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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JULY 3, 1996
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UNISON HEALTHCARE CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-27374 86-0684011
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(Commission File Number) (I.R.S. Employer Identification No.)
7272 East Indian School Road, Suite 214, Scottsdale, Arizona 85251
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(Address of Principal Executive Offices) (Zip Code)
(602) 423-1954
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS.
On July 3, 1996, Unison HealthCare Corporation ("Unison") and Labco
Acquisition Co., a newly formed, wholly owned subsidiary of Unison ("Labco"),
entered into an Agreement and Plan of Merger (the "Ampro Agreement") with
American Professional Holding, Inc. ("Ampro"). The following description of the
Ampro Agreement is qualified in its entirety by reference to the Ampro Agreement
filed as an exhibit to this report.
Pursuant to the Ampro Agreement, and subject to the approval of the
Ampro shareholders and the satisfaction of other conditions, Labco and Ampro
will merge, with Ampro being the surviving corporation, and Unison will own all
of the outstanding shares of the surviving corporation. In the merger, the
outstanding shares of Ampro Common Stock will be converted into the right to
receive that number of shares of Unison Common Stock obtained by dividing the
number of issued and outstanding shares of Ampro prior to the effective time of
the merger by 521,000. The number of shares of Unison Common Stock to be
received by Ampro shareholders in the merger is subject to reduction based on
the net income of Ampro for the quarter ended June 30, 1996. Fractional shares
of Unison Common Stock will not be issued; instead, the value thereof will be
paid in cash based on the per share closing price on the Nasdaq National Market
of Unison Common Stock during the 20 consecutive trading days ending on the
fifth trading day prior to the effective time of the merger.
Unison and Memphis Acquisition Co., a newly formed, wholly owned
subsidiary of Unison ("Memco"), entered into an Agreement and Plan of Merger
also dated as of July 3, 1996 (the "Memphis Agreement") with Memphis Clinical
Laboratory, Inc. ("Memphis"). The following description of the Memphis Agreement
is qualified in its entirety by reference to the Memphis Agreement filed as an
exhibit to this report.
Pursuant to the Memphis Agreement, and subject to the approval of the
Memphis shareholders and the satisfaction of other conditions, Memco and Memphis
will merge, with Memphis being the surviving corporation, and Unison will own
all of the outstanding shares of the surviving corporation. In the merger, three
shareholders who currently hold approximately 35% of the outstanding shares of
Memphis will receive pro rata portions of 19,000 shares of Unison Common Stock
and the holder of the remaining shares of Memphis will receive cash, subject to
adjustment based on the effective time of the merger, currently estimated at
$233,750, and a promissory note in the original principal amount of $250,000.
The Ampro Agreement and the Memphis Agreement are mutually contingent.
The three shareholders of Memphis who will receive shares of Unison pursuant to
the Memphis Agreement beneficially own approximately 92% of the issued and
outstanding common stock of Ampro.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
UNISON HEALTHCARE CORPORATION
July 19, 1996 By /s/ Jerry M. Walker
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Jerry M. Walker
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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<S> <C>
2.1 Agreement and Plan of Merger among Unison HealthCare
Corporation, a Delaware corporation, Labco Acquisition Co.,
a Delaware corporation, and American Professional Holding,
Inc., a Utah corporation
2.2 Agreement and Plan of Merger among Unison HealthCare
Corporation, a Delaware corporation, Memphis Acquisition
Co., a Delaware corporation, and Memphis Clinical
Laboratory, Inc., a Tennessee corporation
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
Among
UNISON HEALTHCARE CORPORATION
LABCO ACQUISITION CO.
and
AMERICAN PROFESSIONAL HOLDING, INC.
Dated July 3, 1996
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TABLE OF CONTENTS
Page
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RECITALS............................................................... 1
SECTION 1 DEFINITIONS................................................. 2
SECTION 2 THE MERGER AND EFFECTIVE TIME; SURVIVING
CORPORATION; CLOSING........................................ 11
Section 2.1 The Merger.......................................... 11
Section 2.2 Effective Time...................................... 12
Section 2.3 Articles of Incorporation And Bylaws................ 12
Section 2.4 Board Of Directors.................................. 12
Section 2.5 Closing............................................. 12
Section 2.6 Closing Obligations................................. 12
SECTION 3 CONVERSION OF SHARES........................................ 14
Section 3.1 Per Share Consideration............................. 14
Section 3.2 Conversion Of Shares In The Merger.................. 14
Section 3.3 Adjustments to Per Share Consideration.............. 16
Section 3.4 Exchange of Certificates............................ 16
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY............... 18
Section 4.1 Organization and Good Standing;
Capitalization; Agreements Regarding
Capital Stock....................................... 18
Section 4.2 Authority; No Conflict.............................. 19
Section 4.3 Capitalization...................................... 20
Section 4.4 Financial Statements................................ 20
Section 4.5 Books and Records................................... 21
Section 4.6 Title to Properties; Encumbrances................... 21
Section 4.7 Condition and Sufficiency of Assets................. 22
Section 4.8 Accounts Receivable................................. 22
Section 4.9 Prepaid Supplies.................................... 22
Section 4.10 No Undisclosed Liabilities.......................... 23
Section 4.11 Taxes............................................... 23
Section 4.12 No Material Adverse Change.......................... 24
Section 4.13 Employee Benefits................................... 24
Section 4.14 Compliance with Legal Requirements;
Governmental Authorizations......................... 29
Section 4.15 Legal Proceedings; Orders........................... 30
Section 4.16 Absence of Certain Changes and Events............... 30
Section 4.17 Contracts; No Defaults.............................. 31
Section 4.18 Insurance........................................... 34
Section 4.19 Environmental Matters............................... 36
Section 4.20 Employees........................................... 38
Section 4.21 Labor Relations; Compliance......................... 39
Section 4.22 Intellectual Property............................... 39
Section 4.23 Certain Payments.................................... 41
Section 4.24 Disclosure.......................................... 42
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Section 4.25 Relationships with Related Persons................ 42
Section 4.26 Accounting Matters................................ 43
Section 4.27 Brokers or Finders................................ 43
SECTION 5 REPRESENTATIONS AND WARRANTIES OF UNISON AND
LABCO..................................................... 43
Section 5.1 Organization and Good Standing.................... 43
Section 5.2 Authority; No Conflict............................ 43
Section 5.3 Certain Proceedings............................... 44
Section 5.4 SEC Documents; Financial Statements............... 44
Section 5.5 Information Supplied.............................. 45
Section 5.6 Interim Operations of LABCO....................... 46
Section 5.7 Brokers or Finders................................ 46
Section 5.8 Activities After Closing.......................... 46
Section 5.9 Disclosure........................................ 46
Section 5.10 Legal Proceedings; Orders......................... 46
Section 5.11 Capitalization.................................... 46
Section 5.12 Merger Consideration.............................. 47
SECTION 6 FURTHER COVENANTS PRIOR TO CLOSING DATE................... 47
Section 6.1 Access and Investigation.......................... 47
Section 6.2 Operation of the Businesses of the
Acquired Companies................................ 47
Section 6.3 Negative Covenant................................. 47
Section 6.4 Required Approvals................................ 48
Section 6.5 Shareholders' Meeting, Merger Information
Statement and Registration Statement.............. 48
Section 6.6 Tax Representation Letter of the Company;
No Disqualifying Action........................... 50
Section 6.7 Tax Representation Letters of
Shareholders...................................... 50
Section 6.8 Agreements of Affiliates.......................... 51
Section 6.9 Delivery of Disclosure Schedules.................. 51
Section 6.10 Notification by the Company....................... 51
Section 6.11 Notification by Unison or LABCO................... 52
Section 6.12 No Negotiation.................................... 52
Section 6.13 Tax Representation Letter of Unison and
LABCO............................................. 53
Section 6.14 Pooling-of-Interests.............................. 53
Section 6.15 Nasdaq Listing.................................... 53
Section 6.16 Approvals of Governmental Bodies.................. 53
Section 6.17 Best Efforts...................................... 53
SECTION 7 CONDITIONS PRECEDENT TO UNISON'S AND LABCO'S
OBLIGATION TO CLOSE....................................... 54
Section 7.1 Accuracy of Representations....................... 54
Section 7.2 Company's Performance............................. 54
Section 7.3 Shareholder Approval.............................. 54
Section 7.4 Board Approval.................................... 54
Section 7.5 Effectiveness of Registration Statement........... 54
Section 7.6 Listing Approval.................................. 54
Section 7.7 Consents.......................................... 54
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Section 7.8 Additional Documents................................ 55
Section 7.9 No Proceedings...................................... 56
Section 7.10 No Claim Regarding Stock Ownership or
Merger Consideration................................ 56
Section 7.11 No Prohibition...................................... 56
Section 7.12 Termination of Agreements........................... 56
Section 7.13 Dissenters' Rights.................................. 56
Section 7.14 Agreement for Acquisition of Memphis
Clinical Laboratory Inc............................. 57
SECTION 8 CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO
CLOSE....................................................... 57
Section 8.1 Accuracy of Representations......................... 57
Section 8.2 Unison's and LABCO's Performance.................... 57
Section 8.3 Board Approval...................................... 57
Section 8.4 Shareholder Approval................................ 57
Section 8.5 Effectiveness of Registration Statement............. 57
Section 8.6 Listing Approval.................................... 57
Section 8.7 Consents............................................ 58
Section 8.8 Additional Documents................................ 58
Section 8.9 No Proceeding....................................... 58
Section 8.10 No Prohibition...................................... 59
Section 8.11 Agreement for Acquisition of Memphis
Clinical Laboratory Inc............................. 59
SECTION 9 TERMINATION................................................. 59
Section 9.1 Termination Events.................................. 59
Section 9.2 Special Fees........................................ 60
Section 9.3 Effect of Termination............................... 61
SECTION 10 GENERAL PROVISIONS......................................... 61
Section 10.1 Expenses............................................ 61
Section 10.2 Public Announcements................................ 61
Section 10.3 Confidentiality..................................... 62
Section 10.4 Notices............................................. 62
Section 10.5 Jurisdiction; Service of Process.................... 63
Section 10.6 Further Assurances.................................. 63
Section 10.7 Combined Operating Results.......................... 63
Section 10.8 Waiver.............................................. 63
Section 10.9 Entire Agreement and Modification................... 64
Section 10.10 Disclosure Schedules................................ 64
Section 10.11 Assignments, Successors, and No Third-
Party Rights........................................ 64
Section 10.12 Severability........................................ 65
Section 10.13 Section Headings, Construction...................... 65
Section 10.14 Time of Essence..................................... 65
Section 10.15 Governing Law....................................... 65
Section 10.16 Counterparts........................................ 65
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger ("Agreement") is made as of July 3,
1996, among UNISON HEALTHCARE CORPORATION, a Delaware corporation ("Unison"),
LABCO ACQUISITION CO., a Delaware corporation ("LABCO"), and AMERICAN
PROFESSIONAL HOLDING, INC., a Utah corporation (the "Company").
RECITALS
A. Unison HealthCare Corporation, a Delaware corporation ("Unison"), is
engaged in the business of owning, leasing and managing nursing homes and other
types of care facilities and the delivery of ancillary services, and LABCO is a
wholly-owned subsidiary of Unison;
B. LABCO and the Company desire that LABCO be merged into the Company
pursuant to this Agreement and in accordance with the applicable statutes of the
State of Utah;
C. The Company is principally engaged in the business of owning and
operating medical laboratories for the commercial processing and evaluation of
various types of human tissues;
D. The respective Boards of Directors of LABCO and the Company have
each approved the merger of LABCO with and into the Company pursuant to the
provisions of this Agreement;
E. The Board of Directors of the Company has duly resolved that this
Agreement be submitted to a vote of the Company's shareholders in accordance
with the Utah Revised Business Corporation Act;
F. Unison shall prepare a Registration Statement on Form S-4 to be
filed with the Securities and Exchange Commission registering the shares of
Unison Common Stock to be issued to the Company shareholders in the Merger,
which Registration Statement shall include an information statement of the
Company to be used in connection with the vote of the shareholders of the
Company authorizing the Merger;
G. For federal income tax purposes, it is intended that the Transaction
shall constitute a reorganization within the meaning of Sections 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended; and
H. Unison and certain shareholders of the Company are separately
negotiating for the acquisition by Unison of all of the issued and outstanding
capital stock of Memphis Clinical Laboratory Inc.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
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SECTION 1 DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
set forth below:
"ACQUIRED COMPANIES" shall mean the Company and its Subsidiaries,
collectively.
"AFFILIATE AGREEMENTS" shall have the meaning set forth in Section 6.8.
"APPLICABLE CONTRACT" shall mean any Contract involving $5,000 or more
or which are not cancelable within 30 days (a) under which any Acquired Company
has or may acquire any rights, (b) under which any Acquired Company has or may
become subject to any obligation or liability, or (c) by which any Acquired
Company or any of the assets owned or used by it is or may become bound.
"ARTICLES OF MERGER" shall have the meaning set forth in Section 2.2.
"AVERAGE CLOSING PRICE" shall mean the average per share closing price
on the Nasdaq National Market of Unison Common Stock during the 20 consecutive
trading days ending on the fifth trading day prior to the Effective Time.
"BALANCE SHEET" shall have the meaning set forth in Section 4.4.
"BEST EFFORTS" shall mean the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible, without incurring unreasonable
expense.
"BREACH" of a representation, warranty, covenant, obligation, or other
provision of this Agreement or any instrument delivered pursuant to this
Agreement, shall mean any inaccuracy in or breach of, or any failure to perform
or comply with, such representation, warranty, covenant, obligation, or other
provision.
"CLOSING" shall have the meaning set forth in Section 2.5.
"CLOSING DATE" shall mean the date and time as of which the Closing
actually takes place.
"COMPANY" shall have the meaning set forth in the first paragraph of
this Agreement.
"CONSENT" shall mean any approval, consent, ratification, waiver, or
other authorization (including any Governmental Authorization).
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"CONTEMPLATED TRANSACTIONS" shall mean all of the transactions
contemplated by this Agreement, including:
(a) the Merger;
(b) the execution, delivery, and performance of the Affiliate
Agreements, Employment Agreements, the Releases and the Escrow Agreement; and
(c) the performance by the Company and LABCO of their
respective covenants and obligations under this Agreement.
"CONTRACT" shall mean any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"DGCL" shall mean the Delaware General Corporation Law.
"DISCLOSURE SCHEDULES" shall mean the disclosure schedules delivered by
the Company to Unison and LABCO in connection with the execution and delivery of
this Agreement.
"EFFECTIVE TIME" shall have the meaning set forth in Section 2.2
hereof.
"EMPLOYMENT AGREEMENTS" shall mean employment agreements between the
Company and each of the Senior Managers (collectively, the "Employment
Agreements") in the form of Exhibit 2.6(a)(iv).
