Exhibit 1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
▇▇▇▇▇▇▇ INC.,
MEDTRANS ACQUISITION CO.
and
AMERICAN MEDICAL RESPONSE, INC.
Dated as of January 6, 1997
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TABLE OF CONTENTS
ARTICLE I
THE OFFER
SECTION 1.1 The Offer ................................................2
SECTION 1.2 Company Action. ..........................................3
SECTION 1.3 Boards of Directors and Committees; Section 14(f) ........4
ARTICLE II
THE MERGER
SECTION 2.1 The Merger ...............................................5
SECTION 2.2 Effective Time. ..........................................6
SECTION 2.3 Effect of the Merger. ....................................6
SECTION 2.4 Certificate of Incorporation, By-Laws. ...................6
SECTION 2.5 Directors and Officers. ..................................7
SECTION 2.6 Effect on Capital Stock. .................................7
SECTION 2.7 Exchange of Certificates. ................................8
SECTION 2.8 Stock Transfer Books. ....................................9
SECTION 2.9 No Further Ownership Rights in Company Common Stock. .....9
SECTION 2.10 Lost, Stolen or Destroyed Certificates. ................10
SECTION 2.11 Taking of Necessary Action; Further Action. ............10
SECTION 2.12 Stockholders' Meeting ..................................10
SECTION 2.13 Material Adverse Effect. ...............................11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.1 Organization and Qualification; Subsidiaries. ...........11
SECTION 3.2 Certificate of Incorporation and By-Laws. ...............12
SECTION 3.3 Capitalization. .........................................12
SECTION 3.4 Authority Relative to this Agreement. ...................13
SECTION 3.5 No Conflict; Required Filings and Consents. .............13
SECTION 3.6 Compliance, Permits. ....................................14
SECTION 3.7 SEC Filings; Financial Statements. ......................15
SECTION 3.8 Absence of Certain Changes or Events. ...................15
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SECTION 3.9 No Undisclosed Liabilities. .............................16
SECTION 3.10 Absence of Litigation. .................................16
SECTION 3.11 Employee Benefit Plans, Employment Agreements. .........16
SECTION 3.12 Labor Matters. .........................................18
SECTION 3.13 Schedule 14D-9; Offer Documents; Proxy Statement. ......18
SECTION 3.14 Restrictions on Business Activities. ...................19
SECTION 3.15 Title to Property. .....................................19
SECTION 3.16 Taxes. .................................................19
SECTION 3.17 Environmental Matters. .................................20
SECTION 3.18 Intellectual Property. .................................21
SECTION 3.19 Interested Party Transactions. .........................22
SECTION 3.20 Insurance. .........................................22
SECTION 3.21 Healthcare Regulatory Compliance. ......................22
SECTION 3.22 Opinion of Financial Advisor. ..........................23
SECTION 3.23 Brokers. ...............................................23
SECTION 3.24 Section 203 of the Delaware Law Not Applicable .........23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION
SECTION 4.1 Organization and Qualification; Subsidiaries ............24
SECTION 4.2 Authority Relative to this Agreement. ...................24
SECTION 4.3 No Conflict, Required Filings and Consents. .............24
SECTION 4.4 Offer Documents; Schedule 14D-9; Proxy Statement. .......25
SECTION 4.5 No Prior Activities; Financing. .........................25
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1 Conduct of Business by the Company Pending the Merger. ..26
SECTION 5.2 No Solicitation. ........................................29
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 HSR Act .................................................30
SECTION 6.2 Access to Information; Confidentiality. .................30
SECTION 6.3 Consents; Approvals. ....................................30
SECTION 6.4 Indemnification and Insurance. ..........................31
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SECTION 6.5 Notification of Certain Matters. ........................32
SECTION 6.6 Further Action ..........................................33
SECTION 6.7 Public Announcements. ...................................33
SECTION 6.8 Conveyance Taxes. .......................................33
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.1 Conditions to Obligation of Each Party to Effect
the Merger ...........................................................33
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination .............................................34
SECTION 8.2 Effect of Termination ...................................35
SECTION 8.3 Fees and Expenses .......................................35
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Effectiveness of Representations, Warranties and
Agreements; Knowledge, Etc............................................36
SECTION 9.2 Notices .................................................37
SECTION 9.3 Certain Definitions .....................................37
SECTION 9.4 Amendment ...............................................38
SECTION 9.5 Waiver ..................................................39
SECTION 9.6 Headings ................................................39
SECTION 9.7 Severability.............................................39
SECTION 9.8 Entire Agreement.........................................39
SECTION 9.9 Assignment; Guarantee of Acquisition ....................39
SECTION 9.10 Parties in Interest ....................................39
SECTION 9.11 Failure or Indulgence Not Waiver; Remedies Cumulative ..39
SECTION 9.12 Governing Law ..........................................40
SECTION 9.13 Counterparts ...........................................40
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of January 6, 1997, is among
American Medical Response, Inc., a Delaware corporation (the "Company"), ▇▇▇▇▇▇▇
Inc., a Canadian corporation ("Parent") and MedTrans Acquisition Co., a Delaware
corporation and a wholly owned subsidiary of Parent ("Acquisition").
WHEREAS, the Board of Directors of Parent, Acquisition and the Company have
each approved the acquisition of the Company by Parent upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance thereof, it is proposed that Acquisition shall make
a tender offer to acquire all outstanding shares (the "Shares") of common stock,
par value $0.01 per share, of the Company (the "Common Stock") for a cash amount
of $40.00 per Share (such amount, or any greater amount per Share paid pursuant
to the tender offer, being hereinafter referred to as the "Per Share Amount") in
accordance with the terms and subject to the conditions provided for herein (the
"Offer");
WHEREAS, the Board of Directors of the Company (the "Board") has (i)
determined that the consideration to be paid for each Share in the Offer and the
Merger (as defined below) is fair to and in the best interests of the
stockholders of the Company and (ii) approved this Agreement and the
transactions contemplated hereby and resolved to recommend acceptance of the
Offer and approval and adoption of this Agreement by the stockholders of the
Company; and
WHEREAS, the Boards of Directors of Parent and Acquisition have each
approved the merger (the "Merger") of Acquisition with and into the Company
following the Offer in accordance with the Delaware General Corporation Law (the
"Delaware Law") upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Company, Parent and Acquisition hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer.
(a) Commencement. Provided that this Agreement shall not have been
terminated in accordance with Section 8.1, as promptly as practicable, but in
any event within five business days of the public announcement of the terms of
this Agreement, Acquisition shall commence the Offer. The obligation of
Acquisition to accept for payment and pay for Shares tendered pursuant to the
Offer shall be subject to the condition that a number of Shares representing not
less than two-thirds of the Company's outstanding voting power (assuming the
exercise of all outstanding options to purchase shares of Common Stock the
holders of which have not entered into an agreement to cancel such options as
described in Section 2.6(c)(i) and the conversion of all of the Company's 5 1/4%
Convertible Subordinated Notes due February 1, 2001 (the "Notes")) shall have
been validly tendered and not withdrawn prior to the expiration date of the
Offer (the "Minimum Condition"), and the obligation of Acquisition to accept for
payment and pay for Shares tendered pursuant to the Offer shall be subject to
the other conditions set forth in Annex A hereto. It is agreed that the Minimum
Condition and the other conditions set forth in Annex A hereto are for the sole
benefit of Acquisition and may be asserted by Acquisition regardless of the
circumstances giving rise to any such condition unless Parent, Acquisition or
their affiliates shall have caused the circumstances giving rise to such
condition. Acquisition expressly reserves the right in its sole discretion to
waive, in whole or in part, at any time or from time to time, any such condition
(other than the Minimum Condition, which may not be waived without the prior
written consent of the Company), to increase the price per Share payable in the
Offer or to make any other changes in the terms and conditions of the Offer;
provided that, unless previously approved by the Company in writing, no change
may be made that decreases the price per Share payable in the Offer, changes the
form of consideration payable in the Offer, reduces the maximum number of Shares
to be purchased in the Offer or imposes conditions to the Offer in addition to
those set forth in Annex A hereto. Acquisition covenants and agrees that,
subject to the conditions of the Offer set forth in Annex A hereto, Acquisition
shall accept for payment and pay for Shares which have been validly tendered and
not withdrawn pursuant to the Offer as soon as it is permitted to do so under
applicable law; provided that, if the number of Shares that have been validly
tendered and not withdrawn represent less than 90% of the Company's outstanding
voting power (calculated as described above), Acquisition may extend the Offer
up to the tenth business day following the date on which all conditions to the
Offer shall first have been satisfied or waived. The Per Share Amount payable
in the Offer shall be paid net to the seller in cash, upon the terms and subject
to the conditions of the Offer. Acquisition agrees that if all conditions set
forth in Annex A are not satisfied on the initial expiration date of the Offer,
Acquisition shall extend (and re-extend) the Offer through April 15, 1997 to
provide time to satisfy such conditions; provided that, if Acquisition shall not
have purchased Shares pursuant to the Offer prior to April 15, 1997 as the
result of the receipt by the Company of an
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Acquisition Proposal (as defined below) or as a result of a failure of the
applicable waiting period under the HSR Act (as defined below) to expire or the
failure to obtain any necessary governmental or regulatory approvals,
Acquisition shall extend (and re-extend) the Offer through July 15, 1997.
(b) Filing Offer Documents. As soon as practicable on the date of
commencement of the Offer, Parent and Acquisition shall file with the Securities
and Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1
with respect to the Offer which will contain the offer to purchase and form of
the related letter of transmittal (together with any supplements or amendments
thereto, the "Offer Documents"). Parent, Acquisition and the Company each
agrees promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that any such information shall have become false
or misleading in any material respect and Parent and Acquisition each further
agrees to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws. The
Company and its counsel shall be given a reasonable opportunity to review and
comment on the Offer Documents prior to their filing with the SEC and shall be
provided with any comments Parent, Acquisition and their counsel may receive
from the SEC or its staff with respect to the Offer Documents promptly after
receipt of such comments.
SECTION 1.2 Company Action.
(a) Board Approval. The Company hereby approves of and consents to the
Offer and represents and warrants that the Board, at a meeting duly called and
held on January 5, 1997, unanimously (i) determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are fair
to and in the best interests of the stockholders of the Company, (ii) approved
this Agreement and the transactions contemplated hereby, including the Offer and
the Merger and (iii) resolved to recommend that the stockholders of the Company
accept the Offer, tender their Shares thereunder to Acquisition and, if required
by applicable law, approve and adopt this Agreement and the Merger. The Company
further represents and warrants that ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ("▇▇▇▇▇ ▇▇▇▇▇▇") has
delivered to the Board its opinion to the effect that, as of the date of this
Agreement, the Per Share Amount to be received by the holders of Shares (other
than Parent and its affiliates) pursuant to the Offer and the Merger, taken
together, is fair to such holders from a financial point of view. The Company
has been authorized by ▇▇▇▇▇ ▇▇▇▇▇▇ to permit the inclusion of such opinion in
its entirety in the Offer Documents and the Schedule 14D-9 referred to below and
the Proxy Statement referred to in Section 3.13, so long as such inclusion is in
form and substance reasonably satisfactory to ▇▇▇▇▇ ▇▇▇▇▇▇ and its counsel.
