or, to the best
knowledge of Parent, among or between any persons other than Parent. All
outstanding shares of the capital stock of each Parent Subsidiary (other than
Acquisition Sub) are, and upon its formation all outstanding shares of capital
stock of Acquisition Sub will be, validly issued, fully paid and nonassessable
and owned by Parent, free and clear of all Encumbrances. Immediately prior to
the Closing, there will be no options, warrants, rights, calls, commitments or
agreements of any character to which Parent or any Parent Subsidiary is a party
or by which it is bound calling for the issuance of shares of capital stock of
any Parent Subsidiary or any securities convertible into or exchangeable for, or
representing the right to purchase or otherwise receive, any such capital stock,
other arrangement to acquire, at any time or under any circumstances, capital
stock of any Parent Subsidiary or any such other securities. Parent has duly
authorized and reserved for issuance the Merger Shares, and, when issued in
accordance with the terms of Article II, the Merger Shares will be validly
issued, fully paid and
17
nonassessable and free of preemptive rights. There shall exist as of the Closing
a sufficient number of authorized but unissued shares of Parent Common Stock to
allow for the exercise in full of the Assumed Options. As used herein, "to the
best knowledge of Parent" and like phrases shall mean and include (i) actual
knowledge and (ii) that knowledge which a prudent business person (including the
directors, officers and other key employees of Parent) would have obtained in
the management of his or her business affairs after making due inquiry and
exercising due diligence with respect thereto; and, in connection therewith, the
knowledge (both actual and constructive) of any officer, director or other key
employee of Parent shall be imputed to be the knowledge of Parent.
(d) Authority and Consents. The execution, delivery and performance of
----------------------
this Agreement and each of the Related Agreements by Parent and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Parent and, upon its formation,
will have been duly authorized by all necessary action on the part of
Acquisition Sub. This Agreement and each of the Related Agreements are legal,
valid and binding obligations of Parent, enforceable against Parent in
accordance with their respective terms, and upon execution of a joinder
agreement by Acquisition Sub, will be legal, valid and binding obligations of
Acquisition Sub, enforceable against Acquisition Sub in accordance with its
terms. Neither the execution, delivery and performance of this Agreement and the
Related Agreements by Parent (or after its formation, Acquisition Sub), nor the
consummation of the transactions contemplated hereby or thereby, will (i) (A)
conflict with, (B) result in any violations of, (C) cause a default under (with
or without due notice, lapse of time or both), (D) give rise to any right of
termination, amendment, cancellation or acceleration of any obligation contained
in or the loss of any material benefit under, (E) result in the creation of any
Encumbrance on or against any assets, rights or property of Parent or
Acquisition Sub, as the case may be, under any term, condition or provision of
(x) any instrument or agreement to which Parent or any Parent Subsidiary is a
party, or by which Parent or any Parent Subsidiary or any of their respective
properties, assets or rights may be bound, (y) any law, statute, rule,
regulation, order, writ, injunction, decree, permit, concession, license or
franchise of any Governmental Authority applicable to Parent or, after its
formation, Acquisition Sub or any of their respective properties, assets or
rights or (z) Parent's or after its formation, Acquisition Sub's, Organizational
Documents or (ii) require the affirmative vote of the holders of greater than a
majority of the stockholders of Acquisition Sub. Except as contemplated by this
Agreement, no permit, authorization, consent or approval of or by, or any
notification of or filing with, any Governmental Authority is required in
connection with the execution, delivery and performance by Parent of this
Agreement or the Related Agreements to which they are party or the consummation
of the transactions contemplated hereby or thereby, except for (i) the filing
with the SEC of such reports and information under the Securities and Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
------------
promulgated by the SEC thereunder, as may be required in connection with this
Agreement and the transactions contemplated hereby, (ii) the filing of such
documents with, and the obtaining of such orders from, various state securities
and blue sky authorities as are required in connection with the transactions
contemplated hereby, (iii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, (iv) consent under the Credit
Agreement among Target, SMT Health Services Inc., Bankers Trust Company and the
Various Lending Institutions party thereto, as it has been amended through the
date hereof and (v) such other consents, waivers, authorizations, filings,
approvals and registrations which if not obtained or made would
18
not have a Material Adverse Effect on Parent, or materially impair the ability
of Parent or Acquisition Sub to consummate the transactions contemplated by this
Agreement, including, without limitation, the Merger.