"ENCUMBRANCE" shall mean any charge, claim, community property
interest, condition, equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
"ENVIRONMENT" shall mean soil, land surface or subsurface strata,
surface waters (including navigable waters, ocean waters, streams, ponds,
drainage basins, and wetlands), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life, and any
other environmental medium or natural resource.
"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" shall mean any cost,
damages, expense, liability, obligation, or other responsibility arising from or
under Environmental Law or Occupational Safety and Health Law and consisting of
or relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);
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(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any investigation, cleanup, removal, containment, or other remediation
or response actions ("Cleanup") required by applicable Environmental Law or
Occupational Safety and Health Law (whether or not such Cleanup has been
required or requested by any Governmental Body or any other Person) and for any
natural resource damages; or
(d) any other compliance, corrective, investigative, or
remedial measures required under Environmental Law or Occupational Safety and
Health Law.
The terms "removal," "remedial," and "response action," include the
types of activities covered by the United States Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., as
amended ("CERCLA").
"ENVIRONMENTAL LAW" shall mean any Legal Requirement that requires or
relates to:
(a) advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants, medical waste or hazardous
substances or materials, violations of discharge limits, or other prohibitions
and of the commencements of activities, such as resource extraction or
construction, that could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged,
and used so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;
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(g) cleaning up pollutants that have been released, preventing
the threat of release, or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups
of them, for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
or any successor law, and regulations and rules issued pursuant to that Act or
any successor law.
"ESCROW AGENT" shall mean Harris Trust and Savings Bank.
"ESCROW AGREEMENT" shall have the meaning set forth in Section
2.6(a)(v).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCHANGE AGENT" shall mean Harris Trust and Savings Bank.
"FACILITIES" shall mean any real property, leaseholds, or other
interests currently or formerly owned or operated by any Acquired Company and
any buildings, plants, structures, or equipment (including motor vehicles and
rolling stock) currently or formerly owned or operated by any Acquired Company.
"GAAP" shall mean generally accepted United States accounting
principles, applied on a basis consistent with the basis on which the Balance
Sheet and the other financial statements referred to in Section 4.4 were
prepared.
"GOVERNMENTAL AUTHORIZATION" shall mean any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"GOVERNMENTAL BODY" shall mean any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
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(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"HAZARDOUS ACTIVITY" shall mean the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, and any
other act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Acquired
Companies.
"HAZARDOUS MATERIALS" shall mean any waste or other substance that is
listed, defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any Environmental Law, including any admixture or solution thereof,
and specifically including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing materials.
"INTELLECTUAL PROPERTY ASSETS" shall have the meaning set forth in
Section 4.22.
"INTERIM BALANCE SHEET" shall have the meaning set forth in Section
4.4.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, or any
successor law, and regulations issued by the IRS pursuant to the Internal
Revenue Code or any successor law.
"IRS" shall mean the United States Internal Revenue Service or any
successor agency, and, to the extent relevant, the United States Department of
the Treasury.
"KNOWLEDGE" of a particular fact or other matter shall mean such
individual is actually aware of such fact or other matter. A Person (other than
an individual) will be deemed to have "Knowledge" of a particular fact or other
matter if any individual who is serving as a director, or executive or operating
officer of such Person (or in any similar capacity) has Knowledge of such fact
or other matter.
"LEGAL REQUIREMENT" shall mean any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty.
"LETTER OF TRANSMITTAL" shall have the meaning set forth in
Section 3.4(b) hereof.
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"MEMPHIS" shall mean Memphis Clinical Laboratory Inc.
"MERGER" shall mean the merger of LABCO with and into the Company with
the Company being the surviving corporation pursuant to this Agreement.
"OBJECTING SHARES" shall have the meaning set forth in Section 3.2(d).
"OCCUPATIONAL SAFETY AND HEALTH LAW" shall mean any Legal Requirement
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, and any program, whether governmental or
private (including those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful working conditions.
"ORDER" shall mean any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS" shall mean an action taken by a Person
which:
(a) is consistent with the past practices of such Person and
is taken in the ordinary course of the normal day-to-day operations of such
Person;
(b) is not required to be authorized by the board of directors
of such Person (or by any Person or group of Persons exercising similar
authority); and
(c) is similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors (or by any Person or
group of Persons exercising similar authority), in the ordinary course of the
normal day-to-day operations of other Persons that are in the same line of
business as such Person.
"ORGANIZATIONAL DOCUMENTS" shall mean: (a) the articles or certificate
of incorporation and the bylaws of a corporation; (b) the partnership agreement
and any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any amendment
to any of the foregoing.
"PER SHARE CONSIDERATION" shall have the meaning set forth in Section
3.1.
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"PERSON" shall mean any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental Body.
"PLAN" shall have the meaning set forth in Section 4.13(a).
"PROCEEDING" shall mean any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"RELATED PERSON" shall mean with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material Interest;
or
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly under common
control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity); or
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(f) any Related Person of any individual described in clause
(b) or (c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse and (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (b) "Material Interest" means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of voting securities or other voting interests representing at least
10% of the outstanding voting power of a Person or equity securities or other
equity interests representing at least 10% of the outstanding equity securities
or equity interests in a Person.
"RELEASE" shall mean any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing into the
Environment, whether intentional or unintentional.
"RELEASES" shall have the meaning set forth in Section 2.6(a)(iii).
"REPRESENTATIVE" shall mean with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"RESERVE SHARES" shall have the meaning set forth in Section 3.2(a).
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"SENIOR MANAGERS" shall mean W. Jerome McGee and Harold N. McKinney.
"SHAREHOLDERS" shall mean all holders of the Shares.
"SHARES" shall mean all issued and outstanding shares of capital stock
of the Company.
"SUBSIDIARY" shall mean with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the
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happening of a contingency that has not occurred) are held by the Owner or one
or more of its Subsidiaries; when used without reference to a particular Person,
"Subsidiary" means a Subsidiary of the Company.
"TAX" shall mean any tax (including any income tax, capital gains tax,
value-added tax, sales tax, property tax, gift tax or estate tax), levy,
assessment, tariff, duty (including any customs duty), deficiency or other fee,
and any related charge or amount (including any fine, penalty, interest or
addition to tax), imposed, assessed or collected by or under the authority of
any Governmental Body or payable pursuant to any tax-sharing agreement or any
other Contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency or fee.
"TAX RETURN" shall mean any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection,
or payment of any Tax or in connection with the administration, implementation,
or enforcement of or compliance with any Legal Requirement relating to any Tax.
"THIRD PARTY" shall mean a Person other than Unison, LABCO or any
affiliate thereof.
"THIRD PARTY ACQUISITION" shall mean the occurrence of any of the
following events: (i) the acquisition of any of the Acquired Companies by
merger, consolidation, or other business combination transaction by a Third
Party; (ii) the acquisition by any Third Party of, or any divestiture or other
transaction resulting in the Company owning less than, 50% or more (in book
value or market value) of the total assets of the Company and its subsidiaries,
taken as a whole as of the date hereof; (iii) the acquisition by a Third Party
of 50% or more of the outstanding Shares, whether by tender offer, exchange or
otherwise; or (iv) the adoption by the Company of a plan of liquidation or a
plan of recapitalization or the declaration or payment of an extraordinary
dividend.
"THREAT OF RELEASE" shall mean a substantial likelihood of a Release
that may require action in order to prevent or mitigate damage to the
Environment that may result from such Release.
"THREATENED" in respect of any claim, Proceeding, dispute, action, or
other matter shall mean that any demand or statement has been made (orally or in
writing) or any notice has been given (orally or in writing).
"TRANSACTION EXPENSES" shall mean all out-of-pocket expenses and fees
up to $100,000 in the aggregate (including, without limitation, legal fees and
expenses, fees and expenses payable to
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all banks, investment banking firms, other financial institutions and other
persons and their respective agents and counsel for arranging, committing to
provide or providing any financing or services for the Merger and any
transactions contemplated thereby or structuring the transactions, and all fees
of counsel, accountants, experts, consultants and soliciting or information
firms to Unison and LABCO, and all printing, mailing and advertising expenses)
actually incurred and paid by Unison or LABCO or on their behalf in connection
with the transactions, including, without limitation, any litigation related
thereto and the financing thereof, and actually incurred and paid by banks,
investment banking firms, other financial institutions and other persons and
assumed by Unison or LABCO in connection with the negotiation, preparation,
execution and performance of this Agreement, the structuring and financing of
the Merger and any transactions contemplated hereby and thereby and any
litigation and any financing commitments or agreements relating thereto.
"URBCA" shall mean the Utah Revised Business Corporation Act.
"UNISON COMMON STOCK" shall mean the $.001 par value per share common
stock of Unison.
SECTION 2 THE MERGER AND EFFECTIVE TIME; SURVIVING CORPORATION; CLOSING
Section 2.1 The Merger. At the Effective Time, and subject to the terms
and conditions set forth herein, LABCO shall be merged with and into the Company
and the separate existence of LABCO shall thereupon cease, in accordance with
the applicable provisions of the URBCA. The Company shall be the surviving
corporation in the Merger (sometimes referred to herein as the "Surviving
Corporation") and will continue to be governed by the State of Utah and all of
its rights, privileges, immunities and franchises, public or private, and all of
its duties and liabilities as a corporation organized under the URBCA, will
continue unaffected by the Merger. The Merger will have the effects specified by
the URBCA.
Section 2.2 Effective Time. At the Closing, the Company and LABCO will
execute and deliver articles of merger (the "Articles of Merger") and a
certificate of merger (the "Certificate of Merger") substantially in the forms
of Exhibits 2.2(A) and 2.2(B), respectively, and will, as promptly as
practicable thereafter, cause the Articles of Merger to be filed with the
Division of Corporations and Commercial Code of the State of Utah, as provided
in Section 16-10a-1105 of the URBCA and the Certificate of Merger to be filed
with the Secretary of State of the State of Delaware as provided in Section
252(c) of the DGCL. Subject to and in accordance with the URBCA and DGCL, the
Merger shall become effective at the date and time specified in the Articles of
Merger and Certificate of Merger (the "Effective Time").
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Section 2.3 Articles of Incorporation And Bylaws. The Articles of
Incorporation and Bylaws of the Company as in effect immediately prior to the
Effective Time shall be the Articles of Incorporation and Bylaws of the
Surviving Corporation.
Section 2.4 Board Of Directors. From and after the Effective Time, the
Board of Directors of LABCO shall be the Board of Directors of the Surviving
Corporation.
Section 2.5 Closing. The closing of the transactions contemplated
herein (the "Closing") shall take place at the offices of Quarles & Brady, One
East Camelback, Suite 400, Phoenix, Arizona at 10:00 a.m. (local time) on
September 30, 1996 or at such other time and place as the parties may agree.
Subject to the provisions of Section 9, failure to consummate the Contemplated
Transactions on the date and time and at the place determined pursuant to this
Section 2.5 will not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
Section 2.6 Closing Obligations. At the Closing:
(a) The Company will deliver to Unison and LABCO:
(i) two copies of the Articles of Merger, each duly executed
on behalf of the Company;
(ii) two copies of the Certificate of Merger, each duly
executed on behalf of the Company;
(iii) releases in the form of Exhibit 2.6(a)(iii) executed by
each of the Senior Managers and the Maguire Limited Partnership (collectively,
the "Releases");
(iv) the Employment Agreements, executed by the Senior
Managers;
(v) an escrow agreement in the form of Exhibit 2.6(a)(v),
executed by the Company and the Escrow Agent (the "Escrow Agreement");
(vi) a certificate executed by the Company representing and
warranting to Unison and LABCO that each of the Company's representations and
warranties in this Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if made on
the Closing Date (giving full effect to any supplements to the Disclosure
Schedules that were delivered by the Company to Unison and LABCO prior to the
Closing Date in accordance with Section 6.10);
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(vii) a certificate executed by the Company representing and
warranting to Unison and LABCO that there has been no change to the Company Tax
Representation Letter delivered pursuant to Section 6.6;
(viii) one or more certificates executed by the Shareholders
listed on Schedule 6.7 representing and warranting to Unison and LABCO that
there has been no change to the Shareholder Tax Representation Letter delivered
pursuant to 6.7; and
(ix) copies of the resolutions of the Company's Board of
Directors and Shareholders duly authorizing the Contemplated Transactions.
(b) Unison and LABCO will deliver or cause to be delivered:
(i) to the Company two copies of the Articles of Merger, each
duly executed on behalf of LABCO;
(ii) to the Company two copies of the Certificate of Merger,
each duly executed on behalf of LABCO;
(iii) to the Company a certificate executed by Unison and
LABCO representing and warranting to the Company that each of Unison's and
LABCO's representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all respects as of
the Closing Date as if made on the Closing Date (giving full effect to any
supplements to the schedules, delivered by Unison and LABCO to the Company
pursuant to Section 5, prior to the Closing Date in accordance with Section
6.10);
(iv) to the Company the Escrow Agreement executed by Unison
and LABCO;
(v) to the Senior Managers the Employment Agreements executed
by LABCO;
(vi) to the Company, the Unison/LABCO Tax Representation
Letter pursuant to Section 6.13; and
(vii) copies of the resolutions of Unison's and LABCO's Board
of Directors and shareholders duly authorizing the Contemplated Transactions.
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SECTION 3 CONVERSION OF SHARES
Section 3.1 Per Share Consideration. If the Average Closing Price is
$11.00 or greater but not more than $15.00, the "Per Share Consideration"
(expressed in shares of Unison Common Stock) shall be a fraction the numerator
of which shall be, subject to adjustment as set forth in Section 3.2(f) and
Section 3.3, 521,000 and the denominator of which shall be the number of Shares
outstanding immediately prior to the Effective Time. Unison and LABCO may
terminate this Agreement if the Average Closing Price is greater than $15.00,
and the Company may terminate this Agreement if the Average Closing Price is
less than $11.00.