Subject to the fiduciary duties of the Board under applicable law (as determined
in good faith after consultation with independent counsel), the Company hereby
consents to the inclusion in the Offer Documents of the recommendations of the
Board described in this Section 1.2(a).
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(b) Schedule 14D-9. As soon as practicable on the date of commencement of
the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with any amendments or supplements
thereto, the "Schedule 14D-9") and shall mail the Schedule 14D-9 to the
stockholders of the Company promptly after the commencement of the Offer. The
Schedule 14D-9 shall, subject to the fiduciary duties of the Board under
applicable law (as determined in good faith after consultation with independent
counsel), at all times contain the determinations, approvals and recommendations
described in Section 1.2(a). Parent, Acquisition and the Company each agrees
promptly to correct any information provided by it for use in the Schedule 14D-9
if and to the extent that any such information shall have become false or
misleading in any material respect and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Parent, Acquisition and
their counsel shall be given a reasonable opportunity to review and comment on
the Schedule 14D-9 prior to its filing with the SEC and shall be provided with
any comments the Company and its counsel may receive from the SEC or its staff
with respect to the Schedule 14D-9 promptly after receipt of such comments.
(c) Dissemination of the Offer. In connection with the Offer, the Company
will promptly furnish Acquisition with mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date and shall
furnish Acquisition with such additional information and assistance (including,
without limitation, updated lists of stockholders, mailing labels and lists of
securities positions) as Acquisition or its agents may reasonably request in
communicating the Offer to the record and beneficial holders of Shares. Subject
to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Acquisition and its affiliates and associates shall
hold in confidence the information contained in any such labels, listings and
files, will use such information only in connection with the Offer and the
Merger, and, if this Agreement shall be terminated, will deliver to the Company
all copies of such information then in their possession.
SECTION 1.3 Boards of Directors and Committees; Section 14(f).
(a) Board Representation. Promptly upon the purchase by Acquisition of
Shares pursuant to the Offer and from time to time thereafter, Acquisition shall
be entitled to designate up to such number of directors, rounded up to the next
whole number, on the Board that equals the product of (i) the total number of
directors on the Board (giving effect to the election of any additional
directors pursuant to this Section) and (ii) the percentage that the number of
Shares owned by Acquisition and its affiliates (including any Shares purchased
pursuant to the Offer) bears to the total number of outstanding Shares, and the
Company shall, upon request by Acquisition, subject to the provisions of Section
1.3(b), promptly either
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increase the size of the Board (and shall, if necessary, amend the Company's By-
Laws to permit such an increase) or use its reasonable best efforts to secure
the resignation of such number of directors as is necessary to enable
Acquisition's designees to be elected to the Board and shall cause Acquisition's
designees to be so elected. Promptly upon request by Acquisition, the Company
will, subject to the provisions of Section 1.3(b), use its reasonable best
efforts to cause persons designated by Acquisition to constitute the same
percentage as the number of Acquisition's designees to the Board bears to the
total number of directors on the Board on (i) each committee of the Board, (ii)
each board of directors or similar governing body or bodies of each subsidiary
of the Company designated by Acquisition and (iii) each committee of each such
board or body.
(b) Compliance with Section 14(f). The Company's obligations to appoint
designees to the Board shall be subject to Section 14(f) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
promulgated thereunder. The Company shall promptly take all actions required
pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its obligations
under this Section 1.3 and shall include in the Schedule 14D-9 or a separate
Rule 14f-1 Statement provided to shareholders such information with respect to
the Company and its officers and directors as is required under Section 14(f)
and Rule 14f-1. Parent or Acquisition will supply to the Company in writing and
be solely responsible for any information with respect to either of them and
their nominees, officers, directors and affiliates required by Section 14(f) and
Rule 14f-1.
(c) Action by Disinterested Directors. Following the election or
appointment of Acquisition's designees pursuant to this Section 1.3 and prior to
the Effective Time (as defined below), any amendment of this Agreement or any
amendment to the Restated Certificate of Incorporation or By-Laws of the Company
inconsistent with this Agreement, any termination of this Agreement by the
Company, any extension by the Company of the time for the performance of any of
the obligations or other acts of Parent or Acquisition or any waiver of any of
the Company's rights hereunder will require the concurrence of a majority of the
directors of the Company then in office who are not designees of Acquisition or
employees of the Company.
ARTICLE II
THE MERGER
SECTION 2.1 The Merger.
(a) Effective Time. At the Effective Time (as defined below), and subject
to and upon the terms and conditions of this Agreement and the Delaware Law,
Acquisition shall be merged with and into the Company, the separate corporate
existence of Acquisition shall cease, and the Company shall continue as the
surviving corporation. The Company as the
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surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."
(b) Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
8.1 and subject to the satisfaction or waiver of the conditions set forth in
Article VII, the consummation of the Merger will take place as promptly as
practicable (and in any event within two business days) after satisfaction or
waiver of the conditions set forth in Article VII, at the offices of Ropes &
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, unless another date, time
or place is agreed to in writing by the parties hereto.
SECTION 2.2 Effective Time. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VII, the parties
hereto shall cause the Merger to be consummated by filing a certificate of
merger as contemplated by the Delaware Law (the "Certificate of Merger"),
together with any required related certificates, with the Secretary of State of
the State of Delaware, in such form as required by, and executed in accordance
with the relevant provisions of, the Delaware Law (the time of such filing being
the "Effective Time").
SECTION 2.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement, the Certificate of Merger and
the applicable provisions of the Delaware Law. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of the Company and Acquisition shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Acquisition shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 2.4 Certificate of Incorporation, By-Laws.
(a) Certificate of Incorporation. Unless otherwise determined by
Parent prior to the Effective Time, at the Effective Time the Certificate of
Incorporation of Acquisition, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter amended as provided by the Delaware Law and such Certificate
of Incorporation; provided, however, that at the Effective Time Article I of
the Certificate of Incorporation of Acquisition shall be amended to change
its name to "American Medical Response, Inc."
(b) By-Laws. The By-Laws of Acquisition, as in effect immediately prior
to the Effective Time, shall be the By-Laws of the Surviving Corporation until
thereafter amended as provided by the Delaware Law, the Certificate of
Incorporation of the Surviving Corporation and such By-Laws.
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SECTION 2.5 Directors and Officers. The directors of Acquisition
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and the officers of
Acquisition immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
SECTION 2.6 Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the Parent, Acquisition, the
Company or the holders of any of the following securities:
(a) Conversion of Securities. Each Share issued and outstanding
immediately prior to the Effective Time (excluding any Shares to be canceled
pursuant to Section 2.6(b)) shall be converted into the right to receive the Per
Share Amount (the "Merger Consideration").
(b) Cancellation. Each Share held in the treasury of the Company and each
Share owned by Parent, Acquisition or any direct or indirect wholly owned
subsidiary of the Company or Parent immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of the holder
thereof, cease to be outstanding, be canceled and retired without payment of any
consideration therefor and cease to exist.
(c) Stock Options and Employee Stock Purchase Plan.
(i) On the date Acquisition purchases Shares pursuant to the
Offer, each outstanding option to purchase Company Common Stock (a "Stock
Option") granted under the Company's 1992 Equity Incentive Plan, the 1992 Stock
Option Plan for Non-Employee Directors and the Acquisition Stock Option Plan and
the 1996 Stock Incentive Plan of STAT Healthcare, Inc. (the "Company Stock
Option Plans") or pursuant to any other employee stock option plan or agreement
entered into by the Company with any employee of the Company or any subsidiary
thereof listed on Section 3.11(c) of the Company Disclosure Schedule, whether or
not then exercisable, shall become exercisable, and each holder of a Stock
Option who executes an agreement to cancel such Stock Option shall be entitled
to receive as soon as practicable thereafter from the Company in consideration
for such cancellation an amount in cash (less applicable withholding taxes)
equal to the product of (i) the number of shares of Company Common Stock
previously subject to such Stock Option multiplied by (ii) the excess, if any,
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of the Per Share Amount over the exercise price per share of Company Common
Stock previously subject to such Stock Option.
(ii) The Board of Directors of the Company, or an appropriate
committee thereof, shall promptly cause written notice of this Agreement to be
given to persons holding options or other rights to purchase Company Common
Stock ("Purchase Rights") under the Company's 1992 Employee Stock Purchase Plan
(the "Company
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Stock Purchase Plan"). On the date that Acquisition purchases Shares pursuant
to the Offer, all Purchase Rights shall be accelerated and shall be exercised
automatically for shares of Company Common Stock as if the date of this
Agreement were the end of an Option Period (as defined in the Company Stock
Purchase Plan) unless a Participant (as defined in the Company Stock Purchase
Plan) withdraws from the Company Stock Purchase Plan. Payroll deductions under
the Company Stock Purchase Plan not used to purchase shares of Company Common
Stock shall be returned to the Participant.
(d) Capital Stock of Acquisition. Each share of common stock, $.01 par
value, of Acquisition issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of common stock, $.01 par value, of the Surviving
Corporation.
SECTION 2.7 Exchange of Certificates.
(a) Exchange Agent and Procedures. Prior to the Effective Time, a bank or
trust company shall be designated by Parent (the "Paying Agent") to act as agent
in connection with the Merger to receive the funds to which holders of Shares
shall become entitled pursuant to Section 2.6(a). Promptly after the Effective
Time, the Surviving Corporation shall cause to be mailed to each record holder,
as of the Effective Time, of a certificate or certificates (the"Certificates")
that, prior to the Effective Time, represented Shares, a form of letter of
transmittal and instructions for use in effecting the surrender of the
Certificates for payment of the Merger Consideration therefor. Upon the
surrender of each such Certificate formerly representing Shares, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, the Paying Agent shall pay the holder of such
Certificate the Merger Consideration multiplied by the number of Shares formerly
represented by such Certificate, in exchange therefor, and such Certificate
shall forthwith be canceled. Until so surrendered and exchanged, each such
Certificate (other than Shares held by Parent, Acquisition or the Company, or
any direct or indirect subsidiary thereof) shall represent solely the right to
receive the Merger Consideration. No interest shall be paid or accrue on the
Merger Consideration. If the Merger Consideration (or any portion thereof) is
to be delivered to any person other than the person in whose name the
Certificate formerly representing Shares surrendered in exchange therefor is
registered, it shall be a condition to such exchange that the Certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person requesting such exchange shall pay to the Paying
Agent any transfer or other taxes required by reason of the payment of the
Merger Consideration to a person other than the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of the Paying
Agent that such tax has been paid or is not applicable.