(e) SEC Documents. Parent has furnished or made available Target with a
-------------
correct and complete copy of each report, schedule, registration statement and
definitive proxy statement filed by Parent with the SEC on or after January 1,
1998 (the "Parent SEC Documents"), which are all the documents (other than
--------------------
preliminary material) that Parent was required to file (or otherwise did file)
with the SEC on or after January 1, 1998. As of their respective dates, none of
the Parent SEC Documents (including all exhibits and schedules thereto and
documents incorporated by reference therein) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and the Parent SEC
Documents complied when filed in all material respects with the then applicable
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations promulgated by the SEC thereunder. The financial
statements of Parent included in the Parent SEC Documents complied as to form in
all material respects with the then applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with GAAP during the periods involved (except as may have been
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by Form 10-Q promulgated by the SEC) and fairly present (subject, in
the case of the unaudited statements, to normal audit adjustments) the
consolidated financial position of Parent and its subsidiaries as at the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended.
ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR
TO EFFECTIVE TIME; ADDITIONAL AGREEMENTS
4.1 Access to Records and Properties; Confidentiality.
-------------------------------------------------
(a) From and after the date hereof until the Effective Time or the
earlier termination of this Agreement pursuant to Section 6.1 hereof (the
"Executory Period"), Target shall afford: (i) to the officers, independent
----------------
certified public accountants, legal counsel and other representatives of the
Parent, free and full access at all reasonable times to all of its properties,
books and records (including tax returns filed and those in preparation), in
order that the Parent and such other persons may have full opportunity to make
such investigations as they shall reasonably desire to make of the business and
affairs of Target; and (ii) to the independent certified public accountants of
the Parent, free and full access at all reasonable times to the work papers of
the independent certified public accountants for Target. Additionally, Target
will permit the Parent, its officers, directors, auditors, legal counsel and
other representatives to make such reasonable inspections of it and its
operations during normal business hours as the Parent may reasonably require and
Target will cause its officers to furnish to the Parent and such other persons,
such additional financial and operating data and other information as to its
business and properties as the Parent or such other persons shall from time to
time reasonably request. No
19
investigation pursuant to this Section 4.1, or made prior to the date hereof,
shall affect or otherwise diminish or obviate in any respect any of the
representations and warranties of Target.
4.2 Target Conduct.
--------------
During the Executory Period, Target will, and will cause Target
Subsidiaries to operate its business as now operated and only in the normal and
ordinary course and, consistent with such operation, will use its best efforts
to preserve intact its present business organization, to keep available the
services of its officers and employees and to maintain satisfactory
relationships with customers and other persons having business dealings with it.
Without limiting the generality of the foregoing, without the prior written
consent of Parent, Target shall not, and shall not permit (except as expressly
permitted by this Agreement or with the other party's consent, which consent
will not be unreasonably withheld):
(a) (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock (other than cash dividends
and distributions by a wholly-owned Target Subsidiary to Target or to a Target
Subsidiary all of the capital stock of which is owned directly or indirectly by
Target), (ii) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities or stock options 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 Target
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 (other than pursuant to the exercise of any Target Option), 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;
(c) amend its 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 or (ii) any assets except for the purchase of
equipment or other assets in the ordinary course of business, including, without
the Parent's consent, any such acquisition or agreement pursuant to any letter
of intent or other arrangement pursuant to which Target or any Target Subsidiary
is a party;
(e) sell, lease, license, mortgage or otherwise encumber or subject to any
Encumbrance 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) and (iii) where the amount of such sales does not exceed, individually or
in the aggregate, $100,000;
(f) except in the ordinary course of business consistent with past
practice (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 Target or any Target Subsidiary, 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
20