Section 3.2 Conversion Of Shares In The Merger. At the Effective Time,
by virtue of the Merger and without any action on the part of any holder of
capital stock of the Company:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares referred to in Section 3.2(b) below and
Objecting Shares) shall be canceled and extinguished and be converted into the
Per Share Consideration determined pursuant to Section 3.1, which shares shall
be distributed by the Exchange Agent to each Shareholder pursuant to Section 3.4
hereof; provided, however, that an amount corresponding to fractional shares
that are paid in cash pursuant to Section 3.2(e) need not be delivered and a
number of shares of Unison Common Stock equal to 10% of the aggregate Per Share
Consideration shall be reserved from the shares otherwise to be delivered to the
McKinney Trust, the McGee Trust and the Maguire Limited Partnership and
delivered by the Exchange Agent directly to the Escrow Agent pursuant to Section
3.4 hereof (all such shares to be delivered to the Escrow Agent are collectively
referred to herein as the "Reserve Shares"), which Reserve Shares shall be
available to satisfy those contingencies of the Company specifically identified
in the Escrow Agreement;
(b) Each share of the Company's capital stock issued and
outstanding and owned by any of the Acquired Companies and all unissued shares
of the Company's capital stock held by the Company immediately prior to the
Effective Time shall cease to be outstanding, be canceled and retired without
payment of any consideration therefor and cease to exist;
(c) Each share of Common Stock, par value $.01 per share, of
LABCO issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of Common
Stock, par value $.01 per share, of the Surviving Corporation;
(d) Notwithstanding anything in this Agreement to the
contrary, each Share which is issued and outstanding immediately prior to the
Effective Time and which is held by a Shareholder who
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has caused the Company to receive, before the vote of the Shareholders is taken
with respect to the Merger, written notice of such Shareholder's intent to
demand payment for such Shares if the Merger is effectuated, who has not voted
such Shares in favor of the Merger or consented thereto in writing, and who has
demanded appraisal rights with respect thereto in the manner provided in Section
16-10a-1323 of the URBCA or any successor statute (collectively, the "Objecting
Shares"), shall not be converted into or represent the right to receive the Per
Share Consideration provided for in the Section 3.2(a). Holders of Objecting
Shares, however, will be entitled, assuming compliance by them with all
applicable provisions of the URBCA, to receive the appraised value of such
shares in accordance with the applicable provisions of the URBCA;
(e) No fractional shares of Unison Common Stock shall be
issued in connection with the Merger. In lieu of any such fractional shares,
including any fractional shares resulting from the calculation of the Reserve
Shares, each Shareholder who would otherwise be entitled to receive a fraction
of a share of Unison Common Stock shall be entitled to receive instead an amount
in cash equal to such fraction multiplied by the Average Closing Price.
(f) If, between the date of this Agreement and the Effective
Time, the outstanding number of shares of Unison Common Stock shall have been
changed into a different number of shares by reason of a split-up or combination
of shares of Unison Common Stock, or with respect to such split-up or
combination there shall be declared a record date within said period with a
distribution date after the Effective Time or a stock dividend on Unison Common
Stock shall be declared with a record date within such period, the Per Share
Consideration to be delivered pursuant to Section 3.1, the adjustment as
provided in Section 3.3 and the $11.00 to $15.00 price range set forth in
Section 3.1 shall be appropriately adjusted.
Section 3.3 Adjustments to Per Share Consideration.
(a) The aggregate number of shares to be delivered under
Section 3.1 shall be subject to reduction based on net income of the Company for
the quarter ending June 30, 1996 (the "Second Quarter Net Income").
(b) As soon as reasonably practicable after the receipt of an
income statement for the Company for the quarter ending June 30, 1996, in
accordance with GAAP consistently applied throughout the period, which the
Company shall use its Best Efforts to furnish to Unison and LABCO within 30 days
of the end of such quarter, Unison shall:
(i) subtract from (1) the Second Quarter Net Income (2) that
portion ("Unison Testing Net Income") of Second Quarter
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Net Income attributable to testing by the Company at or for residents of
long-term care facilities owned, leased or managed by Unison or by any of its
Subsidiaries ("Revised Second Quarter Net Income"). Unison shall calculate
Unison Testing Net Income by multiplying (X) the revenue from testing by the
Company at or for residents of long-term care facilities owned, leased or
managed by Unison or by any of its Subsidiaries by (Y) the Acquired Companies'
average margin and subtracting from such product (Z) an amount for tax based on
an effective rate of 34%;
(ii) divide (1) Revised Second Quarter Net Income by (2) the
numerator of the Per Share Consideration under Section 3.1.
(c) To the extent that the amount obtained in Section 3.3(b)(ii)
is less than .22, Unison shall deduct from that number of shares of Unison
Common Stock to be delivered pursuant to Section 3.1 a number of shares
sufficient such that the calculation in Section 3.3(b)(ii) shall yield not less
than .22.
Section 3.4 Exchange of Certificates.
(a) As of the Effective Time, LABCO shall deposit with a bank
or trust company to be designated by LABCO (the "Exchange Agent"), for the
benefit of the holders of Shares, for exchange in accordance with this Section
3, through the Exchange Agent, (i) certificates representing the shares of
Unison Common Stock issuable pursuant to Section 3.2(a) in exchange for issued
and outstanding Shares, less the amount of such Shares to be delivered directly
to the Escrow Agent pursuant to such Section 3.2(a) and (ii) cash in an amount
sufficient for the consideration owed for fractional shares. Unison Common Stock
into which Shares shall be converted pursuant to the Transaction shall be deemed
to have been issued at the Effective Time.
(b) As soon as reasonably practicable after the Effective
Time, Unison and LABCO shall cause the Exchange Agent to mail to each record
holder of Shares (i) a letter of transmittal (the "Letter of Transmittal"),
which shall specify that delivery shall be effected, and risk of loss and title
to the certificates representing the Shares held by such record holder (the
"Certificates") shall pass, only upon delivery of the Certificates to the
Exchange Agent and which shall be in such form and have such other provisions as
LABCO shall reasonably specify and (ii) instructions for surrendering the
Certificates in exchange for certificates representing shares of Unison Common
Stock and for receiving cash payments in lieu of fractional shares of Unison
Common Stock. Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with such Letter of Transmittal duly executed and such other
documents as LABCO or the Exchange Agent shall reasonably request: (x) the
holder of such Certificate shall be entitled to receive promptly in exchange
therefor a certificate representing the shares of Unison Common Stock described
in Section
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3.2(a) hereof (rounded down to the nearest whole share) and a cash payment for
fractional shares calculated on the basis of the Average Closing Price; and (y)
Unison and LABCO shall cause the Exchange Agent to prepare and deliver to the
Escrow Agent, in the name of the Escrow Agent, a certificate or certificates
representing the Reserve Shares (rounded down to the nearest whole share). The
Certificates so surrendered shall forthwith be canceled. From and after the
Effective Time, Unison shall be entitled to treat such Certificates for Shares
which have not yet been surrendered for exchange as evidencing the ownership of
that number of shares of Unison Common Stock into which the Shares represented
by such Certificates shall have been converted, notwithstanding any failure to
surrender such certificates.
(c) Until surrendered as contemplated by this Section 3.4,
each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender such shares of Unison
Common Stock and cash payment for fractional shares as provided in this Section
3.
(d) If any certificate for shares of Unison Common Stock is to
be issued in a name other than that in which the Certificate for Shares
surrendered therefor is registered, it shall be a condition of such issuance
that the person requesting such issuance shall pay any transfer or other tax
required by the reason of the issuance of such shares of Unison common stock in
a name other than that of the registered holder of the Certificate surrendered,
or shall establish to the satisfaction of Unison or the Exchange Agent that such
tax has been paid or is not applicable.
(e) Neither Unison, LABCO nor the Company shall be liable to
the holder of Shares for any shares of Unison Common Stock delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
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SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Unison and LABCO as follows:
Section 4.1 Organization and Good Standing;
Capitalization; Agreements Regarding Capital
Stock.
(a) Schedule 4.1(a) hereto contains a complete and accurate
list for each Acquired Company of its name, its jurisdiction of incorporation,
each other jurisdiction in which it is authorized to do business, and its
capitalization (including the number of shares of each class authorized and
outstanding, the identity of each stockholder and each Person who has any right
to acquire capital stock from such Acquired Company and the number of shares of
each class of stock held by each Person or which such Person has the right to
acquire from such Acquired Company, all on an actual basis and fully-diluted
basis as of the Effective Time). Each Acquired Company is a corporation duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to
conduct its business as it is now being conducted, to own or use the properties
and assets that it purports to own or use, and to perform all its obligations
under Applicable Contracts. Each Acquired Company is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by it,
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the assets, financial condition or results
of operations of such Acquired Company.
(b) Attached as Schedule 4.1(b) are true and correct copies of
the Organizational Documents of each Acquired Company, as currently in effect.
(c) Set forth on Schedule 4.1(c) is a true and correct
description of all agreements, rights or other Contracts pursuant to which any
Person has the right to: (i) acquire from any Acquired Company, by purchase,
exercise, exchange, conversion or otherwise, any equity or other security of any
Acquired Company or the right to acquire any such security; (ii) cause any
Acquired Company to register, under the Securities Act or otherwise, any
securities of any Acquired Company; or (iii) vote or direct the voting of any
class of capital stock of any Acquired Company or appoint any member of any
Acquired Company's board of directors.
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Section 4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of the Company, enforceable against the Company in accordance with
its terms. The Company has the absolute and unrestricted right, power, authority
and capacity to execute and deliver this Agreement and to perform its
obligations hereunder.
(b) Except as set forth on Schedule 4.2(b), neither the execution
and delivery of this Agreement nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of the Organizational Documents of the Acquired Companies, or
(B) any resolution adopted by the board of directors or the stockholders of any
Acquired Company;
(ii) to Company's knowledge, contravene, conflict with, or
result in a violation of, or give any Governmental Body or other Person the
right to challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under, any Legal Requirement or any Order to which
any Acquired Company, or any of the assets owned or used by any Acquired
Company, may be subject;
(iii) to Company's knowledge, contravene, conflict with, or
result in a violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or
modify, any Governmental Authorization that is held by any Acquired Company or
that otherwise relates to the business of, or any of the assets owned or used
by, any Acquired Company;
(iv) to Company's knowledge, cause any Acquired Company to
become subject to, or to become liable for the payment of, any Tax;
(v) except as set forth on Schedule 4.2(b)(v), contravene,
conflict with, or result in a violation or breach of any provision of, or give
any Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any Applicable Contract to the extent any of the foregoing would have a material
adverse effect on the financial condition of the Acquired Companies or the
Acquired Companies' business operations; or
(vi) to Company's knowledge, result in the imposition or
creation of any Encumbrance upon or with respect to any of the assets owned or
used by any Acquired Company to the extent any of the foregoing would have a
material adverse effect on
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the financial condition of the Acquired Companies or the Acquired Companies'
business operations.
(c) Other than obtaining the requisite vote of the Shareholders,
no Acquired Company is or will be required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
Section 4.3 Capitalization. The authorized and outstanding equity
securities of the Company are as set forth on Schedule 4.1(a) hereto. All of the
outstanding equity securities of each Subsidiary of the Company are owned of
record and beneficially by the Company, free and clear of all Encumbrances,
except the Encumbrances noted on Schedule 4.1(a). Schedule 4.1(a) also sets
forth whether or not such Encumbrances will be satisfied at or prior to the
Closing. No legend or other reference to any purported Encumbrance appears upon
any certificate representing equity securities of any Acquired Company. All of
the outstanding equity securities of each Acquired Company have been duly
authorized and validly issued and are fully paid and nonassessable, and no such
security was issued in violation of any preemptive right or other right to
subscribe to or purchase any securities of the Company. None of the outstanding
equity securities or other securities of any Acquired Company was issued in
violation of the Securities Act or any other Legal Requirement. No Acquired
Company owns, or has any Contract to acquire, any equity securities or other
securities of any Person (other than Acquired Companies) or any direct or
indirect equity or ownership interest in any other business.
Section 4.4 Financial Statements. The Company has delivered to LABCO:
(a) consolidated balance sheets of the Acquired Companies as at December 31,
1994, and the related consolidated statements of income, changes in
stockholders' equity, and cash flow for each of the prior fiscal years then
ended, together with the report thereon of Ronald H. Ridgers, PC, CPA,
independent certified public accountant; (b) a consolidated balance sheet of the
Acquired Companies as at December 31, 1995 (including the notes thereto, the
"Balance Sheet"), and the related consolidated statements of income, changes in
stockholders' equity, and cash flow for the fiscal year then ended, together
with the report thereon of Ronald H. Ridgers, PC, CPA, independent certified
public accountant, and (c) an unaudited consolidated balance sheet of the
Acquired Companies as at March 31, 1996 (the "Interim Balance Sheet") and the
related unaudited consolidated statements of income, changes in stockholders'
equity, and cash flow for the three months then ended. Such financial statements
(and notes where applicable) fairly present the financial condition and the
results of operations, changes in stockholders' equity, and cash flow of the
Acquired Companies as at the respective dates of and
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for the periods referred to in such financial statements, all in accordance with
GAAP consistently applied throughout the periods involved, subject, in the case
of interim financial statements, to normal recurring year-end adjustments (the
effect of which will not, individually or in the aggregate, be materially
adverse) and the absence of notes (that, if presented, would not differ
materially from those included in the Balance Sheet). No financial statements of
any Person other than the Acquired Companies are required by GAAP to be included
in the consolidated financial statements of the Company.
Section 4.5 Books and Records. Except as set forth on Schedule 4.5
hereto (which disclosure shall not be considered for purposes of calculating the
right to or amount of damages or other amounts to be paid to LABCO under the
Escrow Agreement), the books of account, minute books, stock record books, and
other records of the Acquired Companies, all of which have been made available
to LABCO, are complete and correct and have been maintained in accordance with
sound business practices. The minute books of the Acquired Companies contain
accurate and complete records of all meetings held of, and corporate action
taken by, the stockholders, the Boards of Directors, and committees of the
Boards of Directors of the Acquired Companies, and no meeting of any such
stockholders, Board of Directors, or committee in which material matters have
been acted upon has been held for which minutes have not been prepared and are
not contained in such minute books. At the Closing, all of those books and
records will be in the possession of the Acquired Companies.
Section 4.6 Title to Properties; Encumbrances. Except as set forth on
Schedule 4.6 hereto, the Acquired Companies do not own, directly or indirectly,
any real property. Set forth on Schedule 4.6 hereto is a complete and accurate
list of all real property leases, or other real property interests owned by any
Acquired Company. The Acquired Companies own all the properties and assets
(whether real, personal, or mixed and whether tangible or intangible) that they
purport to own, including all of the properties and assets reflected in the
Balance Sheet and the Interim Balance Sheet (except for assets held under
capitalized leases disclosed on Schedule 4.6 and personal property sold since
the date of the Balance Sheet and the Interim Balance Sheet, as the case may be,
in the Ordinary Course of Business), and all of the properties and assets
purchased or otherwise acquired by the Acquired Companies since the date of the
Balance Sheet (except for personal property acquired and sold since the date of
the Balance Sheet in the Ordinary Course of Business and consistent with past
practice). All material properties and assets reflected in the Balance Sheet and
the Interim Balance Sheet are free and clear of all Encumbrances except (a)
mortgages or security interests shown on the Balance Sheet or the Interim
Balance Sheet as securing specified liabilities or obligations, with respect to
which no default (or event that, with notice or lapse of time or both, would
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constitute a default) exists, (b) mortgages or security interests incurred in
connection with the purchase of property or assets after the date of the Interim
Balance Sheet (such mortgages and security interests being limited to the
property or assets so acquired), with respect to which no default (or event
that, with notice or lapse of time or both, would constitute a default) exists,
and (c) liens for current taxes not yet due.