(b) Consideration. When and as needed, Parent or Acquisition shall
deposit, or cause to be deposited, in trust with the Paying Agent the Merger
Consideration to which holders of Shares shall be entitled at the Effective Time
pursuant to Section 2.6(a) hereof.
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(c) Investment of Merger Consideration. The Merger Consideration shall be
invested by the Paying Agent, as directed by Parent, provided such investments
shall be limited to direct obligations of the United States of America,
obligations for which the full faith and credit of the United States of America
is pledged to provide for the payment of principal and interest, commercial
paper rated of the highest quality by ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Corporation, or certificates of deposit issued by a commercial
bank having at least $1,000,000,000 in assets.
(d) Termination of Duties. Promptly following the date which is six
months after the Effective Time, Parent will cause the Paying Agent to deliver
to the Surviving Corporation all cash and documents in its possession relating
to the transactions described in this Agreement, and the Paying Agent's duties
shall terminate. Thereafter, each holder of a Certificate formerly representing
a Share may surrender such Certificate to the Surviving Corporation and (subject
to applicable abandoned property, escheat and similar laws) receive in exchange
therefor the Merger Consideration, without any interest thereon.
(e) No Liability. Neither Parent, Acquisition nor the Company shall be
liable to any holder of Company Common Stock for any Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(f) Withholding Rights. Parent or the Exchange Agent shall be entitled
to deduct and withhold from the Merger Consideration otherwise payable pursuant
to this Agreement to any holder of Company Common Stock such amounts as Parent
or the Exchange Agent is required to deduct and withhold with respect to the
making of such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Parent or the Exchange Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which such deduction and withholding was made
by Parent or the Exchange Agent.
SECTION 2.8 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
registration of transfers of the Company Common Stock thereafter on the records
of the Company.
SECTION 2.9 No Further Ownership Rights in Company Common Stock. The
Merger Consideration delivered upon the surrender for exchange of Shares in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Shares, and there shall be no
further registration of transfers on the records of the Surviving Corporation of
Shares which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Article II.
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SECTION 2.10 Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
deliver in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the Merger
Consideration such Parent Shares as may be required pursuant to Section 2.6;
provided, however, that Parent may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Parent or the Exchange
Agent with respect to the Certificates alleged to have been lost, stolen or
destroyed.
SECTION 2.11 Taking of Necessary Action; Further Action. Each of Parent,
Acquisition and the Company will take all such reasonable and lawful action as
may be necessary or appropriate in order to effectuate the Merger in accordance
with this Agreement as promptly as possible. If, at any time after the
Effective Time, any such further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Acquisition, the officers and directors of the
Company and Acquisition immediately prior to the Effective Time are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary action.
SECTION 2.12 Stockholders' Meeting. If approval by the Company's
stockholders is required by applicable law to consummate the Merger, the
Company, acting through the Board, shall in accordance with applicable law and
subject to the fiduciary duties of the Board under applicable law (as determined
in good faith after consultation with independent counsel), as soon as
practicable following the consummation of the Offer:
(i) duly call, give notice of, convene and hold an annual or special
meeting of its stockholders (the "Stockholders' Meeting") for the purpose
of considering and taking action upon this Agreement;
(ii) include in the Proxy Statement (as defined in Section 3.13) the
recommendation of the Board that stockholders of the Company vote in favor
of the approval and adoption of this Agreement and the transactions
contemplated hereby; and
(iii) use its reasonable best efforts (A) to obtain and furnish the
information required to be included by it in the Proxy Statement and, after
consultation with Parent, respond promptly to any comments made by the SEC
with respect to the Proxy Statement and any preliminary version thereof and
cause the Proxy Statement to be mailed to its stockholders at the earliest
practicable time following the consummation of the Offer and (B) to obtain
the necessary
10
approvals by its stockholders of this Agreement and the transactions
contemplated hereby.
At such meeting, Parent and Acquisition will vote all Shares owned by them in
favor of this Agreement and the transactions contemplated hereby.
SECTION 2.13 Material Adverse Effect. When used in connection with the
Company or any of its subsidiaries, or Parent or any of its subsidiaries, as the
case may be, the term "Material Adverse Effect" means any change, effect or
circumstance that is materially adverse to the business, assets, financial
condition or results of operations of the Company and its subsidiaries, or
Parent and its subsidiaries, as the case may be, in each case taken as a whole,
other than any such changes, effects or circumstances: (i) set forth or
contemplated by the Company Disclosure Schedule or the Parent Disclosure
Schedule, as the case may be; (ii) set forth or described in the Company SEC
Reports or the Parent SEC Reports, as the case may be; or (iii) affecting the
ambulance service industry generally.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Acquisition that,
except as set forth in the written disclosure schedule delivered on or prior to
the date hereof by the Company to Parent that is arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
III (the "Company Disclosure Schedule"):
SECTION 3.1 Organization and Qualification; Subsidiaries. Each of the
Company and each of its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority and is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders ("Approvals") necessary
to own, lease and operate the properties it purports to own, operate or lease
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing and in good standing or to have such power,
authority and Approvals would not have a Material Adverse Effect. Each of the
Company and each of its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing that would not
have a Material Adverse Effect. A true and complete list of all of the
Company's subsidiaries, together with the jurisdiction of incorporation of each
subsidiary and the percentage of each subsidiary's outstanding capital stock
owned by the Company or another subsidiary, is set forth in Section 3.1 of the
Company Disclosure Schedule. Except as set forth in Section 3.1 of the Company
Disclosure Schedule,
11
the Company does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership, joint venture or
other business association or entity, with respect to which interest the Company
or any of its subsidiaries has invested or is required to invest $500,000 or
more, excluding securities in any publicly traded company held for investment
and comprising less than five percent of the outstanding stock of such company.
SECTION 3.2 Certificate of Incorporation and By-Laws. The Company has
heretofore furnished to Parent a complete and correct copy of its Certificate of
Incorporation and By-Laws as most recently restated and subsequently amended to
date, and has furnished or made available to Parent the Certificate of
Incorporation and By-Laws (or equivalent organizational documents) of each of
its subsidiaries (the "Subsidiary Documents"). Such Certificate of
Incorporation, By-Laws and Subsidiary Documents are in full force and effect.
Neither the Company nor any of its subsidiaries is in violation of any of the
provisions of its Certificate of Incorporation or By-Laws or Subsidiary
Documents, except for immaterial violations of the Subsidiary Documents which
may exist.
SECTION 3.3 Capitalization. The authorized capital stock of the Company
consists of (i) 75,000,000 shares of Company Common Stock and (ii) 500,000
shares of preferred stock, $.01 par value per share, none of which is issued and
outstanding and none of which is held in treasury. As of December 31, 1996, (i)
21,047,345 shares of Company Common Stock were issued and outstanding, all of
which are validly issued, fully paid and nonassessable, and no shares were held
in treasury, (ii) no shares of Company Common Stock were held by subsidiaries of
the Company, (iii) 1,809,569 shares of Company Common Stock were reserved for
future issuance pursuant to outstanding stock options granted under the Company
Stock Option Plans and agreements listed in Section 3.3 of the Company
Disclosure Schedule, (iv) 189,611 shares of Company Common Stock were reserved
for future issuance under the Company Stock Purchase Plan,(v) 3,311,258 shares
of Company Common Stock were reserved for future issuance pursuant to the
conversion of the Notes and (vi) 3,919,900 shares of Company Common Stock were
issuable connection with the acquisition of STAT Healthcare. No material change
in such capitalization has occurred between December 31, 1996 and the date
hereof. Section 3.3 of the Company Disclosure Schedule sets forth a true and
complete list of all outstanding warrants and other rights for the purchase of
Company Common Stock (other than the Notes, Stock Options and Purchase Rights),
the name of each holder thereof, the number of shares purchasable thereunder or
upon conversion thereof and the per share exercise or conversion price of each
warrant and other right. Except as set forth in this Section 3.3 or Section
3.11 or in the related sections of the Company Disclosure Schedule, and other
than the Notes, there are no options, warrants or other similar rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of the Company or any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue or sell any shares of
capital stock of, or other equity interests in, the Company or any of its
subsidiaries. All shares of Company Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments
12
pursuant to which they are issuable, shall be duly authorized, validly issued,
fully paid and nonassessable. Except as disclosed in Section 3.3 of the Company
Disclosure Schedule, there are no obligations, contingent or otherwise, of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of Company Common Stock or the capital stock of any subsidiary or to
provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any such subsidiary or any other entity other than
guarantees of bank obligations of subsidiaries entered into in the ordinary
course of business. Except as set forth in Sections 3.1 and 3.3 of the Company
Disclosure Schedule, all of the outstanding shares of capital stock of each of
the Company's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and all such shares are owned by the Company or another
subsidiary of the Company free and clear of all security interests, liens,
claims, pledges, agreements, limitations in the Company's voting rights, charges
or other encumbrances of any nature whatsoever.
SECTION 3.4 Authority Relative to this Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action,
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than the adoption of this Agreement by the holders of at least a majority
of the outstanding shares of Company Common Stock entitled to vote in accordance
with the Delaware Law and the Company's Certificate of Incorporation and By-
Laws). The Board of Directors of the Company has determined that the Offer and
the Merger upon the terms and subject to the conditions of this Agreement are
advisable and in the best interest of the Company's stockholders. This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by Parent and
Acquisition, as applicable, constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms.
SECTION 3.5 No Conflict; Required Filings and Consents.
(a) Section 3.5(a) of the Company Disclosure Schedule includes a list of
all agreements to which the Company or any of its subsidiaries is a party or by
which any of them is bound which, as of the date hereof: (i) are required to be
filed as "material contracts" with the SEC pursuant to the requirements of the
Exchange Act; (ii) under which the consequences of a default, nonrenewal or
termination could have a Material Adverse Effect on the Company; or (iii)
pursuant to which payments might be required or acceleration of benefits may be
required upon a "change of control" of the Company (collectively, the "Material
Contracts").
(b) Except as set forth in Section 3.5(b) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of
13
this Agreement by the Company will not, (i) conflict with or violate the
Certificate of Incorporation or By-Laws of the Company, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or any of its subsidiaries or by which its or any of their respective
properties is bound or affected, or (iii) result in any breach of or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or impair the Company's or any of its subsidiaries' rights or
alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of any Material
Contract, or result in the creation of a lien or encumbrance on any of the
properties or assets of the Company or any of its subsidiaries pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
its or any of their respective properties is bound or affected, except in any
such case for any such conflicts, violations, breaches, defaults or other
occurrences that would not have a Material Adverse Effect.
(c) Except as set forth in Section 3.5(c) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except (i)
for applicable requirements, if any, of the Securities Act, the Exchange Act,
state securities laws ("Blue Sky Laws"), the pre-merger notification
requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended ("HSR Act"), and the filing and recordation of appropriate merger or
other documents as required by the Delaware Law, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay consummation of the Merger,
or otherwise prevent or delay the Company from performing its obligations under
this Agreement, or would not otherwise have a Material Adverse Effect.