(other than advances to Target 's Subsidiaries or among Target 's Subsidiaries)
or capital contributions to, or investments in, any other person;
(g) from the date hereof through the Closing Date, make or agree to make any
capital expenditure or expenditures with respect to property, plant or equipment
for an amount in excess of $50,000, except to the extent such capital
expenditures have been committed to prior to the date hereof and have been
disclosed to Parent;
(h) make any material tax election or settle or compromise any material
income tax liability;
(i) pay, discharge, settle or satisfy any material 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 Target Current Balance
Sheet (or the notes thereto) or incurred thereafter in the ordinary course of
business consistent with past practice, or waive any material benefits of, or
agree to modify any confidentiality, standstill, non-solicitation or similar
agreement to which Target or any Target Subsidiary is a party;
(j) modify, amend in any material respect or terminate any material contract
to which Target or any Target Subsidiary is a party, or waive, release or assign
any material rights or claims thereunder, other than in the ordinary course of
business consistent with past practice;
(k) except as required to comply with applicable law or with the Parent's
consent, (i) adopt, enter into, terminate or amend any Employee 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-officer or non- key employees,
in the ordinary course of business consistent with past practice, (ii) increase
in any manner the compensation or fringe benefits of, or pay any bonus to, any
director, officer or key employee except pursuant to existing written agreements
(calculations of which shall be supplied to Parent prior to payment), (iii) pay
any material benefit not provided for under any Employee Plan, (iv) except as
permitted in clause (ii), grant any awards under any bonus, incentive,
performance or other compensation plan or arrangement or Employee 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 Employee Plans or agreement or awards made
thereunder), (v) accelerate the vesting of any Target Option or (vi) take any
action to fund or in any other way secure the payment of compensation or
benefits under any employee plan, agreement, contract or arrangement or Employee
Plan; or
(l) authorize any of, or commit or agree to take any of, the foregoing
actions.
4.3 Parent Conduct.
--------------
During the Executory Period, the Parent will, and will cause it
Subsidiaries to operate its business as now operated and only in the normal and
ordinary course and, consistent with such operation, will use its best efforts
to preserve intact its present business organization, to keep
21
available the services of its officers and employees and to maintain
satisfactory relationships with customers and other persons having business
dealings with it.
4.4 Dissenting Stockholders.
-----------------------
Prior to the Closing, Target shall give Parent (a) prompt notice of any
demand by Stockholders (the "Dissenting Stockholders") for purchase of their
-----------------------
shares of Target Common Stock at fair value in the manner provided by Section
262 of the Delaware Statute and (b) the opportunity to participate in all
negotiations and proceedings with respect to any such demands. Prior to the
Closing, Target shall not, except with the prior written consent of Parent,
voluntarily make any payment with respect to, or settle or offer to settle, any
such demands for payment.
4.5 Advice of Changes.
-----------------
Target and Parent shall confer on a regular and frequent basis with each
other, report on operational matters and promptly advise the other party orally
and in writing of any change, event or circumstance having, or which, insofar as
can reasonably be foreseen, could have, a Material Adverse Effect on it.
4.6 Financial Information Update.
----------------------------
(a) During the Executory Period, Target shall:
(i) prepare and deliver to Parent, within twenty (20) business
days after the end of each calendar month during the Executory Period, its
unaudited consolidated balance sheet as at the end of such calendar month
and the related consolidated statements of income, cash flow and
stockholders' equity for the period then ended, which shall be (i) true and
correct, (ii) in accordance with the books and records of Target, (iii)
fairly present the financial condition of Target as at the respective dates
indicated and the results of operations of Target and Target Subsidiaries
for the respective periods indicated, and (iv) have been prepared in
accordance with GAAP (except for the absence of footnotes);
(ii) prepare and deliver on a weekly basis, a summary of the
material developments (if any) in the business or prospects of Target
occurring during such period; and
(iii) furnish upon request of Parent, such other financial
information as is available to management of Target.
(b) During the Executory Period, Parent shall furnish to Target all
documents filed by Parent with the Commission.
4.7 Acquisition Sub.
---------------
Prior to the Effective Time, Parent will form a new corporation in the
state of Delaware ("Acquisition Sub") and cause Acquisition Sub to sign a
---------------
joinder to this Agreement, becoming a party to this Agreement as if an original
signatory hereto.
