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