SECTION 3.6 Compliance, Permits.
(a) Except as disclosed in Section 3.6(a) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is in conflict with,
or in default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to the Company or any of its subsidiaries or by which its or
any of their respective properties is bound or affected or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or its or any of
their respective properties is bound or affected, except for any such conflicts,
defaults or violations which would not have a Material Adverse Effect.
(b) Except as disclosed in Section 3.6(b) of the Company Disclosure
Schedule, the Company and its subsidiaries hold all permits, licenses,
easements, variances, exemptions,
14
consents, certificates, orders and approvals from governmental authorities that
are material to the operation of the business of the Company and its
subsidiaries taken as a whole as it is now being conducted (collectively, the
"Company Permits"), except when the failure to have such Company Permits would
not have a Material Adverse Effect. The Company and its subsidiaries are in
compliance with the terms of the Company Permits, except where the failure to so
comply would not have a Material Adverse Effect.
SECTION 3.7 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and documents required to be
filed with the SEC and has made available to Parent (i) its Annual Reports on
Form 10-K for the fiscal years ended December 31, 1994 and 1995, respectively,
(ii) its Quarterly Reports on Form 10-Q for the periods ended March 31, 1996,
June 30, 1996 and September 30, 1996, (iii) all proxy statements relating to the
Company's meetings of stockholders (whether annual or special) held since
January 1, 1995, (iv) all other reports or registration statements (other than
Reports on Form 10-Q not referred to in clause (ii) above) filed by the Company
with the SEC since January 1, 1995, and (v) all amendments and supplements to
all such reports and registration statements filed by the Company with the SEC
since January 1, 1995 (collectively, the "Company SEC Reports"). Except as
disclosed in Section 3.7 of the Company Disclosure Schedule, the Company SEC
Reports (i) were prepared in all material respects in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Except for STAT Healthcare, Inc., none of the Company's
subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports was
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto), and each fairly presents in all material respects the
consolidated financial position of the Company and its subsidiaries as at the
respective dates thereof and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
SECTION 3.8 Absence of Certain Changes or Events. Except as set forth in
Section 3.8 of the Company Disclosure Schedule or the Company SEC Reports, since
January 1, 1996, the Company has conducted its business in the ordinary course
and there has not occurred: (i) any Material Adverse Effect; (ii) any amendments
or changes in the Certificate of Incorporation or By-laws of the Company; (iii)
any damage to, destruction or loss of any asset
15
of the Company (whether or not covered by insurance) that would have a Material
Adverse Effect; (iv) any material change by the Company in its accounting
methods, principles or practices; (v) any material revaluation by the Company of
any of its assets, including, without limitation, writing down the value of
inventory or writing off notes or accounts receivable other than in the ordinary
course of business; (vi) any other action or event that would have required the
consent of Parent pursuant to Section 5.1 had such action or event occurred
after the date of this Agreement; or (vii) any sale of a material amount of
property of the Company or any of its subsidiaries, except in the ordinary
course of business.
SECTION 3.9 No Undisclosed Liabilities. Except as is disclosed in
Section 3.9 of the Company Disclosure Schedule, neither the Company nor any of
its subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise), except liabilities (a) in the aggregate adequately provided for in
the Company's unaudited balance sheet (including any related notes thereto) as
of September 30, 1996 (the "1996 Company Balance Sheet"), (b) incurred in the
ordinary course of business and not required under generally accepted accounting
principles to be reflected on the 1996 Company Balance Sheet, (c) incurred since
September 30, 1996 in the ordinary course of business consistent with past
practice, (d) incurred in connection with this Agreement, (e) disclosed in the
Company SEC Reports or (f) which would not have a Material Adverse Effect.
SECTION 3.10 Absence of Litigation. Except as set forth in Section 3.10
of the Company Disclosure Schedule, there are no claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Company,
overtly threatened against the Company or any of its subsidiaries, or any
properties or rights of the Company or any of its subsidiaries, before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that would have a Material Adverse Effect.
SECTION 3.11 Employee Benefit Plans, Employment Agreements.
(a) Section 3.11 (a) of the Company Disclosure Schedule lists all employee
pension plans (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), all material employee welfare plans
(as defined in Section 3(1) of ERISA) and all other material bonus, stock
option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other similar fringe or employee benefit plans,
programs or arrangements, and any material current or former employment,
executive compensation, consulting or severance agreements, written or
otherwise, for the benefit of, or relating to, any employee of or consultant to
the Company, any trade or business (whether or not incorporated) which is a
member of a controlled group including the Company or which is under common
control with the Company (an "ERISA Affiliate") within the meaning of Section
414 of the Code, or any subsidiary of the Company, as well as each plan with
respect to which the Company or an ERISA Affiliate could incur liability under
Section 4069 (if such plan has been or were terminated) or Section 4212(c) of
ERISA (collectively the "Company Employee Plans"). There have been made
available to Parent copies of (i) each such written
16
Company Employee Plan (other than those referred to in Section 4(b)(4) of
ERISA), (ii) the most recent annual report on Form 5500 series, with
accompanying schedules and attachments, filed with respect to each Company
Employee Plan required to make such a filing, and (iii) the most recent
actuarial valuation for each Company Employee Plan subject to Title IV of ERISA.
For purposes of this Section 3.11(a), the term "material," used with respect to
any Company Employee Plan, shall mean that the Company or an ERISA Affiliate has
incurred or may incur obligations in an annual amount exceeding $500,000 with
respect to such Company Employee Plan.
(b) (i) Except as set forth in Section 3.11(b) of the Company Disclosure
Schedule, none of the Company Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person, and none of the Company
Employee Plans is a "multiemployer plan" as such term is defined in Section
3(37) of ERISA; (ii) there has been no "prohibited transaction," as such term is
defined in Section 406 of ERISA and Section 4975 of the Code, with respect to
any Company Employee Plan, which could result in any material liability of the
Company or any of its subsidiaries; (iii) all Company Employee Plans are in
compliance in all material respects with the requirements prescribed by any and
all statutes (including ERISA and the Code), orders, or governmental rules and
regulations currently in effect with respect thereto (including all applicable
requirements for notification to participants or the Department of Labor, the
Pension Benefit Guaranty Corporation (the "PBGC"), Internal Revenue Service (the
"IRS") or Secretary of the Treasury), and the Company and each of its
subsidiaries have performed all material obligations required to be performed by
them under, are not in any material respect in default under or violation of,
and have no knowledge of any default or violation by any other party to, any of
the Company Employee Plans; (iv) each Company Employee Plan intended to qualify
under Section 401(a) of the Code and each trust intended to qualify under
Section 501(a) of the Code is the subject of a favorable determination letter
from the IRS, and nothing has occurred which may reasonably be expected to
impair such determination; (v) all contributions required to be made to any
Company Employee Plan pursuant to Section 412 of the Code, or the terms of the
Company Employee Plan or any collective bargaining agreement, have been made on
or before their due dates; (vi) with respect to each Company Employee Plan, no
"reportable event" within the meaning of Section 4043 of ERISA (excluding any
such event for which the 30 day notice requirement has been waived under the
regulations to Section 4043 of ERISA) nor any event described in Section 4062,
4063 or 4041 of ERISA has occurred; and (vii) neither the Company nor any ERISA
Affiliate has incurred, nor reasonably expects to incur, any liability under
Title IV of ERISA (other than liability for premium payments to the PBGC arising
in the ordinary course).
(c) Section 3.11(c) of the Company Disclosure Schedule sets forth a true
and complete list of each current or former employee, officer or director of the
Company or any of its subsidiaries who holds (i) any option to purchase Company
Common Stock as of the date hereof, together with the number of shares of
Company Common Stock subject to such option, the option price of such option (to
the extent determined as of the date hereof), whether such option is intended to
qualify as an incentive stock option within the meaning of Section 422(b)
-17-
of the Code (an "ISO"), and the expiration date of such option; (ii) any other
right, directly or indirectly, to acquire Company Common Stock, together with
the number of shares of Company Common Stock subject to such right. Section
3.11(c) of the Company Disclosure Schedule also sets forth the total number of
such ISOs, such nonqualified options and such other rights.
(d) Section 3.11(d) of the Company Disclosure Schedule sets forth a true
and complete list of (i) all employment agreements with officers of the Company
or any of its subsidiaries; (ii) all agreements with consultants who are
individuals obligating the Company or any of its subsidiaries to make annual
cash payments in an amount exceeding $200,000; (iii) all employees of, or
consultants to, the Company or any of its subsidiaries who have executed a non-
competition agreement with the Company or any of its subsidiaries; (iv) all
severance agreements, programs and policies of the Company or any of its
subsidiaries with or relating to its employees, in each case with outstanding
commitments exceeding $300,000, excluding programs and policies required to be
maintained by law; and (v) all plans, programs, agreements and other
arrangements of the Company or any of its subsidiaries with or relating to its
employees which contain change in control provisions.
SECTION 3.12 Labor Matters. Except as set forth in Section 3.12 of the
Company Disclosure Schedule, (i) there are no controversies pending or, to the
knowledge of the Company or any of its subsidiaries, threatened, between the
Company or any of its subsidiaries and any of their respective employees, which
controversies have had or would have a Material Adverse Effect; (ii) neither the
Company nor any of its subsidiaries is a party to any material collective
bargaining agreement or other labor union contract applicable to persons
employed by the Company or its subsidiaries, nor does the Company or any of its
subsidiaries know of any activities or proceedings of any labor union to
organize any such employees; and (iii) neither the Company nor any of its
subsidiaries has any knowledge of any strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of the Company
or any of its subsidiaries which would have a Material Adverse Effect.
SECTION 3.13 Schedule 14D-9; Offer Documents; Proxy Statement. Neither
the Schedule 14D-9, nor any of the information provided by the Company and/or by
its auditors, legal counsel, financial advisors or other consultants or advisors
specifically for use in the Offer Documents shall, on the respective dates the
Schedule 14D-9, the Offer Documents or any supplements or amendments thereto are
filed with the SEC or on the date first published, sent or given to the
Company's stockholders, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The proxy or
information statement or similar materials distributed to the Company's
stockholders in connection with the Merger, including any amendments or
supplements thereto (the "Proxy Statement"), shall not, at the time filed with
the SEC, at the time mailed to the Company's stockholders, at the time of the
Stockholders' Meeting or at the
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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 are made,
not misleading. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information provided by Parent,
Acquisition and/or by their auditors, legal counsel, financial advisors or other
consultants or advisors specifically for use in the Schedule 14D-9 or the Proxy
Statement. The Schedule 14D-9 and the Proxy Statement will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
SECTION 3.14 Restrictions on Business Activities. Except for this
Agreement or as set forth in Section 3.14 of the Company Disclosure Schedule, to
the best of the Company's knowledge, there is no material agreement, judgment,
injunction, order or decree binding upon the Company or any of its subsidiaries
which has or could reasonably be expected to have the effect of prohibiting or
impairing any material business practice of the Company or any of its
subsidiaries, any acquisition of property by the Company or any of its
subsidiaries or the conduct of business by the Company or any of its
subsidiaries as currently conducted or as proposed to be conducted by the
Company, except for any prohibition or impairment as would not have a Material
Adverse Effect.