22
4.8 Legal Conditions to Merger.
--------------------------
Each Party shall take all reasonable actions necessary to comply promptly
with all legal requirements which may be imposed on such Party with respect to
the Merger and will take all reasonable action necessary to cooperate with and
furnish information to the other Party in connection with any such requirements
imposed upon such other Party in connection with the Merger. Each Party shall
take all reasonable actions necessary (a) to obtain (and will take all
reasonable actions necessary to promptly cooperate with the other Party in
obtaining) any consent, authorization, order or approval of, or any exemption
by, any Governmental Authority, or other third party, required to be obtained or
made by such Party (or by the other Party) in connection with the Merger or the
taking of any action contemplated by this Agreement, (b) to defend, lift,
rescind or mitigate the effect of any lawsuit, order, injunction or other action
adversely affecting the ability of such Party to consummate the transactions
contemplated hereby and (c) to fulfill all conditions precedent applicable to
such Party pursuant to this Agreement.
4.9 Consents.
--------
Each Party shall use its best efforts, and the other Party shall cooperate
with such efforts, to obtain any consents and approvals of, or effect the
notification of or filing with, each person or authority, whether private or
governmental, whose consent or approval is required in order to permit the
consummation of the Merger and the transactions contemplated hereby and to
enable the Surviving Corporation to conduct and operate the business of Target
substantially as presently conducted.
4.10 Efforts to Consummate.
---------------------
Subject to the terms and conditions herein provided, the Parties shall use
their best efforts to do or cause to be done all such acts and things as may be
necessary, proper or advisable, consistent with all applicable laws and
regulations, to consummate and make effective the transactions contemplated
hereby and to satisfy or cause to be satisfied all conditions precedent that are
set forth in Article V as soon as reasonably practicable.
4.11 Notice of Prospective Breach.
----------------------------
Target shall immediately notify the Parent in writing upon the occurrence
of any act, event, circumstance or thing that is reasonably likely to cause or
result in a representation or warranty hereunder to be untrue at the Closing,
the failure of a closing condition to be achieved at the Closing or any other
breach or violation hereof or default hereunder.
4.12 Public Announcements.
--------------------
The Parties agree that, to the maximum extent feasible, but subject, in the
case of Parent, to its public disclosure and other legal and regulatory
obligations, they shall advise and confer prior to the issuance of any public
announcement or reports or statements with respect to the Merger.
23
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to Each Party's Obligations.
--------------------------------------
The obligations of each party to perform this Agreement and to effect the
Merger are subject to the satisfaction of the following conditions unless waived
(to the extent such conditions can be waived) by all parties hereto:
(a) Approvals. All authorizations, consents, orders or approvals of, or
---------
declarations or filings with or expiration of waiting periods imposed by, any
Governmental Authority necessary for the consummation of the transactions
contemplated hereby shall have been obtained or made or shall have occurred.
(b) Legal Action. No temporary restraining order, preliminary injunction
------------
or permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any Federal or state court or other Governmental
Authority and remain in effect.
(c) Legislation. No Federal, state, local or foreign statute, rule or
-----------
regulation shall have been enacted which prohibits, restricts or delays the
consummation of the transactions contemplated by this Agreement or any of the
conditions to the consummation of such transactions.
5.2 Conditions to Obligations of Parent and Acquisition Sub.
-------------------------------------------------------
The obligation of Parent and Acquisition Sub to perform this Agreement is
subject to the satisfaction of the following conditions unless waived (to the
extent such conditions can be waived) by Parent:
(a) Representations and Warranties. The representations and warranties of
------------------------------
Target set forth in Section 3.1 hereof shall in each case be true and correct in
all material respects (except for any representation or warranty that by its
terms is qualified by materiality, in which case it shall be true and correct in
all respects) as of the date of this Agreement, and as of the Closing Date as
though made at and as of such dates, respectively, and Parent shall have
received a certificate signed by an executive officer of Target to that effect.
(b) Performance of Obligations of Target. Target shall have performed
------------------------------------
in all material respects the obligations required to be performed by it under
this Agreement prior to or as of the Closing Date, and Parent and Acquisition
Sub shall have received a certificate signed by an executive officer of Target
to that effect .