Section 4.7 Condition and Sufficiency of Assets. Set forth on Schedule
4.7 hereto is a complete and accurate list of all equipment owned or leased by
the Acquired Companies with an acquisition cost of $1,000 or more (the
"Equipment"), showing whether each item is owned or leased. All items of
Equipment are in good operating condition and repair, and are adequate for the
uses to which they are being put, and none of such items is in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or cost. The items of Equipment are sufficient for
the continued conduct of the Acquired Companies' businesses immediately after
the Closing in substantially the same manner as conducted prior to the Closing.
Section 4.8 Accounts Receivable. All accounts receivable of the
Acquired Companies that are reflected on the Balance Sheet or the Interim
Balance Sheet or on the accounting records of the Acquired Companies as of the
Closing Date (collectively, the "Accounts Receivable") represent or will
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. Unless paid prior to the
Closing Date, the Accounts Receivable are or will be as of the Closing Date
collectible net of the respective reserves shown on the Balance Sheet or the
Interim Balance Sheet (which reserves are adequate and calculated consistent
with past practice). Subject to such reserves, each of the Accounts Receivable
either has been or will be collected in an amount which is not less than 95% of
the face amount of the receivable, within 120 days after the day on which it
first becomes due and payable. To the Company's Knowledge, there is no material
contest, claim, or right of set-off under any Contract with any obligor of an
Accounts Receivable relating to the amount or validity of such Accounts
Receivable. Set forth on Schedule 4.8 is a complete and accurate list of all
Accounts Receivable as of the date of the Interim Balance Sheet, which list sets
forth the aging of such Accounts Receivable.
Section 4.9 Prepaid Supplies. Set forth on Schedule 4.9 is a complete
and accurate description of all prepaid supplies of the Acquired Companies with
a book value of $100 or more (the "Prepaid Supplies"). The Prepaid Supplies,
whether or not reflected in the Balance Sheet or the Interim Balance Sheet,
consists of a quality and quantity usable in the Ordinary Course of Business.
The quantities of Prepaid Supplies are not excessive and are reasonable in the
present circumstances of the Acquired Companies.
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Section 4.10 No Undisclosed Liabilities. Except as set forth on
Schedule 4.10, the Acquired Companies have no liabilities or obligations of any
nature (whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved against
in the Balance Sheet or the Interim Balance Sheet and current liabilities
incurred in the Ordinary Course of Business since the date thereof.
Section 4.11 Taxes.
(a) The Acquired Companies have filed or caused to be filed
all income tax and other material Tax Returns that are or were required to be
filed by or with respect to any of them, either separately or as a member of a
group of corporations, pursuant to applicable Legal Requirements. The Company
has delivered to LABCO copies of, and Schedule 4.11 hereto contains a complete
and accurate list of, all such income tax and other material Tax Returns filed
since April 1, 1990. The Acquired Companies have paid all Taxes due in respect
of such tax returns.
(b) No United States federal or state income Tax Return of any
Acquired Company has been audited by the IRS or relevant state tax authorities
and all such Tax Returns are closed by the applicable statute of limitations for
all taxable years through December 31, 1992. No Acquired Company has given or
been requested to give waivers or extensions (or is or would be subject to a
waiver or extension given by any other Person) of any statute of limitations
relating to the payment of Taxes of any Acquired Company or for which any
Acquired Company may be liable.
(c) The charges, accruals, and reserves with respect to Taxes
on the respective books of each Acquired Company are adequate (determined in
accordance with GAAP) and are at least equal to that Acquired Company's
liability for Taxes. To the Company's Knowledge, there exists no proposed tax
assessment against any Acquired Company except as disclosed in the Balance
Sheet. No consent to the application of Section 341(f)(2) of the IRC has been
filed with respect to any property or assets held, acquired, or to be acquired
by any Acquired Company. All Taxes that any Acquired Company is or was required
by Legal Requirements to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the proper Governmental
Body or other Person.
(d) To the Company's Knowledge, all income tax and other
material Tax Returns filed by (or that include on a consolidated basis) any
Acquired Company are true, correct, and complete. There is no tax sharing
agreement that will require any payment by any Acquired Company after the date
of this Agreement. No Acquired Company is, or within the five-year period
preceding the Closing Date has been, an "S" corporation.
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Section 4.12 No Material Adverse Change. Since the date of the Balance
Sheet, there has not been any material adverse change in the business,
operations, properties, prospects, assets, or condition of any Acquired Company,
and no event has occurred or circumstance exists that may result in such a
material adverse change.
Section 4.13 Employee Benefits.
(a) As used in this Section 4.13, the following terms have the
meanings set forth below.
"COMPANY OTHER BENEFIT OBLIGATION" shall mean an Other Benefit
Obligation owed, adopted, or followed by an Acquired Company or an ERISA
Affiliate of an Acquired Company.
"COMPANY PLAN" shall mean all Plans of which an Acquired Company or an
ERISA Affiliate of an Acquired Company is or was a Plan Sponsor, or to which an
Acquired Company or an ERISA Affiliate of an Acquired Company otherwise
contributes or has contributed, or in which an Acquired Company or an ERISA
Affiliate of an Acquired Company otherwise participates or has participated. All
references to Plans are to Company Plans unless the context requires otherwise.
"COMPANY VEBA" shall mean a VEBA whose members include employees of any
Acquired Company or any ERISA Affiliate of an Acquired Company.
"ERISA AFFILIATE" shall mean, with respect to an Acquired Company, any
other person that, together with the Company, would be treated as a single
employer under IRC Section 414.
"MULTI-EMPLOYER PLAN" shall have the meaning set forth in ERISA Section
3(37)(A).
"OTHER BENEFIT OBLIGATIONS" shall mean all obligations, arrangements,
or customary practices, whether or not legally enforceable, to provide benefits,
other than salary, as compensation for services rendered, to present or former
directors, employees, or agents, other than obligations, arrangements, and
practices that are Plans. Other Benefit Obligations include consulting
agreements under which the compensation paid does not depend upon the amount of
service rendered, sabbatical policies, severance payment policies, and fringe
benefits within the meaning of IRC Section 132.
"PENSION PLAN" shall have the meaning set forth in ERISA Section
3(2)(A).
"PLAN" shall have the meaning set forth in ERISA Section 3(3).
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"PLAN SPONSOR" shall have the meaning set forth in ERISA Section
3(16)(B).
"QUALIFIED PLAN" shall mean any Plan that meets or purports to meet the
requirements of IRC Section 401(a).
"TITLE IV PLANS" shall mean all Pension Plans that are subject to Title
IV of ERISA, 29 U.S.C. Section 1301 et seq., other than Multi-Employer Plans.
"VEBA" shall mean a voluntary employees' beneficiary association under
IRC Section 501(c)(9).
"WELFARE PLAN" shall have the meaning set forth in ERISA Section 3(1).
(b) (i) Schedule 4.13(b)(i) contains a complete and accurate list
of all Company Plans, Company Other Benefit Obligations, and Company VEBAs, and
identifies as such all Company Plans that are (A) Qualified Plans or (B) Title
IV Plans. No Acquired Company or ERISA Affiliate participates in or has ever
participated in or had any obligation to contribute to any defined benefit
Pension Plan or Multi-Employer Plan nor does any Acquired Company or ERISA
Affiliate have any liability under Title IV of ERISA or Part 3 of Subtitle B of
Title I of ERISA in connection with any defined benefit Pension Plan or
Multi-Employer Plan.
(ii) Schedule 4.13(b)(ii) contains a complete and accurate
list of (A) all ERISA Affiliates of each Acquired Company, and (B) all Plans of
which any such ERISA Affiliate is or was a Plan Sponsor, in which any such ERISA
Affiliate participates or has participated, or to which any such ERISA Affiliate
contributes or has contributed.
(iii) No Acquired Company is liable for post-retirement
benefits.
(c) The Company has delivered to LABCO:
(i) all documents that set forth the terms of each Company
Plan, Company Other Benefit Obligation, or Company VEBA and of any related
trust, including (A) all plan descriptions and summary plan descriptions of
Company Plans for which the Acquired Companies are required to prepare, file,
and distribute plan descriptions and summary plan descriptions, and (B) all
summaries and descriptions furnished to participants and beneficiaries regarding
Company Plans, Company Other Benefit Obligations and Company VEBAs for which a
plan description or summary plan description is not required;
(ii) all personnel, payroll, and employment manuals and
policies;
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(iii) a written description of any Company Plan or Company
Other Benefit Obligation that is not otherwise in writing;
(iv) all insurance policies purchased by or to provide
benefits under any Company Plan;
(v) all reports submitted within the four years preceding the
date of this Agreement by third party administrators, actuaries, investment
managers, consultants, or other independent contractors with respect to any
Company Plan, Company Other Benefit Obligation, or Company VEBA;
(vi) all notifications to employees of their rights under
ERISA Section 601 et seq. and IRC Section 4980B;
(vii) the Form 5500 filed in each of the most recent three
plan years with respect to each Company Plan, including all schedules thereto
and the opinions of independent accountants;
(viii) all notices that were given by the IRS, the Pension
Benefit Guaranty Corporation (the "PBGC"), or the Department of Labor to any
Acquired Company, any ERISA Affiliate of an Acquired Company, or any Company
Plan within the four years preceding the date of this Agreement; and
(ix) with respect to Qualified Plans and VEBAs, the most
recent determination letter for each Plan of the Acquired Companies that is a
Qualified Plan.
(d) Except as set forth on Schedule 4.13(d):
(i) The Acquired Companies have performed in all material
respects all of their respective obligations under all Company Plans, Company
Other Benefit Obligations and Company VEBAs. The Acquired Companies have made
appropriate entries in their financial records and statements for all
obligations and liabilities under such Plans, VEBAs and Obligations that have
accrued but are not due.
(ii) To the knowledge of the Acquired Companies, no
statement, either written or oral, has been made by any Acquired Company to any
Person with regard to any Plan or Other Benefit Obligation that was not in
accordance with the Plan or Other Benefit Obligation and that could have a
material adverse economic consequence to any Acquired Company or to LABCO.
(iii) The Acquired Companies, with respect to all Company
Plans, Company Other Benefits Obligations, and Company VEBAs, are, and each
Company Plan, Company Other Benefit Obligation, and Company VEBA is, in
compliance in all material respects with ERISA, the IRC, and other applicable
Laws including the provisions of such Laws expressly mentioned in this Section
4.13.
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(A) No non-exempt transaction prohibited by
ERISA Section 406 and no non-exempt "prohibited transaction" under IRC Section
4975(c) have occurred with respect to any Company Plan.
(B) To the knowledge of the Acquired
Companies, no Acquired Company has any liability to the IRS with respect to any
Plan, including any liability imposed by Chapter 43 of the IRC.
(C) To the knowledge of the Acquired
Companies, no Acquired Company has any liability to the PBGC with respect to any
Plan or has any liability under ERISA Section 502 or Section 4071.
(D) All filings required by ERISA and the
IRC as to each Plan have been timely filed, and all notices and disclosures to
participants required by either ERISA or the IRC have been timely provided.
(E) All contributions and payments made or
accrued with respect to all Company Plans, Company Other Benefit Obligations and
Company VEBAs are deductible under IRC Section 162 or Section 404. No amount, or
any asset of any Company Plan or Company VEBA, is subject to tax as unrelated
business taxable income.
(iv) Each Company Plan can be terminated without payment of
any additional contribution or amount and without the vesting or acceleration of
any benefits promised by such Plan.
(v) Since January 1, 1996, there has been no establishment or
amendment of any Company Plan, Company VEBA or Company Other Benefit Obligation.
(vi) To the knowledge of the Acquired Companies, no event has
occurred or circumstance exists that could result in a material increase in
premium costs of Company Plans and Company Other Benefit Obligations that are
insured, or a material increase in benefit costs of such Plans and Obligations
that are self-insured.
(vii) Other than claims for benefits submitted by
participants or beneficiaries, no claim against, or legal proceeding involving,
any Company Plan, Company Other Benefit Obligation or Company VEBA or fiduciary
of the same is pending or, to the Knowledge of the Acquired Companies, is
Threatened.
(viii) No Company Plan is a stock bonus, pension, or
profit-sharing plan within the meaning of IRC Section 401(a).
(ix) To the knowledge of the Acquired Companies: (A) each
Qualified Plan of each Acquired Company is qualified in form and operation under
IRC Section 401(a); each trust for each such Plan is
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exempt from federal income tax under IRC Section 501(a); and (B) no event has
occurred or circumstance exists that will or could give rise to disqualification
or loss of tax-exempt status of any such Plan or trust.
(x) Each Acquired Company and each ERISA Affiliate of an
Acquired Company has met the minimum funding standard, and has made all
contributions required, under ERISA Section 302 and IRC Section 412.
(xi) No Company Plan is subject to Title IV of ERISA.
(xii) Except to the extent required under ERISA Section 601
et seq. and IRC Section 4980B and applicable state law, no Acquired Company
provides health or welfare benefits for any retired or former employee or is
obligated to provide health or welfare benefits to any active employee following
such employee's retirement or other termination of service.
(xiii) To the extent any Acquired Company provides any
benefit to retirees, such Acquired Company has the right to modify and terminate
benefits to retirees (other than pensions) with respect to both retired and
active employees.
(xiv) All Acquired Companies have complied with the
provisions of ERISA Section 601 et seq. and IRC Section 4980B in all material
respects.
(xv) No payment that is owed or may become due to any
director, officer, employee, or agent of any Acquired Company will be
non-deductible to the Acquired Companies or subject to tax under IRC Section
280G or Section 4999; nor will any Acquired Company be required to "gross up" or
otherwise compensate any such person because of the imposition of any excise tax
on a payment to such person.
(xvi) The consummation of the Contemplated Transactions will
not: (i) give rise to any liability or obligation of any Acquired Company
pursuant to any Company Plan; (ii) accelerate the time of payment or vesting, or
increase the amount of compensation due under any Company Plan; (ii) cause any
individual to accrue or receive additional benefits, service or accelerated
rights to payment of benefits under any Company Plan; or (iv) directly or
indirectly cause the Company or any ERISA Affiliate to transfer or set aside any
assets to fund or otherwise provide for benefit for any individual.
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Section 4.14 Compliance with Legal Requirements;
Governmental Authorizations.
(a) Except as set forth on Schedule 4.14(a):
(i) to Company's Knowledge, each Acquired Company is, and at
all times since December 31, 1994 has been, in compliance in all material
respects with each Legal Requirement that is or was applicable to it or to the
conduct or operation of its business or the ownership or use of any of its
assets;
(ii) to Company's Knowledge, no event has occurred or
circumstance exists that (with or without notice or lapse of time) (A) may
constitute or result in a violation by any Acquired Company of, or a failure on
the part of any Acquired Company to comply in all material respects with, any
Legal Requirement, or (B) may give rise to any obligation on the part of any
Acquired Company to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature; and
(iii) no Acquired Company has received, at any time since
December 31, 1994, any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding (A) any actual or
alleged violation of, or failure to comply with, any Legal Requirement, or (B)
any actual or alleged obligation on the part of any Acquired Company to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature.