SECTION 3.15 Title to Property. Except as set forth in Section 3.15 of
the Company Disclosure Schedule, the Company and each of its subsidiaries have
good and defensible title to all of their properties and assets, free and clear
of all liens, charges and encumbrances, except liens for taxes not yet due and
payable and such liens or other imperfections of title, if any, as do not
materially detract from the value of or interfere with the present use of the
property affected thereby or which would not have a Material Adverse Effect;
and, to the best knowledge of the Company, all leases pursuant to which the
Company or any of its subsidiaries lease from others material amounts of real or
personal property are in good standing, valid and effective in accordance with
their respective terms, and there is not, to the knowledge of the Company, under
any of such leases, any existing material default or event of default (or event
which with notice or lapse of time, or both, would constitute a material
default), except where the lack of such good standing, validity and
effectiveness or the existence of such default or event of default would not
have a Material Adverse Effect.
SECTION 3.16 Taxes.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes,
fees, levies, duties, tariffs, imposts, and governmental impositions or charges
of any kind in the nature of (or similar to) taxes, payable to any federal,
state, local or foreign taxing authority, including (without limitation) (i)
income, franchise, profits, gross receipts, ad valorem, net worth, value added,
sales, use, service, real or personal property, special assessments, capital
stock, license, payroll, withholding, employment, social security, workers'
compensation, unemployment compensation, utility, severance, production, excise,
stamp, occupation,
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premiums, windfall profits, transfer and gains taxes, and (ii) interest,
penalties, additional taxes and additions to tax imposed with respect thereto;
and "Tax Returns" shall mean returns, reports, and information statements with
respect to Taxes required to be filed with the IRS or any other taxing
authority, domestic or foreign, including, without limitation, consolidated,
combined and unitary tax returns.
(b) Other than as disclosed in Section 3.16(b) of the Company Disclosure
Schedule, the Company and its subsidiaries (for such periods as each subsidiary
was owned, directly or indirectly, by the Company) have filed all United States
federal income Tax Returns and all other material Tax Returns required to be
filed by them, and the Company and its subsidiaries have paid and discharged all
Taxes due in connection with or with respect to the periods or transactions
covered by such Tax Returns and have paid all other Taxes as are due, except
such as are being contested in good faith by appropriate proceedings (to the
extent that any such proceedings are required) and except as may be determined
to be owed upon completion of any Tax Return not yet filed based upon an
extension of time to file, and there are no other Taxes that would be due if
asserted by a taxing authority, except with respect to which the Company is
maintaining reserves to the extent currently required except to the extent the
failure to do so would not have a Material Adverse Effect. Except as does not
involve or would not result in liability to the Company or any of its
subsidiaries that would have a Material Adverse Effect, (i) there are no tax
liens on any assets of the Company or any subsidiary thereof; and (ii) neither
the Company nor any of its subsidiaries has granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of,
any Tax. The accruals and reserves for Taxes (including deferred taxes)
reflected in the 1996 Company Balance Sheet are in all material respects
adequate to cover all Taxes required to be accrued through the date thereof
(including interest and penalties, if any, thereon and Taxes being contested) in
accordance with generally accepted accounting principles.
(c) Neither the Company nor any of its subsidiaries is, or has been, a
United States real property holding corporation (as defined in Section 897(c)(2)
of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code. To the best knowledge of the Company, neither the Company nor any
of its subsidiaries owns any property of a character, the indirect transfer of
which, pursuant to this Agreement, would give rise to any material documentary,
stamp or other transfer tax.
SECTION 3.17 Environmental Matters. Except as set forth in Section 3.17
of the Company Disclosure Schedule, and except in all cases as, in the
aggregate, have not had and would not have a Material Adverse Effect, the
Company and each of its subsidiaries to the best of the Company's knowledge (i)
have obtained all applicable permits, licenses and other authorizations which
are required to be obtained under all applicable federal, state or local laws or
any regulation, code, plan, order, decree, judgment, notice or demand letter
issued, entered, promulgated or approved thereunder relating to pollution or
protection of the environment, including laws relating to emissions, discharges,
releases or threatened releases
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of pollutants, contaminants, or hazardous or toxic materials or wastes into
ambient air, surface water, ground water, or land or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or wastes ("Environmental Laws") by the Company or its subsidiaries
(or their respective agents); (ii) are in compliance with all terms and
conditions of such required permits, licenses and authorizations, and also are
in compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
applicable Environmental Laws; (iii) as of the date hereof, are not aware of nor
have received notice of any past or present violations of Environmental Laws or
any event, condition, circumstance, activity, practice, incident, action or plan
which is reasonably likely to interfere with or prevent continued compliance
with or which would give rise to any common law or statutory liability, or
otherwise form the basis of any claim, action, suit or proceeding, against the
Company or any of its subsidiaries based on or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge or release into the environment, of any
pollutant, contaminant or hazardous or toxic material or waste; and (iv) have
taken all actions necessary under applicable Environmental Laws to register any
products or materials required to be registered by the Company or its
subsidiaries (or any of their respective agents) thereunder.
SECTION 3.18 Intellectual Property.
(a) Except as set forth in Section 3.18(a) of the Company Disclosure
Schedule, the Company and/or each of its subsidiaries owns, or is licensed or
otherwise possesses legally enforceable rights to use all patents, trademarks,
trade names, service marks, copyrights, and any applications therefor,
technology, know-how, computer software programs or applications, and tangible
or intangible proprietary information or material that are used in the business
of the Company and its subsidiaries as currently conducted, except as would not
have a Material Adverse Effect.
(b) Except as disclosed in Section 3.18(b) of the Company Disclosure
Schedule or as would not have a Material Adverse Effect, the Company is not, nor
will it be as a result of the execution and delivery of this Agreement or the
performance of its obligations hereunder, in violation of any licenses,
sublicenses and other agreements as to which the Company is a party and pursuant
to which the Company is authorized to use any third-party patents, trademarks,
service marks and copyrights ("Third-Party Intellectual Property Rights"). No
claims with respect to the patents, registered and material unregistered
trademarks and service marks, registered copyrights, trade names and any
applications therefor owned by the Company or any of its subsidiaries (the
"Company Intellectual Property Rights"), any trade secret material to the
Company, or Third Party Intellectual Property Rights to the extent arising out
of any use, reproduction or distribution of such Third Party Intellectual
Property Rights by or through the Company or any of its subsidiaries, are
currently pending or, to the knowledge of the Company, are overtly threatened by
any person. The Company does not know of any
-21-
valid grounds for any bona fide claims (i) to the effect that the manufacture,
sale, licensing or use of any product as now used, sold or licensed or proposed
for use, sale or license by Company or any of its subsidiaries, infringes on any
copyright, patent, trademark, service ▇▇▇▇ or trade secret; (ii) against the use
by the Company or any of its subsidiaries of any trademarks, trade names, trade
secrets, copyrights, patents, technology, know-how or computer software programs
and applications used in the business of the Company or any of its subsidiaries
as currently conducted or as proposed to be conducted; (iii) challenging the
ownership, validity or effectiveness of any of the Company Intellectual Property
Rights or other trade secret material to the Company; or (iv) challenging the
license or legally enforceable right to use of the Third Party Intellectual
Rights by the Company or any of its subsidiaries.
(c) To the Company's knowledge, all patents, registered trademarks,
service marks and copyrights held by the Company are valid and subsisting.
Except as set forth in Section 3.18(c) of the Company Disclosure Schedule, to
the Company's knowledge, there is no material unauthorized use, infringement or
misappropriation of any of the Company Intellectual Property by any third party,
including any employee or former employee of the Company or any of its
subsidiaries.
SECTION 3.19 Interested Party Transactions. Except as set forth in
Section 3.19 of the Company Disclosure Schedule or in the Company SEC Reports,
since the date of the Company's proxy statement dated April 9, 1996, no event
has occurred that would be required to be reported as a Certain Relationship or
Related Transaction, pursuant to Item 404 of Regulation S-K promulgated by the
SEC.
SECTION 3.20 Insurance. All material fire and casualty, general
liability, business interruption, product liability, professional liability and
sprinkler and water damage insurance policies maintained by the Company or any
of its subsidiaries are with reputable insurance carriers, provide full and
adequate coverage for all normal risks incident to the business of the Company
and its subsidiaries and their respective properties and assets and are in
character and amount at least equivalent to that carried by entities engaged in
similar businesses and subject to the same or similar perils or hazards, except
as would not have a Material Adverse Effect.
SECTION 3.21 Healthcare Regulatory Compliance. To the best knowledge of
the Company, the Company and its subsidiaries have not engaged knowingly and
willfully in any activities which are prohibited under federal Medicare and
Medicaid statutes, including, without limitation, 42 U.S.C. (S) 1320a-7b or
related state or local statutes or regulations or which otherwise constitutes
fraud, including, without limitation, the following: (i) knowingly and
willfully making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment; (ii) knowingly and
willfully making or causing to be made any false statement or representation of
a material fact for use in determining rights to any benefit or payment; (iii)
failing to disclose knowledge of the
-22-
occurrence of any event affecting the initial or continued right to any benefit
or payment on its behalf or on behalf of another, with intent to secure such
benefit or payment fraudulently; and (iv) knowingly and willfully soliciting or
receiving any remuneration (including any kickback, bribe, or rebate), directly
or indirectly, overtly or covertly, in cash or in kind or offering to pay such
remuneration (A) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare or Medicaid or (B) in return
for purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing or ordering any good, facility, service or item for which
payment may be made in whole or in part by Medicare or Medicaid.
SECTION 3.22 Opinion of Financial Advisor. The Board of Directors of the
Company has received the opinion of the Company's financial advisor, ▇▇▇▇▇
▇▇▇▇▇▇, to the effect that, as of the date of this Agreement, the Per Share
Amount to be received by the holders of Shares (other than Parent and its
affiliates) pursuant to the Offer and the Merger, taken together, is fair, from
a financial point of view, to such holders.
SECTION 3.23 Brokers. No broker, finder or investment banker (other than
▇▇▇▇▇ ▇▇▇▇▇▇) is entitled to any brokerage, finder's or other fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has heretofore
furnished to Parent a complete and correct copy of all agreements between the
Company and ▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to which such firm would be entitled to any
payment relating to the transactions contemplated hereunder.