(c) Consents and Approvals. Parent shall have received duly executed
----------------------
copies of all consents and approvals contemplated by this Agreement or Target
Disclosure Schedule, in form and substance satisfactory to Parent.
(d) Government Consents, Authorizations, Etc. All consents,
----------------------------------------
authorizations, orders or approvals of, and filings or registrations with, any
Governmental Authority which are
24
required for or in connection with the execution and delivery by Target of this
Agreement and the Related Agreements and the consummation by Target of the
transactions contemplated hereby and thereby shall have been obtained or made.
(e) Related Agreements. Each of the Related Agreements shall be in full
------------------
force and effect and become effective in accordance with the respective terms
thereof as of the Effective Time.
(f) Absence of Material Adverse Change. There shall not have been any
----------------------------------
Material Adverse Change as to Target.
(g) Financing. Parent shall have received sufficient debt financing on
---------
terms satisfactory to it in order to refinance all of Target's outstanding
Indebtedness.
(h) Resignations. Parent shall have received copies of resignations from
------------
such officers and directors of Target and each Target Subsidiary as are
requested by Parent prior to the Closing Date.
5.3 Conditions to Obligations of Target.
-----------------------------------
The obligation of Target to perform this Agreement are subject to the
satisfaction of the following conditions unless waived (to the extent such
conditions can be waived) by Target:
(a) Representations and Warranties. The representations and warranties of
------------------------------
Parent set forth in Section 3.2 hereof shall be true and correct in all material
respects (except for any representation or warranty that by its terms is
qualified by materiality, in which case it shall be true and correct in all
respects) as of the date of this Agreement, and as of the Closing Date as though
made at and as of such dates, respectively, and Target shall have received a
certificate signed by an executive officer of Parent to that effect.
(b) Performance of Obligations of Parent. Parent shall have performed in
------------------------------------
all material respects the obligations required to be performed it by under this
Agreement prior to or as of the Closing Date and Target shall have received a
certificate signed by an executive officer of Parent to that effect.
(c) Government Consents, Authorizations, Etc. All consents,
----------------------------------------
authorizations, orders or approvals of, and filings or registrations with, any
Governmental Authority which are required for or in connection with the
execution and delivery by Parent of this Agreement and the Related Agreements
and the consummation by Parent of the transactions contemplated hereby or
thereby shall have been obtained or made.
(d) Absence of Material Adverse Change. There shall not have been any
----------------------------------
Material Adverse Change as to Parent.
(e) Registration Rights Agreement. Parent shall have executed and
-----------------------------
delivered a registration rights agreement with respect to the Merger Shares to
be received by affiliates of Newport Investment LLC that hold Target Common
Stock, in substantially the form of the
25
Registration Rights Agreement dated December 18, 1997 between Parent and Newport
Investment LLC.
ARTICLE VI
TERMINATION
6.1 Termination.
-----------
This Agreement may be terminated, and the Merger abandoned, notwithstanding
the approval by Parent (and, after its formation, the stockholder of Acquisition
Sub) and the stockholder of Target of this Agreement, at any time prior to the
Effective Time, by:
(a) the mutual consent of Parent and, after its formation, Acquisition
Sub, on the one hand, and Target on the other hand; or
(b) Parent, or Target, if the conditions set forth in Section 5.1 hereof
shall not have been met by July 1, 1999, except if such conditions have not been
met solely as a result of the action or inaction of the party seeking to
terminate; or
(c) Parent if the conditions set forth in Section 5.2 hereof shall not
have been met, and Target if the conditions set forth in Section 5.3 hereof
shall not have been met, in either case, by July 1, 1999, except if such
conditions have not been met solely as a result of the action or inaction of the
party seeking to terminate; or
(d) Parent on the one hand, or Target on the other hand, if such party or
parties shall have determined in its or their sole discretion, exercised in good
faith, that the Merger contemplated by this Agreement has become impracticable
by reason of the institution of any litigation, proceeding or investigation to
restrain or prohibit the consummation of the Merger, or which questions the
validity or legality of the transactions contemplated by this Agreement.
Any termination pursuant to this Section 6.1 (other than a termination pursuant
to Section 6.1(a) hereof) shall be effected by written notice from the party so
terminating to the other parties hereto.