(b) Schedule 4.14(b) contains a complete and accurate list of each
Governmental Authorization that is held by any Acquired Company or that
otherwise relates to the business of, or to any of the assets owned or used by,
any Acquired Company. Each Governmental Authorization listed or required to be
listed in Schedule 4.14(b) is, to Company's Knowledge, valid and in full force
and effect, and such Governmental Authorizations collectively constitute all of
the Governmental Authorizations necessary to permit the Acquired Companies to
lawfully conduct and operate their businesses in the manner they currently
conduct and operate such businesses and to permit the Acquired Companies to own
and use their assets in the manner in which they currently own and use such
assets.
Section 4.15 Legal Proceedings; Orders.
(a) There is no pending Proceeding that has been commenced by or
against any Acquired Company or that otherwise relates to or may affect the
business of, or any of the assets owned or used by, any Acquired Company or that
challenges, or that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the Contemplated Transactions. To the
Knowledge of the Acquired Companies, except as set forth on
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Schedule 4.15, (1) no such Proceeding has been Threatened, and (2) the Company
has no Knowledge of any event that has occurred or circumstance that exists that
may give rise to or serve as a basis for the commencement of any such
Proceeding. The Company has delivered to LABCO copies of all pleadings,
correspondence, and other documents relating to each Proceeding listed on
Schedule 4.15. The Proceedings listed on Schedule 4.15 will not have a material
adverse effect on the business, operations, assets, condition, or prospects of
any Acquired Company.
(b) There is no Order to which any of the Acquired Companies, or
any of the assets owned or used by any Acquired Company, is subject and no
officer, director, agent, or employee of any Acquired Company is subject to any
Order that prohibits such officer, director, agent, or employee from engaging in
or continuing any conduct, activity, or practice relating to the business of any
Acquired Company.
Section 4.16 Absence of Certain Changes and Events. Except as set forth
on Schedule 4.16, since the date of the Interim Balance Sheet, the Acquired
Companies have conducted their businesses only in the Ordinary Course of
Business and there has not been any:
(a) change in any Acquired Company's authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital stock of
any Acquired Company; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption, retirement, or
other acquisition by any Acquired Company of any shares of any such capital
stock; or declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of any Acquired
Company;
(c) payment by any Acquired Company of any bonuses, or increase by
any Acquired Company in salaries or other compensation to any employee, or entry
into any employment, severance, or similar Contract with any director, officer,
or employee;
(d) adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or with any employees of any
Acquired Company;
(e) damage to or destruction or loss of any asset or property of
any Acquired Company, whether or not covered by insurance, materially and
adversely affecting the properties, assets, business, financial condition, or
prospects of the Acquired Companies, taken as a whole;
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(f) entry into, termination of, or receipt of notice of
termination of any license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement, or any Contract or transaction involving
a total remaining commitment by or to any Acquired Company of at least $50,000;
(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of any Acquired
Company or mortgage, pledge, or imposition of any lien or other encumbrance on
any material asset or property of any Acquired Company, including the sale,
lease, or other disposition of any of the Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a value to
any Acquired Company in excess of $50,000;
(i) material change in the accounting methods used by any Acquired
Company; or
(j) agreement, whether oral or written, by any Acquired Company to
do any of the foregoing.
Section 4.17 Contracts; No Defaults.
(a) Schedule 4.17(a) contains a complete and accurate list, and
the Company has delivered to LABCO true and complete copies, of:
(i) each Applicable Contract that involves performance of
services or delivery of goods or materials by one or more Acquired Companies of
an amount or value in excess of $50,000, including and, in the case of any
service contract entered into by any Acquired Company, setting forth the
following information: name and location of institution; circumstances under
which such contract may be terminated; term of contract; and annual service
charge;
(ii) each Applicable Contract that involves performance of
services or delivery of goods or materials to one or more Acquired Companies of
an amount or value in excess of $50,000;
(iii) each Applicable Contract that was not entered into in
the Ordinary Course of Business and that involves expenditures or receipts of
one or more Acquired Companies in excess of $50,000;
(iv) each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other Applicable Contract
affecting the ownership of, leasing of, title to, use of, or any leasehold or
other interest in, any real or personal property (except personal property
leases and installment and conditional sales agreements having a value per item
or
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aggregate payments of less than $25,000 and with terms of less than one year);
(v) each licensing agreement or other Applicable Contract
with respect to patents, trademarks, copyrights, or other intellectual property,
including agreements with current or former employees, consultants, or
contractors regarding the appropriation or the non-disclosure of any of the
Intellectual Property Assets;
(vi) each joint venture, partnership, and other Applicable
Contract (however named) involving a sharing of profits, losses, costs, or
liabilities by any Acquired Company with any other Person;
(vii) each Applicable Contract containing covenants that in
any way purport to restrict the business activity of any Acquired Company or any
Affiliate of an Acquired Company or limit the freedom of any Acquired Company or
any Affiliate of an Acquired Company to engage in any line of business or to
compete with any Person;
(viii) each Applicable Contract providing for payments to or
by any Person based on sales, purchases, or profits, other than direct payments
for goods;
(ix) each power of attorney that is currently effective and
outstanding;
(x) each Applicable Contract entered into other than in the
Ordinary Course of Business that contains or provides for an express undertaking
by any Acquired Company to be responsible for consequential damages;
(xi) each Applicable Contract for capital expenditures in
excess of $50,000;
(xii) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by any Acquired
Company other than in the Ordinary Course of Business; and
(xiii) each amendment, supplement, and modification (whether
oral or written) in respect of any of the foregoing.
(b) Except as set forth on Schedule 4.17(b), to the Company's
Knowledge, no officer, director, agent, employee, consultant, or contractor of
any Acquired Company is bound by any Contract that purports to limit the ability
of such officer, director, agent, employee, consultant, or contractor to (A)
engage in or continue any conduct, activity, or practice relating to the
business of any Acquired Company, or (B) assign to any Acquired
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Company or to any other Person any rights to any invention, improvement, or
discovery.
(c) Each Contract identified or required to be identified on
Schedule 4.17(a) is in full force and effect and to Company's knowledge is valid
and enforceable in accordance with its terms. Except as set forth on Schedule
4.17(c) hereto:
(i) Each Acquired Company is, and at all times since December
31, 1994 has been, in compliance in all material respects with all applicable
terms and requirements of each Contract under which such Acquired Company has or
had any obligation or liability or by which such Acquired Company or any of the
assets owned or used by such Acquired Company is or was bound;
(ii) each other Person that has or had any obligation or
liability under any Contract under which an Acquired Company has or had any
rights is, and at all times since December 31, 1994 has been, in compliance in
all material respects with all applicable terms and requirements of such
Contract;
(iii) to the Company's Knowledge, no event has occurred or
circumstance exists that (with or without notice or lapse of time) may
contravene, conflict with, or result in a violation or breach of, or give any
Acquired Company or other Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Applicable Contract; and
(iv) no Acquired Company has given to or received from any
other Person, at any time since December 31, 1994, any notice or other
communication (whether oral or written) regarding any actual or alleged
violation or breach of, or default under, any Applicable Contract.
(d) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to any
Acquired Company under current or completed Contracts with any Person other than
in the Company's Ordinary Course of Business and, to the Knowledge of the
Acquired Companies, no such Person has made written demand for such
renegotiation.
(e) The Contracts relating to the sale, design, manufacture, or
provision of products or services by the Acquired Companies have been entered
into in the Ordinary Course of Business and have been entered into without the
commission of any act alone or in concert with any other Person, or any
consideration having been paid or promised, that is or would be in violation of
any Legal Requirement.
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(f) Except as set forth on Schedule 4.17(f), none of the
Acquired Companies has any agreement, Contract or understanding, written or
oral, with any Person obligating any Acquired Company to proceed with any
acquisition or to take any other action. Any agreement, Contract or
understanding set forth on Schedule 4.17(f) may be terminated by the Acquired
Company without penalty or cost to the Acquired Company.
Section 4.18 Insurance.
(a) The Company has delivered to LABCO:
(i) true and complete copies of all policies of insurance
to which any Acquired Company is a party or under which any Acquired Company, or
any director of any Acquired Company in such director's capacity as a director
of such Acquired Company, is or has been covered at any time within the three
years preceding the date of this Agreement;
(ii) true and complete copies of all pending applications
for policies of insurance; and
(iii) any statement by the auditor of any Acquired
Company's financial statements with regard to the adequacy of such entity's
coverage or of the reserves for claims.
(b) Schedule 4.18(b) hereto describes:
(i) any self-insurance arrangement by or affecting any
Acquired Company, including any reserves established thereunder;
(ii) any contract or arrangement, other than a policy of
insurance, for the transfer or sharing of any risk by any Acquired Company; and
(iii) all obligations of the Acquired Companies under
Applicable Contracts to third parties with respect to insurance (including such
obligations under leases and service agreements) and identifies the policy under
which such coverage is provided.
(c) Schedule 4.18(c) hereto sets forth, by year, for the
current policy year and each of the two preceding policy years:
(i) a summary of the loss experience under each policy for
liability, property or casualty insurance;
(ii) a statement describing each claim under an insurance
policy for an amount in excess of $25,000, which sets forth:
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(A) the name of the claimant;
(B) a description of the policy by insurer,
type of insurance, and period of coverage; and
(C) the amount and a brief description of
the claim; and
(iii) a statement describing the loss experience for
all claims that were self-insured, including the number and aggregate cost of
such claims.
(d) Except as set forth on Schedule 4.18(d) hereto:
(i) All policies to which any Acquired Company is a
party or that provide coverage to any Acquired Company, or any director or
officer of an Acquired Company:
(A) to Company's Knowledge, are valid,
outstanding, and enforceable;
(B) to Company's Knowledge, are issued by an
insurer that is financially sound and reputable;
(C) taken together, provide adequate
insurance coverage for the assets and the operations of the Acquired Companies
for all risks normally insured against by a Person carrying on the same business
or businesses as the Acquired Companies;
(D) are sufficient for compliance with all
Legal Requirements (to the Company's Knowledge) and Contracts to which any
Acquired Company is a party or by which any of them is bound;
(E) will not be terminated as a result of
the consummation of the Contemplated Transactions; and
(F) do not provide for any retrospective
premium adjustment or other experienced-based liability on the part of any
Acquired Company, exclusive of audit adjustments for workers compensation
coverage.
(ii) No Acquired Company has received (A) any refusal
of coverage or any notice that a defense will be afforded with reservation of
rights, or (B) any notice of cancellation or any other indication that any
insurance policy is no longer in full force or effect or will not be renewed or
that the issuer of any policy is not willing or able to perform its obligations
thereunder.
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(iii) The Acquired Companies have paid all premiums
due, and have otherwise performed all of their respective obligations, under
each policy to which any Acquired Company is a party or that provides coverage
to any Acquired Company or director thereof.
(iv) The Acquired Companies have given notice to the
insurer of all claims that may be insured thereby.
Section 4.19 Environmental Matters. Except as set forth on Schedule
4.19(d) hereto:
(a) To the Knowledge of the Acquired Companies, each Acquired
Company is, and at all times has been, in full compliance with, and has not been
and is not in violation of or liable under, any Environmental Law. No Acquired
Company has any basis to expect, nor has any of them or any other Person for
whose conduct they are or may be held to be responsible received, any actual or
Threatened order, notice, or other communication from (i) any Governmental Body
or private citizen acting in the public interest, or (ii) the current or prior
owner or operator of any Facilities, of any actual or potential violation or
failure to comply with any Environmental Law, or of any actual or Threatened
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets (whether real, personal, or mixed) in which any Acquired Company has
had an interest, or with respect to any property or Facility at or to which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used, or processed by any Acquired Company, or any other Person for
whose conduct they are or may be held responsible, or from which Hazardous
Materials have been transported, treated, stored, handled, transferred,
disposed, recycled, or received.
(b) There are no pending or, to the Knowledge of the Acquired
Companies, Threatened claims, Encumbrances or other restrictions of any nature
resulting from any Environmental, Health, and Safety Liabilities or arising
under or pursuant to any Environmental Law, with respect to or affecting any of
the Facilities or any other properties and assets (whether real, personal, or
mixed) in which any Acquired Company has or had an interest.
(c) No Acquired Company has any basis to expect, nor has any
of them or any other Person for whose conduct they are or may be held
responsible, received, any citation, directive, inquiry, notice, Order, summons,
warning, or other communication that relates to Hazardous Activity, Hazardous
Materials, or any alleged, actual, or potential violation or failure to comply
with any Environmental Law, or of any alleged, actual, or potential obligation
to undertake or bear the cost of any Environmental, Health, and Safety
Liabilities with respect to any of the
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Facilities or any other properties or assets (whether real, personal, or mixed)
in which any Acquired Company had an interest, or with respect to any property
or facility to which Hazardous Materials generated, manufactured, refined,
transferred, imported, used, or processed by any Acquired Company, or any other
Person for whose conduct they are or may be held responsible, have been
transported, treated, stored, handled, transferred, disposed, recycled, or
received.
(d) To the Knowledge of the Acquired Companies, no Acquired
Company, or any other Person for whose conduct they are or may be held
responsible, has any Environmental, Health, and Safety Liabilities with respect
to the Facilities or with respect to any other properties and assets (whether
real, personal, or mixed) in which any Acquired Company (or any predecessor) has
or had an interest, or at any property geologically or hydrologically adjoining
the Facilities or any such other property or assets.
(e) There are no Hazardous Materials present on or in the
Environment at the Facilities or, to the Knowledge of the Acquired Companies, at
any geologically or hydrologically adjoining property, including any Hazardous
Materials contained in barrels, above or underground storage tanks, landfills,
land deposits, dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land, water, sumps,
or any other part of the Facilities or such adjoining property, or incorporated
into any structure therein or thereon. To the Knowledge of the Acquired
Companies, no Acquired Company, any other Person for whose conduct they are or
may be held responsible, or any other Person, has permitted or conducted, or is
aware of, any Hazardous Activity conducted with respect to the Facilities or any
other properties or assets (whether real, personal, or mixed) in which any
Acquired Company has or had an interest except in full compliance with all
applicable Environmental Laws.
(f) To the Knowledge of the Acquired Companies, there has been
no Release or, to the Knowledge of the Acquired Companies, Threat of Release, of
any Hazardous Materials at or from the Facilities or at any other locations
where any Hazardous Materials were generated, manufactured, refined,
transferred, produced, imported, used, or processed from or by the Facilities,
or from or by any other properties and assets (whether real, personal, or mixed)
in which any Acquired Company has or had an interest, or any geologically or
hydrologically adjoining property, whether by any Acquired Company, or any other
Person.
(g) The Company has delivered to LABCO true and complete
copies and results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by any Acquired Company pertaining to Hazardous Materials
or Hazardous Activities in, on, or under the Facilities, or concerning
compliance by any Acquired
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Company, or any other Person for whose conduct they are or may be held
responsible, with Environmental Laws.
Section 4.20 Employees.