SECTION 3.24 Section 203 of the Delaware Law Not Applicable. The Board of
Directors of the Company has taken all actions so that the restrictions
contained in Section 203 of the Delaware applicable to a "business combination"
(as defined in Section 203) will not apply to the execution, delivery or
performance of this Agreement or the respective stockholders agreements dated as
of the date hereof between Parent or the consummation of the Offer or the Merger
or the other transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION
Parent and Acquisition hereby, jointly and severally, represent and warrant
to the Company that, except as set forth in the written disclosure schedule
delivered on or prior to the date hereof, by Parent to the Company that is
arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article III (the "Parent Disclosure Schedule"):
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SECTION 4.1 Organization and Qualification; Subsidiaries. Each of Parent
and its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority and is in possession of all
Approvals necessary to own, lease and operate the properties it purports to own,
operate or lease and to carry on its business as it is now being conducted,
except where the failure to be so organized, existing and in good standing or to
have such power, authority and Approvals would not have a Material Adverse
Effect. Each of Parent and each of its subsidiaries is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned, leased or
operated by it or the nature of its activities makes such qualification or
licensing necessary, except for such failures to be so duly qualified or
licensed and in good standing that would not have a Material Adverse Effect.
SECTION 4.2 Authority Relative to this Agreement. Each of Parent and
Acquisition has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Acquisition and the consummation by Parent and
Acquisition of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and
Acquisition, and no other corporate proceedings on the part of Parent or
Acquisition are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent and Acquisition and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of Parent and Acquisition enforceable against each of
them in accordance with its terms.
SECTION 4.3 No Conflict, Required Filings and Consents.
(a) Except as set forth in Section 4.3(a) of the Parent Disclosure
Schedule, the execution and delivery of this Agreement by Parent and Acquisition
do not, and the performance of this Agreement by Parent and Acquisition will
not, (i) conflict with or violate the Articles of Organization (or Certificate
of Incorporation) or By-Laws of Parent or Acquisition, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Parent or any of its subsidiaries or by which its or their respective properties
are bound or affected, or (iii) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or impair Parent's or any of its subsidiaries' rights or alter the rights
or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Parent
or any of its subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or any of its subsidiaries is a party or by which
Parent or any of its subsidiaries or its or any of their respective properties
are bound or affected, except in any such case for any such conflicts,
-24-
violations, breaches, defaults or other occurrences that would not have a
Material Adverse Effect.
(b) The execution and delivery of this Agreement by Parent and
Acquisition does not, and the performance of this Agreement by Parent and
Acquisition will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Securities Act, the Exchange Act, the Blue Sky Laws, the pre-merger notification
requirements of the HSR Act, and the filing and recordation of appropriate
merger or other documents as required by the Delaware Law, and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or delay consummation of
the Offer or the Merger, or otherwise prevent Parent or Acquisition from
performing their respective obligations under this Agreement, and would not have
a Material Adverse Effect.
SECTION 4.4 Offer Documents; Schedule 14D-9; Proxy Statement. Neither
the Offer Documents, nor any of the information provided by Parent or
Acquisition and/or by their auditors, legal counsel, financial advisors or other
consultants or advisors specifically for use in the Schedule 14D-9 shall, on the
respective dates the Offer Documents, the Schedule 14D-9 or any supplements or
amendments thereto are filed with the SEC or on the date first published, sent
or given to the Company's stockholders, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Notwithstanding
the foregoing, neither Parent nor Acquisition makes any representation or
warranty with respect to any information provided by the Company and/or by its
auditors, legal counsel, financial advisors or other consultants or advisors
specifically for use in the Offer Documents. None of the information provided
by Parent or Acquisition and/or by their auditors, attorneys, financial advisors
or other consultants or advisors specifically for use in the Proxy Statement
shall, at the time filed with the SEC, at the time mailed to the Company's
stockholders, 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 are made, not
misleading. The Offer Documents will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder.
SECTION 4.5 No Prior Activities; Financing.
(a) Acquisition was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement. As of the date hereof and the
Effective Time, except for obligations or liabilities incurred in connection
with its incorporation or organization and the transactions contemplated by this
Agreement and except for this Agreement and any other agreements or arrangements
contemplated by this Agreement, Acquisition has not and will not
-25-
have incurred, directly or indirectly, through any subsidiary or affiliate, any
obligations or liabilities or engaged in any business activities of any type or
kind whatsoever or entered into any agreements or arrangements with any person.
(b) Acquisition has available to it funds necessary to satisfy its
obligations hereunder including, without limitation, the obligation to pay the
Per Share Amount pursuant to the Offer and the Merger Consideration pursuant to
the Merger and to pay all related fees and expenses in connection with the Offer
and the Merger.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1 Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the time Acquisition's designees are elected as directors of the Company
pursuant to Section 1.3, unless Parent shall otherwise agree in writing, which
agreement shall not be unreasonably withheld or delayed, the Company shall
conduct its business and shall cause the businesses of its subsidiaries to be
conducted only in, and the Company and its subsidiaries shall not take any
action except in, the ordinary course of business and in the manner consistent
with past practice; and the Company shall use reasonable commercial efforts to
preserve substantially intact the business organization of the Company and its
subsidiaries, to keep available the services of the present officers, employees
and consultants of the Company and its subsidiaries and to preserve the present
relationships of the Company and its subsidiaries with customers, suppliers and
other persons with which the Company or any of its subsidiaries has significant
business relations. By way of amplification and not limitation, except as
contemplated by this Agreement, neither the Company nor any of its subsidiaries
shall, during the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the time Acquisition's
designees are elected as directors of the Company pursuant to Section 1.3,
directly or indirectly do, or propose to do, any of the following without the
prior written consent of Parent, which consent shall not be unreasonably
withheld or delayed:
(a) amend or otherwise change the Certificate of Incorporation or By-Laws
of the Company or any of its subsidiaries;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, without limitation, any phantom interest) in the
Company, any of its subsidiaries or affiliates (except for (i) the issuance of
shares of Company Common Stock issuable pursuant to Stock Options listed on
Schedule 3.11 hereto;
-26-
(ii) the grant of options under the Company's Stock Option Plans consistent with
past practice to purchase up to 50,000 shares of Company Common Stock at the
market value on the date of grant to newly hired employees (excluding executive
officers), and the issuance of shares upon exercise thereof, (iii) the issuance
of shares of Company Common Stock issuable upon conversion of the Notes, (iv)
the issuance of shares of Company Common Stock issuable to participants in the
Company's Employee Stock Purchase Plan pursuant to the terms thereof, (v) the
issuance of shares of Company Common Stock at not less than the fair market
value thereof in connection with Permitted Acquisitions (as defined in Section
5.1(e)) and (vi) the issuance of shares of Company Common Stock to former
holders of shares of capital stock of STAT Healthcare, Inc.
(c) sell, pledge, dispose of or encumber any assets of the Company or any
of its subsidiaries (except for (i) sales of assets in the ordinary course of
business and in a manner consistent with past practice, (ii) disposition of
obsolete or worthless assets, (iii) sales of immaterial assets not in excess of
$500,000 and (iv) encumbrances on assets to secure purchase money financings of
equipment and capital improvements and in connection with the financing of
Permitted Acquisitions (as defined in Section 5.1(e))).
(d) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of any of its capital stock, except that a wholly owned subsidiary of
the Company may declare and pay a dividend or make advances to its parent or the
Company, (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock, or (iii) amend the terms
or change the period of exercisability of, purchase, repurchase, redeem or
otherwise acquire, or permit any subsidiary to purchase, repurchase, redeem or
otherwise acquire, any of its securities or any securities of its subsidiaries,
including, without limitation, shares of Company Common Stock or any option,
warrant or right, directly or indirectly, to acquire shares of Company Common
Stock, or propose to do any of the foregoing; except for the acceleration of
options pursuant to the terms of the Company Common Stock Option Plans and the
net exercise of such options and the repurchase of Notes as required by the
terms thereof;
(e) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof other than (A) those listed on Section 5.1(e) of the Company Disclosure
Schedule and (B) ambulance service providers and other health care providers in
the continental United States and Hawaii, whether acquired solely for cash,
promissory notes that are subordinated as required by the Company's lenders, or
Company Common Stock issued at fair market value, or any combination thereof
(together with the acquisitions described in clause (A), "Permitted
Acquisitions"), provided that the total consideration paid for all such
acquisitions described in this clause (B) consummated prior to March 31, 1997
shall not exceed $50 million and the total consideration paid for all such
acquisitions described in this clause (B) consummated prior to July 15, 1997
shall not exceed $100 million; (ii) incur any indebtedness for borrowed money or
issue any
-27-
debt securities or assume, guarantee or endorse or otherwise as an accommodation
become responsible for, the obligations of any person or, except in the ordinary
course of business consistent with past practice or in connection with purchases
of equipment or capital improvements or in Permitted Acquisitions, make any
loans or advances (other than loans or advances to or from direct or indirect
wholly owned subsidiaries), (iii) enter into or amend any material contract or
agreement other than in the ordinary course of business or where such contract
or amendment would not have a Material Adverse Effect; (iv) authorize any
capital expenditures or purchase of fixed assets which are, in the aggregate, in
excess of the amounts set forth in Section 5.1(e)(iv) of the Company Disclosure
Schedule for the Company and its subsidiaries taken as a whole; or (v) enter
into or amend any contract, agreement, commitment or arrangement to effect any
of the matters prohibited by this Section 5.1(e);
(f) except as set forth in Section 5.1(f) of the Company Disclosure
Schedule, increase the compensation payable or to become payable to its officers
or employees, except for increases in salary or wages of employees of the
Company or its subsidiaries in accordance with past practice and in amounts that
are in the aggregate reflected in the budgets previously provided to Parent or,
except in the ordinary course of business, grant any severance or termination
pay to, or enter into any employment or severance agreement with any director,
officer or other employee of the Company or any of its subsidiaries, or
establish, adopt, enter into or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
current or former directors, officers or employees, except, in each case, as may
be required by law;
(g) take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue recognition,
payments of accounts payable and collection of accounts receivable);
(h) make any material tax election inconsistent with past practice or
settle or compromise any material federal, state, local or foreign tax liability
or agree to an extension of a statute of limitations, except to the extent the
amount of any such settlement has been reserved for in the financial statements
contained in the Company SEC Reports filed prior to the date of this Agreement;
(i) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities reflected or reserved against in
the financial statements contained in the Company SEC Reports filed prior to the
date of this Agreement or incurred in the ordinary course of business and
consistent with past practice; or
-28-
(j) take, or agree in writing or otherwise to take, any of the actions
described in Sections 5.1(a) through (i) above, or any action which would make
any of the representations or warranties of the Company contained in this
Agreement untrue or incorrect or prevent the Company from performing or cause
the Company not to perform its covenants hereunder.
SECTION 5.2 No Solicitation.