6.2 Effect of Termination.
---------------------
In the event of the termination of this Agreement as provided in Section
6.1, this Agreement shall be of no further force or effect, except for Section
5.1(b), this Section 6.2 and Article VII, each of which shall survive the
termination of this Agreement; provided, however, that the liability of any
-------- -------
party for any breach by such party of the representations, warranties, covenants
or agreements of such party set forth in this Agreement occurring prior to the
termination of this Agreement shall survive the termination of this Agreement.
26
ARTICLE VII
MISCELLANEOUS
7.1 Expenses.
--------
Each party hereto shall bear its own fees and expenses in connection with
the transactions contemplated hereby.
7.2 Survival.
--------
The representations, warranties and covenants contained in this Agreement
shall not survive the Closing.
7.3 Entire Agreement.
----------------
This Agreement (including the Disclosure Schedules and the Exhibits
attached hereto) and the other writings referred to herein contain the entire
agreement among the parties hereto with respect to the transactions contemplated
hereby and supersede all prior agreements or understandings, written or oral,
among the parties with respect thereto.
7.4 Descriptive Headings.
--------------------
Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement.
7.5 Notices.
-------
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
nationally-recognized overnight courier or by registered or certified mail,
postage prepaid, return receipt requested or by telecopier, with confirmation as
provided above addressed as follows:
if to Parent:
Alliance Imaging, Inc.
0000 Xxxxx XxxxxxXxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx., Esq.
Telecopier: (000) 000-0000
with a copy to:
Apollo Management, L.P.
1301 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
27
Attention: Xxxx Xxxxxx
Telecopier: (000) 000-0000
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000; and
if to Target, to:
Three Rivers Holding Corp.
c/o SMT Health Services Inc.
00000 Xxxxx Xxxxxxx - Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
with a copy to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All such
notices or communications shall be deemed to be received (a) in the case of
personal delivery or telecopy, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next Business Day after the date
when sent and (c) in the case of mailing, on the third Business Day following
the date on which the piece of mail containing such communication was posted.
7.6 Counterparts.
------------
This Agreement may be executed in any number of counterparts by original or
facsimile signature, each such counterpart shall be an original instrument and
all such counterparts together shall constitute one and the same agreement.
7.7 Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the
Delaware Statute and with the laws of the State of Delaware applicable to
contracts made and to be performed wholly therein.
28
7.8 Benefits of Agreement.
---------------------
All the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall not be assignable by any party hereto
without the consent of the other parties hereto; provided, however, that
-------- -------
anything contained herein to the contrary notwithstanding , Acquisition Sub may
assign and delegate any or all of its rights and obligations hereunder to any
other direct or indirect wholly-owned Parent Subsidiary.
7.9 Pronouns.
--------
As used herein, all pronouns shall include the masculine, feminine, neuter,
singular and plural thereof whenever the context and facts require such
construction.
7.10 Amendment, Modification and Waiver.
----------------------------------
This Agreement shall not be altered or otherwise amended except pursuant to
an instrument in writing signed by Parent and, after its formation, Acquisition
Sub, and Target; provided, however, that this Agreement shall not be altered or
-------- -------
otherwise amended without the approval of the stockholders of Acquisition Sub
(after its formation) and Target if under applicable law such alteration or
amendment may not be made without such approval. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach.
7.11 Covenants and Representations and Warranties.
--------------------------------------------
All covenants hereunder shall be given independent effect so that if a
certain action or condition constitutes a default under a certain covenant, the
fact that such action or condition is permitted by another covenant shall not
affect the occurrence of such default, unless expressly permitted under an
exception to such initial covenant. In addition, all representations and
warranties hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached shall not affect the incorrectness of or a breach
of a representation and warranty hereunder. The representations and warranties
contained in this Agreement or in any certificate or other writing delivered in
connection with this Agreement shall not survive the Closing.
* * * * *
29
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement and Plan of Merger to be executed on its behalf as of the day and year
first above written.
ALLIANCE IMAGING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and Chief
Executive Officer
THREE RIVERS HOLDING CORP.
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Assistant Secretary and
Assistant Treasurer