(a) Except as set forth on Schedule 4.20, there has been
provided to LABCO a complete and accurate list of the following information for
each employee or director of the Acquired Companies, including each employee on
leave of absence or layoff status: employer; name; job title; current
compensation paid or payable and any change in compensation since December 31,
1995; vacation accrued; and service credited for purposes of vesting and
eligibility to participate under any Acquired Company's pension, retirement,
profit-sharing, thrift-savings, deferred compensation, stock bonus, stock
option, cash bonus, employee stock ownership (including investment credit or
payroll stock ownership), severance pay, insurance, medical, welfare, or
vacation plan, other Employee Pension Benefit Plan or Employee Welfare Benefit
Plan, or any other employee benefit plan or any Director Plan.
(b) Except as set forth on Schedule 4.17(a), no employee or
director of any Acquired Company is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such employee or director and any other
Person ("Proprietary Rights Agreement") that in any way adversely affects or
will affect (i) the performance of his duties as an employee or director of the
Acquired Companies, or (ii) the ability of any Acquired Company to conduct its
business, including any Proprietary Rights Agreement with the Acquired Companies
by any such employee or director. To the Acquired Companies' Knowledge, no
officer or other key employee of any Acquired Company intends to terminate his
employment with such Acquired Company.
(c) There has been provided to LABCO a complete and accurate
list of the following information for each retired employee or director of the
Acquired Companies, or their dependents, receiving benefits or scheduled to
receive benefits in the future: name, pension benefit, pension option election,
retiree medical insurance coverage, retiree life insurance coverage, and other
benefits.
Section 4.21 Labor Relations; Compliance. No Acquired Company has been
or is a party to any collective bargaining or other labor Contract. There has
not been, there is not presently pending or existing, and there is not
Threatened, (a) any strike, slowdown, picketing, work stoppage, or employee
grievance process, (b) any Proceeding against or affecting any Acquired Company
relating to the alleged violation of any Legal Requirement pertaining to labor
relations or employment matters, including any charge or complaint filed by an
employee or union with the National Labor Relations Board, the Equal Employment
Opportunity Commission,
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or any comparable Governmental Body, organizational activity, or other labor or
employment dispute against or affecting any of the Acquired Companies or their
premises, or (c) any application for certification of a collective bargaining
agent. No event has occurred or circumstance exists that could provide the basis
for any work stoppage or other labor dispute. There is no lockout of any
employees by any Acquired Company, and no such action is contemplated by any
Acquired Company. Each Acquired Company has complied in all material respects
with all Legal Requirements relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar taxes, occupational
safety and health, and plant closing. No Acquired Company is liable for the
payment of any compensation, damages, taxes, fines, penalties, or other amounts,
however designated, for failure to comply with any of the foregoing Legal
Requirements.
Section 4.22 Intellectual Property.
(a) The term "Intellectual Property Assets" includes the
following to the extent owned, used or licensed by any Acquired Company as
licensee or licensor:
(i) the name, "American Professional Holding, Inc.,"
all fictional business names, trading names, registered and unregistered
trademarks, service marks, and applications (collectively, "Marks");
(ii) all patents, patent applications, and inventions
and discoveries that may be patentable (collectively, "Patents");
(iii) all copyrights in both published works and
unpublished works (collectively, "Copyrights");
(iv) all rights in mask works, if any, (collectively,
"Rights in Mask Works"); and
(v) all know-how, trade secrets, confidential
information, customer lists, software, technical information, data, process
technology, plans, drawings, and blue prints (collectively, "Trade Secrets").
(b) Agreements. Schedule 4.22(b) hereto contains a complete
and accurate list and summary description, including any royalties paid or
received by the Acquired Companies, of all Contracts relating to the
Intellectual Property Assets to which any Acquired Company is a party or by
which any Acquired Company is bound, except for any license implied by the sale
of a product and perpetual, paid-up licenses for commonly available software
programs with a value of less than $10,000 under which an Acquired Company is
the licensee. There are no outstanding and, to Acquired
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Company's Knowledge, no Threatened disputes or disagreements with respect to any
such agreement.
(c) Know-How Necessary for the Business
(i) The Intellectual Property Assets are all those
necessary for the operation of the Acquired Companies' businesses as they are
currently conducted. Except as described on Schedule 4.22(c)(i) hereto, one or
more of the Acquired Companies is the owner of all right, title, and interest in
and to each of the Intellectual Property Assets, free and clear of all liens,
security interests, charges, encumbrances, equities, and other adverse claims,
and has the right to use without payment to a third party all of the
Intellectual Property Assets.
(ii) Schedule 4.22(c)(ii) sets forth all current
employees of the Acquired Companies who have executed a confidentiality
agreement with such Acquired Company, copies of the forms of which are attached
to such Schedule.
(d) Trademarks
(i) Schedule 4.22(d) hereto contains a complete and
accurate list and summary description of all Marks. One or more of the Acquired
Companies is the owner of all right, title, and interest in and to each of the
Marks, free and clear of all liens, security interests, charges, encumbrances,
equities, and other adverse claims.
(ii) All Marks that have been registered with the
United States Patent and Trademark Office are currently in compliance with all
formal legal requirements (including the timely post-registration filing of
affidavits of use and incontestability and renewal applications), are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within ninety days after the Closing Date.
(iii) No Mark has been or is now involved in any
opposition, invalidation, or cancellation and, to Acquired Company's Knowledge,
no such action is Threatened with the respect to any of the Marks.
(iv) To Acquired Company's Knowledge, there is no
potentially interfering trademark or trademark application of any third party.
(v) No Mark is infringed or, to Acquired Company's
Knowledge, has been challenged or threatened in any way. None of the Marks used
by any Acquired Company infringes or is alleged to infringe any trade name,
trademark, or service mark of any third party.
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(vi) All products and materials containing a Mark
bear the proper federal registration notice where permitted by law.
(e) Trade Secrets
(i) With respect to each Trade Secret, the
documentation relating to such Trade Secret is current, accurate, and sufficient
in detail and content to conduct the business operations of the Acquired
Companies as presently conducted.
(ii) The Acquired Companies have taken reasonable
precautions to protect the secrecy, confidentiality, and value of their Trade
Secrets.
(iii) One or more of the Acquired Companies has good
title and an absolute (but not necessarily exclusive) right to use the Trade
Secrets. To the Knowledge of the Acquired Companies, the Trade Secrets have not
been used, divulged, or appropriated either for the benefit of any Person (other
than one or more of the Acquired Companies) or to the detriment of the Acquired
Companies. No Trade Secret is subject to any adverse claim or has been
challenged or threatened in any way.
Section 4.23 Certain Payments. No Acquired Company or director,
officer, agent, or employee of any Acquired Company, or to the Knowledge of the
Acquired Companies any other Person associated with or acting for or on behalf
of any Acquired Company, has directly or indirectly (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or other payment to
any Person, private or public, regardless of form, whether in money, property,
or services (i) to obtain favorable treatment in securing business, (ii) to pay
for favorable treatment for business secured or (iii) to obtain special
concessions or for special concessions already obtained, for or in respect of
any Acquired Company or any Affiliate of an Acquired Company, in each case in
violation of any Legal Requirement, or (b) established or maintained any fund or
asset that has not been recorded in the books and records of the Acquired
Companies.
Section 4.24 Disclosure.
(a) No representation or warranty of the Company in this
Agreement omits to state a material fact necessary to make the statements herein
or therein, in light of the circumstances in which they were made, not
misleading.
(b) No notice given pursuant to Section 6.10 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading.
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(c) Any material distributed to the Shareholders in connection
with the Merger, including the Merger Information Statement (and any amendments
or supplements thereto) will comply in all material respects with applicable
federal securities laws and laws of Utah and at the time that they or amendments
or supplements thereto, are filed with the SEC and are first published or sent
or given to holders of Shares, will not 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 made therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Unison or LABCO for inclusion in the Merger Information Statement.
Section 4.25 Relationships with Related Persons. Except as set forth on
Schedule 4.25, no Shareholder or any Related Person of any Shareholder or of any
Acquired Company has, or since December 31, 1994, has had, any interest in any
property (whether real, personal, or mixed and whether tangible or intangible),
used in or pertaining to the Acquired Companies' businesses. No Shareholder or
any Related Person of Shareholder or of any Acquired Company is, or since
December 31, 1994 has owned (of record or as a beneficial owner) an equity
interest or any other financial or profit interest in, a Person that has (i) had
business dealings or a material financial interest in any transaction with any
Acquired Company or (ii) engaged in competition with any Acquired Company with
respect to any line of the products or services of such Acquired Company (a
"Competing Business") in any market presently served by such Acquired Company
except for less than one percent of the outstanding capital stock of any
Competing Business that is publicly traded on any recognized exchange or in the
over-the-counter market. Except as set forth on Schedule 4.25, no Shareholder
or any Related Person of Shareholder or of any Acquired Company is a party to
any Contract with, or has any claim or right against, any Acquired Company.
Section 4.26 Accounting Matters. None of the Acquired Companies has
taken or agreed to take any action or has knowledge of any fact or circumstances
relating to the Acquired Companies that would prevent accounting for the Merger
as a pooling-of-interests.
Section 4.27 Brokers or Finders. None of the Shareholders, the Acquired
Companies or their agents have incurred any obligation or liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement or the Contemplated
Transactions.
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SECTION 5 REPRESENTATIONS AND WARRANTIES OF UNISON AND LABCO
Each of Unison and LABCO, as applicable, represent and warrant to the
Company as follows:
Section 5.1 Organization and Good Standing. Each of Unison and LABCO is
a corporation duly organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation, with full corporate power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use and to perform all of
its obligations as required by its agreements and contracts. Each of Unison and
LABCO is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on its
assets, financial condition or results of operations.
Section 5.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Unison and LABCO, enforceable against each of them in accordance
with its terms. Upon the execution and delivery by Unison and LABCO of the
Escrow Agreement, the Employment Agreements and the Unison/LABCO Tax
Representation Letter (collectively, "LABCO's Closing Documents"), LABCO's
Closing Documents will constitute legal, valid, and binding obligations of each
of Unison and LABCO, enforceable against them in accordance with their
respective terms. Each of Unison and LABCO has the absolute and unrestricted
right, power, and authority to execute and deliver this Agreement and, as
applicable, LABCO's Closing Documents and to perform its obligations under this
Agreement and, as applicable, LABCO's Closing Documents.
(b) Neither the execution and delivery of this Agreement or
LABCO's Closing Documents by Unison or LABCO nor the consummation or performance
of any of the Contemplated Transactions by Unison or LABCO will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents of Unison or
LABCO, as applicable, or (B) any resolution adopted by the board of directors or
the stockholders of Unison or LABCO, as applicable;
(ii) to either Unison's or LABCO's knowledge,
contravene, conflict with, or result in a violation of, or give any Governmental
Body or other Person the right to challenge any of the Contemplated Transactions
or to exercise any remedy or obtain any
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relief under, any Legal Requirement or any Order to which Unison or LABCO, or
any of the assets owned or used by Unison or LABCO, may be subject; or
(iii) give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated Transactions.
(c) Neither Unison nor LABCO is nor will be required to obtain
any Consent from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the Contemplated
Transactions.
Section 5.3 Certain Proceedings. There is no pending Proceeding that
has been commenced against Unison or LABCO and that challenges, or may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions. To neither of Unison's or LABCO's
Knowledge, no such Proceeding has been Threatened.
Section 5.4 SEC Documents; Financial Statements.
(a) Unison filed a registration statement on Form S-1 with the
SEC, which registration statement was declared effective by the SEC on December
18, 1995. At December 18, 1995, such registration statement did not 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 made therein, in
light of the circumstances under which they were made, not misleading. Since
December 19, 1995 Unison has filed all forms, reports and documents required to
be filed by it with the SEC pursuant to the Exchange Act and the SEC rules and
regulations thereunder, all of which as of their respective dates complied in
all material respects with all applicable requirements of the Exchange Act
(collectively, the "Unison SEC Documents"). None of the Unison SEC Documents,
including, without limitation, any financial statements or schedules included
therein, as of their respective dates contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The consolidated balance sheets and the related statements
of consolidated income, shareholders equity and cash flows (including the
related notes thereto) of Unison included in the Unison SEC Documents complied
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with prior periods (except as otherwise noted therein), and
present fairly the consolidated financial position of Unison and its
consolidated Subsidiaries as of their respective dates, and the consolidated
results of their operations and their
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cash flows for the periods presented therein (subject, in the case of the
unaudited interim financial statements, to normal year-end adjustments).
(c) Since the end of the period covered by the most recent
consolidated financial statements of Unison included in the Unison SEC
Documents, there has not been any material adverse change in the business,
operations or prospects of Unison or any of its consolidated Subsidiaries.
(d) Based on Unison's Knowledge, facts and circumstances do
not exist that require Unison to make SEC filings that have not been filed
solely for the reason that the due date for same is a future date, excepting
from the foregoing Unison's Form 10-Q for the quarter ended June 30, 1996.
Section 5.5 Information Supplied. No representation or warranty of
either Unison or LABCO omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied by Unison or LABCO in writing for inclusion in the Merger
Information Statement will at the respective times that the Merger Information
Statement, or any amendments or supplements thereto, is filed with the SEC and
is first published or sent or given to holders of Shareholders for the Company
Shareholders 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.
Section 5.6 Interim Operations of LABCO. LABCO was formed solely for
the purpose of engaging in the Contemplated Transactions, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
Section 5.7 Brokers or Finders. Except as set forth on Schedule 5.7,
neither Unison nor LABCO and their respective officers and agents have incurred
any obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement. Unison and LABCO will indemnify and hold the Company harmless from
any such payment alleged to be due by or through Unison or LABCO as a result of
the action of Unison or LABCO or its officers or agents.
Section 5.8 Activities After Closing. Neither Unison nor LABCO will
take any action or fail to take any action after Closing that is reasonably
within its authority that if taken or not taken will cause the Contemplated
Transactions not to qualify under the IRC as a tax free reorganization.
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Section 5.9 Disclosure.
(a) No representation or warranty of Unison or LABCO in this
Agreement omits to state a material fact necessary to make the statements herein
or therein, in light of the circumstances in which they were made, not
misleading.
(b) No notice given pursuant to Section 6.11 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading.
Section 5.10 Legal Proceedings; Orders. There is no pending Proceeding
that has been commenced by or against Unison or LABCO or that otherwise relates
to or may materially adversely affect the business of, or any of the assets
owned or used by, Unison or LABCO or that challenges, or that may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions. To the Knowledge of Unison and LABCO, (1)
no such Proceeding has been Threatened, and (2) neither Unison nor LABCO has
Knowledge of any event that has occurred or circumstance that exists that may
give rise to or serve as a basis for the commencement of any such Proceeding.