(a) The Company shall not, directly or indirectly, through any officer,
director, employee, representative or agent of the Company or any of its
subsidiaries, (i) solicit, initiate or encourage the initiation of any inquiries
or proposals regarding any merger, sale of substantial assets, sale of shares of
capital stock (including without limitation by way of a tender offer, but not in
connection with Permitted Acquisitions) or similar transactions involving the
Company or any subsidiaries of the Company other than the Merger (any of the
foregoing inquiries or proposals being referred to herein as an "Acquisition
Proposal"), (ii) engage in negotiations or discussions concerning, or provide
any nonpublic information to any person relating to, any Acquisition Proposal or
(iii) agree to approve or recommend any Acquisition Proposal. Nothing contained
in this Section 5.2(a) shall prevent the Board of Directors of the Company from
considering, negotiating, approving and recommending to the stockholders of the
Company, or taking the actions permitted by Section 5.2(c) with respect to, a
bona fide Acquisition Proposal not solicited in violation of this Agreement,
provided the Board of Directors of the Company determines in good faith (upon
written advice of independent counsel) that it is required to do so in order to
discharge properly its fiduciary duties.
(b) The Company shall immediately notify Parent after receipt of any
Acquisition Proposal, or any modification of or amendment to any Acquisition
Proposal, or any request for nonpublic information relating to the Company or
any of its subsidiaries in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company or any subsidiary by any
person or entity that informs the Board of Directors of the Company or such
subsidiary that it is considering making, or has made, an Acquisition Proposal.
Such notice to Parent shall be made orally and in writing, and shall indicate
whether the Company is providing or intends to provide the person making the
Acquisition Proposal with access to information concerning the Company as
provided in Section 5.2(c).
(c) If the Board of Directors of the Company receives a request for
material nonpublic information by a person who makes a bona fide Acquisition
Proposal, and the Board of Directors determines in good faith and upon the
written advice of independent counsel that it is required to cause the Company
to act as provided in this Section 5.2(c) in order to discharge properly the
directors' fiduciary duties, then, provided the person making the Acquisition
Proposal has executed a confidentiality agreement similar to the one then in
effect between the Company and Parent, the Company may provide such person with
access to information regarding the Company.
-29-
(d) The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any person (other than Parent and
Acquisition) conducted heretofore with respect to any of the foregoing. The
Company agrees not to release any third party from the confidentiality
provisions of any confidentiality agreement to which the Company is a party.
(e) The Company shall ensure that the officers, directors and employees
of the Company and its subsidiaries and any investment banker or other advisor
or representative retained by the Company are aware of the restrictions
described in this Section 5.2.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 HSR Act. As promptly as practicable after the date of this
Agreement, the Company and Parent shall file notifications under the HSR Act in
connection with the Merger and the transactions contemplated hereby and to
respond as promptly as practicable to any inquiries received from the Federal
Trade Commission (the "FTC") and the Antitrust Division of the Department of
Justice (the "Antitrust Division") for additional information or documentation
and to respond as promptly as practicable to all inquiries and requests received
from any State Attorney General or other governmental authority in connection
with antitrust matters.
SECTION 6.2 Access to Information; Confidentiality. Upon reasonable
notice and subject to restrictions contained in confidentiality agreements to
which such party is subject (from which such party shall use reasonable efforts
to be released), the Company shall (and shall cause each of its subsidiaries to)
afford to the officers, employees, accountants, counsel and other
representatives of Parent of Acquisition reasonable access, during the period to
the Effective Time, to all its properties, books, contracts, commitments and
records and, during such period, the Company shall (and shall cause each of its
subsidiaries to) furnish promptly to Parent or Acquisition all information
concerning its business, properties and personnel as such other party may
reasonably request, and each shall make available to the other the appropriate
individuals (including attorneys, accountants and other professionals) for
discussion of the other's business, properties and personnel as either Parent or
the Company may reasonably request. Parent and Acquisition shall keep such
information confidential in accordance with the terms of the confidentiality
letters dated December 23, 1996 (the "Confidentiality Letter"), between Parent
and the Company.
SECTION 6.3 Consents; Approvals. The Company and Parent shall each use
their best efforts to obtain all consents, waivers, approvals, authorizations or
orders (including, without limitation, all United States and foreign
governmental and regulatory rulings and approvals), and the Company and Parent
shall make all filings (including, without limitation,
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all filings with United States and foreign governmental or regulatory agencies)
required in connection with the authorization, execution and delivery of this
Agreement by the Company and Parent and the consummation by them of the
transactions contemplated hereby. The Company and Parent shall furnish all
information required to be included in the Joint Proxy Statement/Prospectus and
the Registration Statement, or for any application or other filing to be made
pursuant to the rules and regulations of any United States or foreign
governmental body in connection with the transactions contemplated by this
Agreement.
SECTION 6.4 Indemnification and Insurance.
(a) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
exculpation set forth in the Certificate of Incorporation and By-Laws of the
Company, which provisions shall not be amended, repealed or otherwise modified
for a period of three years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at the Effective Time
were directors, officers, employees or agents of the Company, unless such
modification is required by law.
(b) The Company shall, to the fullest extent permitted under applicable
law or under the Company's Certificate of Incorporation or By-Laws and
regardless of whether the Merger becomes effective, indemnify and hold harmless,
and, after the Effective Time, the Surviving Corporation shall, to the fullest
extent permitted under applicable law or under the Surviving Corporation's
Certificate of Incorporation or By-Laws, indemnify and hold harmless, each
present and former director, officer or employee of the Company or any of its
subsidiaries (collectively, the "Indemnified Parties") against any costs or
expenses (including attorneys' fees), judgments, fines, losses, claims, damages
and liabilities incurred in connection with, and amounts paid in settlement of,
any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative and wherever asserted, bought or filed, (x)
arising out of or pertaining to the transactions contemplated by this Agreement
or (y) otherwise with respect to any acts or omissions or alleged acts or
omissions occurring at or prior to the Effective Time, to the same extent as
provided in the respective Certificate of Incorporation or By-Laws of the
Company or the subsidiaries or any applicable contract or agreement as in effect
on the date hereof, in each case for a period of three years after the date
hereof. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) any
counsel retained by the Indemnified Parties for any period after the Effective
Time shall be reasonably satisfactory to the Surviving Corporation, (ii) after
the Effective Time, the Surviving Corporation shall pay the reasonable fees and
expenses of such counsel, promptly after statements therefor are received, and
(iii) the Surviving Corporation will cooperate in the defense of any such
matter; provided, however, that the Surviving Corporation shall not be liable
for any settlement effected without its written consent (which consent shall not
be unreasonably withheld or delayed); and provided, further, that, in the event
that any claim or claims for indemnification are asserted or made within such
three-year period, all rights to indemnification in respect of any such claim
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or claims shall continue until the disposition of any and all such claims. The
Indemnified Parties as a group may retain only one law firm to represent them
with respect to any single action unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnified Parties. The indemnity agreements of Parent and
the Surviving Corporation in this Section 5.7(b) shall extend, on the same terms
to, and shall inure to the benefit of and shall be enforceable by, each person
or entity who controls, or in the past controlled, any present or former
director, officer or employee of the Company or any of its subsidiaries.
(c) The Surviving Corporation shall honor and fulfill in all respects the
obligations of the Company pursuant to indemnification agreements with the
Company's directors and officers existing at or before the Effective Time.
(d) For a period of five years after the Effective Time, Parent shall
cause the Surviving Corporation to maintain in effect, if available, directors'
and officers' liability insurance covering those persons who are currently
covered by the Company's directors' and officers' liability insurance policy (a
copy of which has been made available to Parent) on terms (including the amounts
of coverage and the amounts of deductibles, if any) that are comparable to the
terms now applicable to directors and officers of Parent, or, if more favorable
to the Company's directors and officers, the terms now applicable to them under
the Company's current policies; provided, however, that in no event shall Parent
or the Surviving Corporation be required to expend in excess of 300% of the
annual premium currently paid by the Company for such coverage; and provided
further, that if the premium for such coverage exceeds such amount, Parent or
the Surviving Corporation shall purchase a policy with the greatest coverage
available for such 300% of the annual premium.
(e) From and after the Effective Time, Parent shall guarantee the
obligations of the Surviving Corporation under this Section 6.4.
(f) This Section shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, the Surviving Corporation
and the Indemnified Parties, shall be binding on all successors and assigns of
the Surviving Corporation and shall be enforceable by the Indemnified Parties.
In the event that Parent or Surviving Corporation or any of their successors or
assigns (i) consolidates or merges into any other person or entity and shall not
be the continuing or surviving corporation or entity in such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person or entity, then and in such case, proper provisions shall be made
so that the successors and assigns of Parent or the Surviving Corporation (as
the case may be) assume the obligations of Parent and the Surviving Corporation
set forth in this Section.
SECTION 6.5 Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence
of which would be likely to
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cause any representation or warranty contained in this Agreement to be
materially untrue or inaccurate, or (ii) any failure of the Company, Parent or
Acquisition, as the case may be, materially to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
SECTION 6.6 Further Action. Upon the terms and subject to the conditions
hereof, each of the parties hereto shall use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, to obtain in a
timely manner all necessary waivers, consents and approvals and to effect all
necessary registrations and filings, and otherwise to satisfy or cause to be
satisfied all conditions precedent to its obligations under this Agreement. The
foregoing covenant shall not include any obligations by Parent to agree to
divest, abandon, license or take similar action with respect to any assets of
Parent or the Company except such actions that would not have a Material Adverse
Effect on Parent and its subsidiaries taken as a whole.
SECTION 6.7 Public Announcements. Parent and the Company shall consult
with each other before issuing any press release with respect to the Merger or
this Agreement and shall not issue any such press release or make any such
public statement without the prior consent of the other party, which shall not
be unreasonably withheld; provided, however, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement as may upon the advice of counsel be required by law or the rules and
regulations of the New York Stock Exchange, Inc. ("NYSE"), if it has used all
reasonable efforts to consult with the other party.
SECTION 6.8 Conveyance Taxes. Parent and the Company shall cooperate in
the preparation, execution and filing of all returns, questionnaires,
applications, or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees, and any similar taxes which become
payable in connection with the transactions contemplated hereby that are
required or permitted to be filed on or before the Effective Time.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.1 Conditions to Obligation of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
33
(a) Purchase of Shares. Acquisition shall have purchased Shares pursuant
to the Offer;
(b) HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
(c) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect, nor shall any proceeding brought
by any administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, seeking any of the foregoing be pending;
and there shall not be any action taken, or any statute, rule, regulation or
order enacted, entered, enforced or deemed applicable to the Merger which makes
the consummation of the Merger illegal;
(d) Governmental Actions. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other inquiry
that might result in such an action or proceeding) by any governmental authority
or administrative agency before any governmental authority, administrative
agency or court of competent jurisdiction, nor shall there be in effect any
judgment, decree or order of any governmental authority, administrative agency
or court of competent jurisdiction, in either case, seeking to prohibit or limit
Parent from exercising all material rights and privileges pertaining to its
ownership of the Surviving Corporation or the ownership or operation by Parent
or any of its subsidiaries of all or a material portion of the business or
assets of Parent or any of its subsidiaries, or seeking to compel Parent or any
of its subsidiaries to dispose of or hold separate all or any material portion
of the business or assets of Parent or any of its subsidiaries (including the
Surviving Corporation and its subsidiaries), as a result of the Merger or the
transactions contemplated by this Agreement.