Section 5.11 Capitalization. The authorized capital stock of Unison
consists solely of 10,000,000 shares of $.001 par value common stock and
1,000,000 shares of $.001 par value preferred stock, of which, as of the date
hereof, 3,900,312 shares of Unison Common Stock are issued and outstanding. All
such shares of Unison Common Stock been duly authorized and validly issued, are
fully paid and non-assessable and were not issued in violation of any preemptive
right.
Section 5.12 Merger Consideration. All shares of Unison Common Stock to
be issued as Per Share Consideration upon issuance will be duly authorized and
validly issued, fully paid and non-assessable and not issued in violation of any
preemptive right.
SECTION 6 FURTHER COVENANTS PRIOR TO CLOSING DATE
Section 6.1 Access and Investigation. Between the date of this
Agreement and the Closing Date, the Company will, (a) afford Unison, LABCO and
their Representatives and prospective lenders and their Representatives
(collectively, "LABCO's Advisors") reasonable access to each Acquired Company's
personnel, properties (including subsurface testing), contracts, books and
records, and other documents and data, (b) furnish Unison, LABCO and LABCO's
Advisors with copies of all such contracts, books and records, and other
existing documents and data as Unison or LABCO may reasonably request, and (c)
furnish Unison, LABCO and LABCO's Advisors with such additional financial,
operating, and other data and information as they may reasonably request.
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Section 6.2 Operation of the Businesses of the Acquired Companies.
Between the date of this Agreement and the Closing Date, the Company
will:
(a) conduct the business of each Acquired Company only in the
Ordinary Course of Business;
(b) use their Best Efforts to preserve intact the current
business organization of each Acquired Company, keep available the services of
the current officers, employees, and agents of each Acquired Company, and
maintain the relations and good will with suppliers, customers, landlords,
creditors, employees, agents, and others having business relationships with each
Acquired Company;
(c) confer with Unison and LABCO concerning operational
matters of a material nature; and
(d) otherwise report periodically to Unison and LABCO
concerning the status of the business, operations, and finances of each Acquired
Company.
Section 6.3 Negative Covenant. Except as otherwise expressly permitted
by this Agreement, between the date of this Agreement and the Closing Date, the
Company will not, and will cause each Acquired Company not to, without the prior
written consent of Unison and LABCO, take any affirmative action, or fail to
take any reasonable action within their or its control, as a result of which any
of the changes or events listed in Section 4.16 is likely to occur.
Section 6.4 Required Approvals. As promptly as practicable after the
date of this Agreement, the Company will, and will cause each Acquired Company
to, make all filings required by Legal Requirements to be made by them in order
to consummate the Contemplated Transactions. Between the date of this Agreement
and the Closing Date, the Company will, and will cause each Acquired Company to
cooperate with Unison and LABCO with respect to all filings that Unison or LABCO
elects to make or is required by Legal Requirements to make in connection with
the Contemplated Transactions.
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Section 6.5 Shareholders' Meeting, Merger Information Statement and
Registration Statement.
(a) As soon as reasonably practicable after the date
hereof:
(i) the Company shall duly call, give notice of,
convene and hold a special meeting of the Shareholders (the "Company
Shareholders Meeting"), to be held as soon as practicable after the date hereof
for the purpose of considering and taking action upon the Merger; and
(ii) the Company shall prepare in accordance with the
applicable provisions of the federal securities laws and Utah laws an
information statement with respect to the Merger and the Contemplated
Transactions (the "Merger Information Statement").
(b) the Company shall use its Best Efforts (i) to obtain and
furnish the information required to be included by it in the Merger Information
Statement and, after consultation with LABCO and Unison, respond promptly to any
comments made by the SEC with respect to the Merger Information Statement and
any preliminary version thereof and cause the Merger Information Statement to be
mailed to the Shareholders at the earliest practicable time after the date
hereof (subject to the effectiveness of the Registration Statement, as defined
in Section 6.5(d)) and (ii) obtain the necessary approval by the Shareholders of
this Agreement and the transactions contemplated hereby unless there exists at
such time a proposal for a Third Party Acquisition and in the judgment of the
Board of Directors of the Company after consultation with Company counsel,
obtaining such approvals would be a breach of its fiduciary duties to the
Shareholders or other constituencies under applicable law.
(c) The Senior Managers and the Maguire Limited Partnership
shall indemnify and hold harmless Unison, LABCO and their respective directors,
officers, employees, agents and other representatives (each, a "Unison
Indemnified Party") against any losses, claims, damages or liabilities, joint or
several, to which such Unison Indemnified Party may become subject under the
Securities Act, Exchange Act or applicable state law, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any untrue
statement of any material fact contained in the Registration Statement or Merger
Information Statement, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, in light of the circumstances in which they
were made, not misleading which statements or omissions were furnished to Unison
or LABCO, directly or indirectly through the Company, by such Shareholders
specifically for use in preparation of the Registration Statement and/or Merger
Information Statement. The indemnification provided for in this Section 6.5(c)
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shall be in addition to and shall not be satisfied out of the Reserve Shares.
(d) Unison shall prepare a registration statement on Form S-4
and any required amendments thereto (the "Registration Statement"), of which the
Merger Information Statement shall be a part, under the Securities Act with
respect to the shares of Unison Common Stock to be issued pursuant to the Merger
and file the Registration Statement with the SEC as soon as reasonably
practicable after the date hereof. Unison shall comply with the requirements of
the Securities Act, the Exchange Act and the rules and regulations of the SEC
under such acts applicable to the offering and sale of Unison Common stock in
connection with the Merger. Unison shall use its Best Efforts to cause the
Registration Statement to become effective as promptly as reasonably practicable
and shall take any action required under applicable federal or state securities
laws in connection with the issuance of Unison Common Stock pursuant to the
Merger.
(e) Unison shall indemnify and hold harmless the Company and
its directors, officers, employees, agents and other representatives and the
Maguire Limited Partnership (each, a "Company Indemnified Party") against any
losses, claims, damages or liabilities, joint or several, to which such Company
Indemnified Party may become subject under the Securities Act, Exchange Act or
applicable state law, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement of any material fact
contained in the Registration Statement or Merger Information Statement, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein, in light of the circumstances in which they were made, not misleading
which statements or omissions were furnished to the Company by Unison
specifically for use in preparation of the Registration Statement and/or Merger
Information Statement.
(f) If either Unison or the Company shall reasonably request
to include in the Merger Information Statement or omit therefrom any statement
in order that the Merger Information Statement will not include any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, the Merger Information Statement shall not be mailed to the
Shareholders without the mutual agreement of counsel for the Company and Unison
that such statement need not be included in or need not be omitted from the
Merger Information Statement.
(g) Each party shall furnish to the other such information
relating to it and its affiliates and the transactions contemplated by this
Agreement and such further and supplemental information as may be necessary or
as may be reasonably requested by the other party, in light of developments
occurring after the
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date hereof, to ensure that the statements regarding the parties hereto and
their affiliates and such transactions contained in the Merger Information
Statement, as so supplemented, will not on the effective date of the
Registration Statement or the date of the Company Shareholders Meeting or the
Effective Time include any untrue statement of a material fact or omit to state
a material fact required to be stated therein in order to make the statements
therein not misleading.
Section 6.6 Tax Representation Letter of the Company; No Disqualifying
Action.
The Company shall execute and deliver to Unison and LABCO the
certificate and the representation for tax purposes in the form of Exhibit 6.6
(the "Company Tax Representation Letter") as soon as reasonably practicable
after the date hereof and in any event not later than five business days prior
to the effective date of the Registration Statement (as anticipated by counsel
to Unison and LABCO). The Company will not take any action that would cause the
Merger to fail to qualify as a tax-free reorganization under Section 368(a) of
the IRC.
Section 6.7 Tax Representation Letters of Shareholders.
The Company shall use its Best Efforts to have those Shareholders
listed on Schedule 6.7 hereto execute and deliver a representation letter for
tax purposes in the form of Exhibit 6.7 (the "Shareholder Tax Representation
Letter") as soon as reasonably practicable after the date hereof and in any
event not later than five business days prior to the effective date of the
Registration Statement (as anticipated by counsel to Unison and LABCO).
Section 6.8 Agreements of Affiliates. As soon as reasonably practicable
after the date hereof and in any event not later than five business days prior
to the effective date of the Registration Statement (as anticipated by counsel
to Unison and LABCO), the Company shall deliver to Unison a letter identifying
all Persons who are anticipated to be at the time of the vote on the Merger
"affiliates" of the Company for purposes of Rule 145 under the Securities Act or
otherwise applicable SEC accounting releases with respect to pooling-of-interest
accounting treatment. The Company shall use its best efforts to cause each
Person who is identified as an "affiliate" in the letter referred to above to
deliver to the Company not later than five business days prior to the effective
date of the Registration Statement (as anticipated by counsel to Unison and
LABCO) a written agreement in the form of Exhibit 6.8 (the "Affiliate
Agreements").
Section 6.9 Delivery of Disclosure Schedules. The parties acknowledge
that this Agreement will be executed and delivered prior to the delivery of the
Disclosure Schedules and the delivery of schedules by Unison and LABCO pursuant
to Section 5 (the
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"Section 5 Schedules"). The Company agrees to deliver the Disclosure Schedules
to Unison and LABCO, and each of Unison and LABCO agree to deliver the Section 5
Schedules, as applicable, to the Company, within two weeks from the date hereof.
The parties agree that except for the obligations arising out of Section 10.1
and Section 10.3, which survive termination of this Agreement, (a) Unison and
LABCO shall each have the right to terminate this Agreement (i) if the
Disclosure Schedules shall not have been timely delivered or (ii) if such
Disclosure Schedules have been timely delivered but contain, in the aggregate,
disclosure of matters which would, or Unison or LABCO reasonably determines may,
materially adversely effect the business, operations or prospects of the
Company, and (b) the Company shall have the right to terminate this Agreement
(i) if the Section 5 Schedules shall not have been timely delivered or (ii) if
such Section 5 Schedules have been timely delivered but contain, in the
aggregate, disclosure of matters which would the Company reasonably determines
may materially adversely effect the business, operations or prospects of Unison
and its consolidated Subsidiaries as a whole.
Section 6.10 Notification by the Company. Between the date of this
Agreement and the Closing Date, the Company will promptly notify Unison and
LABCO in writing if any Acquired Company becomes aware of any fact or condition
that causes or constitutes a Breach of any of the Company's representations and
warranties as of the date of this Agreement, or if any Acquired Company becomes
aware of the occurrence after the date of this Agreement of any fact or
condition that would (except as expressly contemplated by this Agreement) cause
or constitute a Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. Should any such fact or condition require any change
in the Disclosure Schedules if the Disclosure Schedules were dated the date of
the occurrence or discovery of any such fact or condition, the Company will
promptly deliver to Unison and LABCO a supplement to the Disclosure Schedules
specifying such change. During the same period, the Company will promptly notify
Unison and LABCO of the occurrence of any Breach of any covenant of the Company
in this Section 6 or of the occurrence of any event that may make the
satisfaction of the conditions in Section 7 impossible or unlikely.
Section 6.11 Notification by Unison or LABCO. Between the date of this
Agreement and the Closing Date, Unison or LABCO, as applicable, will promptly
notify the Company in writing if it becomes aware of any fact or condition that
causes or constitutes a Breach of any of its representations and warranties as
of the date of this Agreement, or if it becomes aware of the occurrence after
the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a Breach of any
such representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. Should any
such fact or
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condition require any change in the Section 5 Schedules if the Section 5
Schedules were dated the date of the occurrence or discovery of any such fact or
condition, Unison or LABCO, as applicable, will promptly deliver to the Company
a supplement to the Section 5 Schedules specifying such change. During the same
period, Unison or LABCO, as applicable, will promptly notify the Company of the
occurrence of any Breach of any covenant of the Company in this Section 6 or of
the occurrence of any event that may make the satisfaction of the conditions in
Section 8 impossible or unlikely.
Section 6.12 No Negotiation. Until such time, if any, as this Agreement
is terminated pursuant to Section 9, the Company will not, and will cause each
Acquired Company and each of their Representatives not to, directly or
indirectly solicit, initiate, or encourage any inquiries or proposals from,
discuss or negotiate with, provide any non-public information to, or consider
the merits of any unsolicited inquiries or proposals from, any Person (other
than Unison and LABCO) relating to any transaction involving the sale of the
business or assets (other than in the Ordinary Course of Business) of any
Acquired Company, or any of the capital stock of any Acquired Company, or any
merger, consolidation, business combination, or similar transaction involving
any Acquired Company. Notwithstanding the foregoing, (i) the Company may
participate in discussions with, and may furnish information to any third party
which seeks to engage in discussions or requests such information, if, in either
case, the Board of Directors of the Company determines, based on the advice of
Tracy & Holland, L.L.P. or other legal counsel reasonably acceptable to Unison
("Legal Counsel"), that failing to engage in such discussions or to provide such
information would reasonably be expected to violate the fiduciary duties of the
Board of Directors of the Company to the Shareholders, and (ii) the Board of
Directors of the Company may take and disclose to Shareholders a position
contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange Act with
respect to any tender offer and may make such disclosure to the Shareholders as
may be required under applicable law.
Section 6.13 Tax Representation Letter of Unison and LABCO.
Unison and LABCO shall execute and deliver to the Company the
certificate and the representation for tax purposes in the form of Exhibit 6.13
(the "Unison/LABCO Tax Representation Letter") as soon as reasonably practicable
after the date hereof and in any event not later than five business days prior
to the effective date of the Registration Statement (as anticipated by counsel
to Unison and LABCO).
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Section 6.14 Pooling-of-Interests. Each of the Company, Unison and
LABCO shall use its Best Efforts (i) to cause the Merger to qualify, and shall
not take any actions which could prevent the Merger from qualifying, for
pooling-of-interests accounting treatment and as a reorganization under Section
368(a) of the IRC and (ii) to obtain a letter from Ronald H. Ridgers, PC, CPA
regarding actions taken by the Company which could prevent the Merger from
qualifying, for pooling-of-interests accounting treatment.
Section 6.15 Nasdaq Listing. Unison shall use its Best Efforts to list,
prior to the Effective Time, on the Nasdaq National Market, subject to official
notice of issuance, the shares of Unison Common Stock to be issued to the
Shareholders in the Merger.
Section 6.16 Approvals of Governmental Bodies. As promptly as
practicable after the date of this Agreement, Unison and LABCO will, and will
cause each of its Related Persons to, make all filings required by Legal
Requirements to be made by them to consummate the Contemplated Transactions.
Between the date of this Agreement and the Closing Date, Unison and LABCO will,
and will cause each Related Person to, cooperate with the Company with respect
to all filings that the Company is required by Legal Requirements to make in
connection with the Contemplated Transactions, and (ii) cooperate with the
Company in obtaining all consents identified on Schedule 4.2(b); provided that
this Agreement will not require Unison or LABCO to dispose of or make any change
in any portion of its business or to incur any other burden to obtain a
Governmental Authorization.