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, notwithstanding approval thereof by the
stockholders of the Company or Parent:
(a) by mutual written consent duly authorized by the Boards of Directors
of Parent, Acquisition and the Company; or
(b) by either Parent or the Company if a court of competent jurisdiction
or governmental, regulatory or administrative agency or commission shall have
issued a
34
nonappealable final order, decree or ruling or taken any other action having the
effect of permanently restraining, enjoining or otherwise prohibiting the Merger
(provided that the right to terminate this Agreement under this Section 8.1(b)
shall not be available to any party who has not complied with its obligations
under Section 6.6 and such noncompliance materially contributed to the issuance
of any such order, decree or ruling or the taking of such action); or
(c) by either Parent or the Company if Acquisition shall have (A)
terminated the Offer or (B) failed to accept for purchase and pay for Shares
pursuant to the Offer by April 15, 1997 unless Acquisition's actions are a
result of the receipt by the Company of an Acquisition Proposal or a request for
additional information under the HSR Act or the failure to obtain any necessary
governmental or regulatory approval, in which case if Acquisition shall have
failed to accept for purchase and pay for Shares by July 15, 1997 (provided that
the right to terminate this Agreement under this Section 8.1(c) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in any of the circumstances
described in clauses (A) and (B) before such date); or
(d) by Parent or the Company, prior to the purchase of Shares pursuant to
the Offer, if the Board of Directors of the Company shall withdraw, modify or
change its approval or recommendation of the Offer, this Agreement or the Merger
in a manner adverse to Parent; or
(e) by Parent or the Company, prior to the purchase of Shares pursuant to
the Offer, (i) if any representation or warranty of the Company or Parent,
respectively, set forth in this Agreement shall be untrue when made, or (ii)
upon a breach in any material respect of any covenant or agreement on the part
of the Company or Parent, respectively, set forth in this Agreement, in each
case where such untruth or breach would have a Material Adverse Effect on the
Company or the Parent, as the case may be (either (i) or (ii) above being a
"Terminating Breach"), provided, that, if such Terminating Breach is curable by
the Company or Parent, as the case may be, through the exercise of its
reasonable best efforts and for so long as the Company or Parent, as the case
may be, continues to exercise such reasonable best efforts, neither Parent nor
the Company, respectively, may terminate this Agreement under this Section
7.1(e).
SECTION 8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto or any of
its affiliates, directors, officers or stockholders except (i) as set forth in
Section 8.3 and Section 9.1 hereof, and (ii) except as otherwise provided in
Section 8.3, nothing herein shall relieve any party from liability for any
Termination Breach hereof by such party.
SECTION 8.3 Fees and Expenses.
35
(a) Except as set forth in this Section 8.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated.
(b) The Company shall pay Parent a fee of $17.5 million (the "Company
Fee"), upon the first to occur of the following events:
(i) the termination of this Agreement by Parent pursuant to Section
8.1(d); or
(ii) the termination of this Agreement by Parent pursuant to Section
8.1(e) on account of a Terminating Breach by the Company.
(c) The Company Fee payable pursuant to Section 8.3(b) shall be paid
within two (2) business days after the first to occur of any of the events
described in Section 8.3(b)(i) or (ii); provided, that, in no event shall the
Company be required to pay such Fee to Parent if, immediately prior to the
termination of this Agreement, Parent was in breach of any of its material
obligations under this Agreement. The payment of Company Fee shall be Parent's
sole and exclusive remedy for the event giving rise to the payment of the
Company Fee.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Effectiveness of Representations, Warranties and Agreements;
Knowledge, Etc.
(a) Except as otherwise provided in this Section 9.1, the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.1, as the case may be, except that (i) if the Merger is
consummated the agreements set forth in Article II shall survive the Effective
Time indefinitely, (ii) the agreements in Section 6.4 shall survive in
accordance with their respective terms and (iii) the agreements set forth in
Section 8.3 shall survive termination indefinitely. The Confidentiality Letter
shall survive termination of this Agreement as provided therein.
(b) Any disclosure made with reference to one or more sections of the
Company Disclosure Schedule or the Parent Disclosure Schedule shall be deemed
disclosed only with respect to such section.
36
SECTION 9.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made if and when delivered personally or by overnight courier to the parties
at the following addresses or sent by electronic transmission, with confirmation
received, to the telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like notice):
(a) If to Parent or Acquisition:
▇▇▇▇▇▇▇ Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President and General Counsel
(b) If to the Company:
American Medical Response, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.3 Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliates" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person; including, without limitation, any partnership
or joint venture in which the
37
Company (either alone, or through or together with any other subsidiary) has,
directly or indirectly, an interest of 10% or more;
(b) "beneficial owner" with respect to any shares of Company Common Stock
means a person who shall be deemed to be the beneficial owner of such shares (i)
which such person or any of its affiliates or associates (as such term is
defined in Rule 12b-2 of the Exchange Act) beneficially owns, directly or
indirectly, (ii) which such person or any of its affiliates or associates has,
directly or indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of consideration
rights, exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding, or (iii) which are
beneficially owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
shares;
(c) "business day" means any day other than a day on which banks in New
York are required or authorized to be closed;
(d) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(e) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in Section
13(d)(3) of the Exchange Act); and
(f) "subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means any corporation, partnership,
joint venture or other legal entity of which the Company, the Surviving
Corporation, Parent or such other person, as the case may be (either alone or
through or together with any other subsidiary), owns, directly or indirectly,
more than 50% of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity.
SECTION 9.4 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after approval
of the Merger by the stockholders of the Company, no amendment may be made which
by law requires further approval by such stockholders without such further
approval. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
38
SECTION 9.5 Waiver. At any time prior to the Effective Time, any party
hereto may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
SECTION 9.6 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
SECTION 9.8 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and undertakings (other than the
Confidentiality Letters), both written and oral, among the parties, or any of
them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein.
SECTION 9.9 Assignment; Guarantee of Acquisition Obligations. This
Agreement shall not be assigned by operation of law or otherwise, except that
Parent and Acquisition may assign all or any of their rights hereunder to any
affiliate provided that no such assignment shall relieve the assigning party of
its obligations hereunder. Parent guarantees the full and punctual performance
by Acquisition of all the obligations hereunder of Acquisition or any such
assignees.
SECTION 9.10 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, including, without limitation, by way of subrogation, other
than Section 6.4 (which is intended to be for the benefit of the Indemnified
Parties and may be enforced by such Indemnified Parties).
SECTION 9.11 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any
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such right preclude other or further exercise thereof or of any other right.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 9.12 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware
applicable to contracts executed and fully performed within the State of
Delaware.
SECTION 9.13 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[This space intentionally left blank.]
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IN WITNESS WHEREOF, Parent, Acquisition and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
▇▇▇▇▇▇▇ INC.
By:/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
MEDTRANS ACQUISITION CO.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
AMERICAN MEDICAL RESPONSE, INC.
By:/s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
-41-
ANNEX A
OFFER CONDITIONS
The capitalized terms used in this Annex A have the meanings set forth
in the attached Agreement, except that the term "Merger Agreement" shall be
deemed to refer to the attached Agreement and the term "Commission" shall be
deemed to refer to the SEC.
Notwithstanding any other provision of the Offer, Acquisition shall
not be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including without limitation, Rule 14e-1(c) under
the Exchange Act (relating to Acquisition's obligation to pay for or return
Shares promptly after termination or withdrawal of the Offer), pay for any
Shares tendered pursuant to the Offer, and may postpone the acceptance for
payment or, subject to the restriction referred to above, payment for any Shares
tendered pursuant to the Offer, and may terminate or amend the Offer and not
accept for payment any Shares, if (i) the Minimum Condition shall not have been
satisfied, or (ii) any applicable waiting period under the HSR Act shall not
have expired or been terminated; provided, that prior to April 15, 1997, (or, if
the conditions to the Offer have not been satisfied prior to April 15, 1997 as
the result of the receipt by the Company of an Acquisition Proposal or as a
result of a failure of the applicable waiting period under the HSR Act to expire
or the failure to obtain any necessary governmental or regulatory approvals,
prior to July 15, 1997) Acquisition shall not terminate the Offer by reason of
the nonsatisfaction of any of the conditions and shall extend the Offer, or
(iii) Acquisition shall not have been reasonably satisfied that the provisions
of Section 203 of the Delaware General Corporation Law are inapplicable to the
Offer and Merger, or (iv) at any time on or after five days after announcement
and prior to the acceptance for payment of Shares, any of the following
conditions occurs:
(a) there shall have been any action or proceeding brought by any
governmental authority before any court located or having jurisdiction within
the United States or Canada or any statute, regulation, legislation, judgment or
order, enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to the Offer or the Merger by any court, governmental, administrative
or regulatory authority or agency located or having jurisdiction within the
United States or Canada that could result in a Material Adverse Effect and have
the effect of: (i) making illegal, or otherwise directly or indirectly
restraining or prohibiting or imposing material penalties or fines or requiring
the payment of material damages in connection with the making of, the Offer, the
acceptance for payment of, payment for, or ownership, directly or indirectly, of
some of or all the Shares by Parent or Acquisition, the consummation of the
Offer or the Merger; (ii) prohibiting or materially limiting the direct or
indirect ownership or operation by the Company or by Parent of all or any
material portion of the business or assets of the Company and its subsidiaries,
taken as a whole, or compelling Parent to dispose of or hold separate all or any
material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, as a result of the transactions
contemplated by the Merger Agreement; (iii) imposing or confirming material
limitations on the ability of Parent effectively to hold or to exercise full
rights of ownership of Shares, including, without limitation, the right to vote
any Shares on all matters properly presented to the stockholders of the Company;
or (iv) requiring divestiture by Parent or Acquisition, directly or indirectly,
of any Shares; or
(b) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger Agreement
or any of the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and correct both when made and as of the date
of consummation of the Offer (except to the extent such representations and
warranties of the Company address matters only as of a particular date, in which
case as of such date) except where the failure to perform such covenants or
agreements or the failure of such representation and warranties to be so true
and correct would not have a Material Adverse Effect; or
(c) The Merger Agreement shall have been terminated in accordance with
its terms or the Offer shall have been amended or terminated with the consent of
the Company;
which, in the reasonable judgment of Acquisition in any such case, and
regardless of the circumstances (including any action or omission by Acquisition
not inconsistent with the Merger Agreement) giving rise to any such condition,
makes it inadvisable to proceed with such acceptance for payment or payments of
Shares.
The foregoing conditions are for the sole benefit of Acquisition
and may be asserted by Acquisition regardless of the circumstances giving
rise to any such condition or may be waived by Acquisition in whole or in
part at any time or from time to time in its sole discretion. The failure by
Acquisition at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect
to particular facts or circumstances shall not be deemed a waiver with
respect to any other facts or circumstances, and each such right shall be
deemed an ongoing right that may be asserted at any time or from time to time.
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