Section 6.17 Best Efforts. Between the date of this Agreement and the
Closing Date, the Company, Unison and LABCO will use their Best Efforts to cause
the conditions in Sections 7 and 8 to be satisfied, except, with respect to
Unison and LABCO, as set forth in the proviso to Section 6.16.
SECTION 7 CONDITIONS PRECEDENT TO UNISON'S AND LABCO'S
OBLIGATION TO CLOSE
Unison's and LABCO's obligation to consummate the Merger and to take
the other actions required to be taken by Unison and LABCO at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Unison or LABCO, in whole or
in part):
Section 7.1 Accuracy of Representations. Each of the Company's
representations and warranties set forth in Section 4 of this Agreement shall
have been accurate in all material respects as of the date of this Agreement,
and shall be accurate in all material respects as of the Closing Date as if made
on the Closing Date.
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Section 7.2 Company's Performance. Each of the covenants and
obligations that the Company is required to perform or to comply with pursuant
to this Agreement at or prior to the Closing shall have been duly performed and
complied with in all material respects.
Section 7.3 Shareholder Approval. This Agreement and the Merger shall
have been duly approved by the Shareholders of the Company in accordance with
applicable law and the articles of incorporation and by-laws of the Company.
Section 7.4 Board Approval. This Agreement and the Merger shall have
been duly approved by the Board of Directors of each of Unison and LABCO in
accordance with applicable law and the respective certificate and articles of
incorporation and by-laws of Unison and LABCO.
Section 7.5 Effectiveness of Registration Statement. The Registration
Statement shall have been declared effective by the SEC, no stop order with
respect thereto shall be in effect, and no proceedings for that purpose shall
have been initiated or threatened by the SEC.
Section 7.6 Listing Approval. The shares of Unison Common Stock to be
issued in the Merger shall have been approved for listing on the Nasdaq National
Market subject to official notice of issuance.
Section 7.7 Consents. Each Consent required under the Contracts set
forth on Schedule 4.2(b) shall have been obtained and shall be in full force and
effect.
Section 7.8 Additional Documents. Each of the following documents shall
have been delivered to Unison and LABCO:
(a) an opinion of Tracy & Holland, L.L.P., dated the Closing
Date, in the form of Exhibit 7.8(a);
(b) a certificate of the Secretary of State of the State of
Utah as to the legal existence and good standing (including Tax) of the Company
in Utah;
(c) certificates of the appropriate governmental officials of
the state of incorporation of each Subsidiary as to the legal existence and good
standing (including Tax) of each Subsidiary;
(d) certificates of appropriate governmental officials in each
state in which any Acquired Company is required to qualify to do business as a
foreign corporation as to the due qualification and good standing of such
Acquired Company in each such jurisdiction;
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(e) a certificate of the secretary of the Company attesting to
the incumbency of the officers, the authenticity of the board of directors and
shareholder resolutions authorizing the Contemplated Transactions, and the
authenticity and continuing validity of the Organizational Documents delivered
pursuant to Section 4.1(b);
(f) such other documents as Unison or LABCO may reasonably
request for the purpose of (i) enabling its counsel to provide the opinion
referred to in Section 8.8(a), (ii) evidencing the accuracy of any of the
Company's representations and warranties, (iii) evidencing the performance by
the Company of, or the compliance by the Company with, any covenant or
obligation required to be performed or complied with by the Company, (iv)
evidencing the satisfaction of any condition referred to in this Section 7, or
(v) otherwise facilitating the consummation or performance of any of the
Contemplated Transactions;
(g) evidence reasonably satisfactory to Unison and LABCO
that the Encumbrances set forth on Schedule 4.1(a) which are to be
discharged have been discharged;
(h) in the event the Interim Balance Sheet is as at a date
more than 45 days prior to the Closing Date, an unaudited consolidated balance
sheet of the Acquired Companies as at a date not less than 45 days prior to the
Closing Date prepared in compliance with the requirements in Section 4.4 for the
Interim Balance Sheet, which unaudited consolidated balance sheet of the
Acquired Companies shall be deemed an Interim Balance Sheet for all purposes
under this Agreement;
(i) the tax certificate and letter of the Company pursuant to
Section 6.6;
(j) the representation letters of certain Shareholders
pursuant to Section 6.7; and
(k) the letters of affiliates of the Company pursuant to
Section 6.8.
Section 7.9 No Proceedings. Since the date of this Agreement, there
must not have been commenced or Threatened against Unison or LABCO, or against
any Person affiliated with Unison or LABCO, any Proceeding (a) involving any
challenge to, or seeking damages or other relief in connection with, any of the
Contemplated Transactions, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the Contemplated
Transactions.
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Section 7.10 No Claim Regarding Stock Ownership or Merger
Consideration.
Other than rights of Shareholders hereunder, there must not have been
made or Threatened by any Person any claim asserting that such Person (a) is the
holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any stock of, or any other voting, equity, or ownership
interest in, any of the Acquired Companies, or (b) is entitled to all or any
portion of the cash, assets or other property to be distributed to Shareholders
pursuant to Section 3 hereof.
Section 7.11 No Prohibition. Neither the consummation nor the
performance of any of the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time), materially contravene, or conflict
with, or result in a material violation of, or cause Unison or LABCO or any
Person affiliated with Unison or LABCO to suffer any material adverse
consequence under, (a) any applicable Legal Requirement or Order, or (b) any
Legal Requirement or Order that has been published, introduced, or otherwise
formally proposed by or before any Governmental Body.
Section 7.12 Termination of Agreements. All agreements, Contracts and
understandings set forth on Schedule 4.1(c) shall have been terminated with no
further liability or obligation of any Acquired Company.
Section 7.13 Dissenters' Rights. Objecting Shares shall not represent
more than five percent of the Shares.
Section 7.14 Agreement for Acquisition of Memphis Clinical Laboratory
Inc.
Unison, the Senior Managers and John Maguire shall have
completed, but for the Closing, the acquisition by Unison of all of
the issued and outstanding capital stock of Memphis Clinical
Laboratory Inc. from the Senior Managers and Mr. Maguire.
SECTION 8 CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO
CLOSE
The Company's obligation to consummate the Merger and to take the other
actions required to be taken by the Company at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by the Company, in whole or in part):
Section 8.1 Accuracy of Representations. Each of Unison's and LABCO's
representations and warranties set forth in Section 5 of this Agreement shall
have been accurate in all material respects as of the date of this Agreement and
shall be accurate in all
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material respects as of the Closing Date as if made on the Closing
Date.
Section 8.2 Unison's and LABCO's Performance. Each covenant and
obligation that Unison or LABCO is required to perform or to comply with
pursuant to this Agreement at or prior to the Closing shall have been performed
and complied with in all material respects.
Section 8.3 Board Approval. This Agreement and the Merger shall have
been duly approved by the Board of Directors of each of Unison and LABCO in
accordance with applicable law and the respective certificate and articles of
incorporation and by-laws of Unison and LABCO.
Section 8.4 Shareholder Approval. This Agreement and the Merger shall
have been duly approved by the Shareholders in accordance with applicable law
and the articles of incorporation and by-laws of the Company.
Section 8.5 Effectiveness of Registration Statement. The Registration
Statement shall have been declared effective by the SEC, no stop order with
respect thereto shall be in effect, and no proceedings for that purpose shall
have been initiated or threatened by the SEC.
Section 8.6 Listing Approval. The shares of Unison Common Stock to be
issued in the Merger shall have been approved for listing on the Nasdaq National
Market subject to official notice of issuance.
Section 8.7 Consents. Each of the Consents required by the Contracts
set forth on Schedule 4.2(b) shall have been obtained and shall be in full force
and effect.
Section 8.8 Additional Documents. Unison or LABCO must have caused the
following documents to be delivered to the Company:
(a) an opinion of Quarles & Brady, dated the Closing Date, in
the form of Exhibit 8.8(a);
(b) the tax certificate and letter of Unison and LABCO
pursuant to Section 6.13;
(c) a certificate of the Secretary of State of the State of
Delaware as to the legal existence and good standing (including Tax) of Unison
in Delaware;
(d) a certificate of the Secretary of State of the State of
Delaware as to the legal existence and good standing (including Tax) of LABCO in
Delaware;
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(e) a certificate of the secretary of Unison attesting to the
incumbency of the officers, the authenticity of the board of directors and
shareholder resolutions authorizing the Contemplated Transactions;
(f) a certificate of the secretary of LABCO attesting to the
incumbency of the officers, the authenticity of the board of directors and
shareholder resolutions authorizing the Contemplated Transactions; and
(g) such other documents as the Company may reasonably request
for the purpose of (i) enabling their counsel to provide the opinion referred to
in Section 7.8(a), (ii) evidencing the accuracy of any representation or
warranty of Unison or LABCO, (iii) evidencing the performance by Unison or LABCO
of, or the compliance by Unison or LABCO with, any covenant or obligation
required to be performed or complied with by Unison or LABCO, as applicable,
(ii) evidencing the satisfaction of any condition referred to in this Section 8,
or (v) otherwise facilitating the consummation of any of the Contemplated
Transactions.
Section 8.9 No Proceeding. Since the date of this Agreement, there must
not have been commenced or Threatened against Unison or LABCO, or against any
Person affiliated with Unison or LABCO, any Proceeding (a) involving any
challenge to, or seeking damages or other relief in connection with, any of the
Contemplated Transactions, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the Contemplated
Transactions.
Section 8.10 No Prohibition. Neither the consummation nor the
performance of any of the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time), materially contravene, or conflict
with, or result in a material violation of, or cause the Company or any Person
affiliated with the Company to suffer any material adverse consequence under,
(a) any applicable Legal Requirement or Order, or (b) any Legal Requirement or
Order that has been published, introduced, or otherwise formally proposed by or
before any Governmental Body.
Section 8.11 Agreement for Acquisition of Memphis Clinical Laboratory
Inc.
Unison, the Senior Managers and John Maguire shall have completed, but
for the Closing, the acquisition by Unison of all of the issued and outstanding
capital stock of Memphis Clinical Laboratory Inc. from the Senior Managers and
Mr. Maguire.
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SECTION 9 TERMINATION
Section 9.1 Termination Events. This Agreement may, by notice given
prior to or at the Closing, be terminated:
(a) by either party pursuant to Section 3.1. or by failure of
the Closing to take place on or prior to the date set for Closing in Section
2.5, but, in either case subject to the provisions of Section 9.1(f);
(b) by either Unison, LABCO or the Company if a material
Breach of any provision of this Agreement has been committed by the other party
and such Breach has not been waived;
(c) by Unison or LABCO if any of the conditions in Section 7
has not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of Unison or
LABCO to comply with its respective obligations under this Agreement) and
neither Unison nor LABCO has waived such condition on or before the Closing
Date;
(d) by Unison or LABCO if the Board of Directors of the
Company withdraws or materially modifies or changes its favorable recommendation
of this Agreement or the Merger;
(e) by the Company, if any of the conditions in Section 8 has
not been satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of the Company to
comply with its obligations under this Agreement) and the Company has not waived
such condition on or before the Closing Date;
(f) by the Company, if the Board of Directors of the Company
withdraws or materially modifies or changes its favorable recommendation of this
Agreement or the Merger if there exists at such time a proposal for a Third
Party Acquisition and the Board of Directors of the Company after consultation
with Company counsel determines that the failure to take such action would be a
breach of the fiduciary duties to the Company's shareholders or other
constituencies under applicable law; provided, however, that such termination
under this Section 9.1(f) shall not be effective until the Company has made
payment to Unison of the Transaction Expenses required to be paid pursuant to
Section 9.2.
(g) by mutual consent of LABCO and the Company; or
(h) by either LABCO or the Company if the Closing has not
occurred (other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before October 30, 1996, or such later date as the parties may agree upon.
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Section 9.2 Special Fees.
(a) In the event that:
(i) this Agreement shall have been terminated
pursuant to Section 9.1(d) or Section 9.1(f) and within 9 months of such
termination: (x) a Third Party Acquisition shall occur, or (y) there is a letter
of intent or similar instrument or other agreement between the Company and a
Third Party for a Third Party Acquisition, or a public announcement by the
Company of the Company's intention or plans to effect a Third Party Acquisition;
or
(ii) any Person (other than Unison or an affiliate of
Unison) shall have commenced, publicly proposed or communicated to the Company a
proposal that is publicly disclosed for a tender or exchange offer for more than
20% (or which, assuming the maximum amount of securities which could be
purchased, would result in any Person beneficially owning more than 20%) of the
then outstanding Shares or otherwise for the direct or indirect acquisition of
the Company or all or substantially all of its assets for a per Share
consideration having a value greater than the Per Share Consideration, and this
Agreement shall have been terminated pursuant to Section 9.1(d) or Section
9.1(f); or
(iii) this Agreement is terminated pursuant to
Section 9.1(f),
then, in any such event, the Company shall promptly pay Unison (but in no event
later than five business days after the first of such events shall have
occurred) the Transaction Expenses.
(b) Unison shall have the right to make more than one request
for payment of Transaction Expenses, subject to the limitation on total
Transaction Expenses. In the event the Company shall fail to pay invoiced
Transaction Expenses within five days of receipt of an invoice therefor from
Unison, the term "Transaction Expenses" shall be deemed to include the costs and
expenses actually incurred or accrued by Unison and LABCO (including, without
limitation, fees and expenses of counsel) in connection with the collection
under and enforcement of Section 9.1(f), together with interest on such unpaid
Transaction Expenses, commencing on the date that the Transaction Expenses were
paid, at a rate equal to the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York, from time to time, in the City of New York,
as such bank's Prime Rate plus 1.00%.
Section 9.3 Effect of Termination. Each party's right of termination
under Section 9.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies. If this Agreement is terminated pursuant to Section
9.1, all further
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obligations of the parties under this Agreement will terminate, except that the
obligations in Sections 10.1 and 10.3 will survive; provided, however, that if
this Agreement is terminated by a party because of the Breach of the Agreement
by the other party or because one or more of the conditions to the terminating
party's obligations under this Agreement is not satisfied as a result of the
other party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
SECTION 10 GENERAL PROVISIONS
Section 10.1 Expenses. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
Section 10.2 Public Announcements. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, at such time and in such manner as LABCO and the Company
determine. Unless consented to by LABCO in advance or required by Legal
Requirements, prior to the Closing the Company shall, and shall cause the
Acquired Companies to, keep this Agreement strictly confidential and may not
make any disclosure of this Agreement to any Person. The Company and LABCO will
consult with each other concerning the means by which the Acquired Companies'
employees, customers, and suppliers and others having dealings with the Acquired
Companies will be informed of the Contemplated Transactions, and LABCO will have
the right to be present for any such communication.
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Section 10.3 Confidentiality.
(a) Between the date of this Agreement and the Closing Date,
Unison, LABCO and the Company will maintain in confidence, and will cause the
directors, officers, employees, agents, and advisors of Unison, LABCO and the
Acquired Companies to maintain in confidence, and not use to the detriment of
another party or an Acquired Company any written, oral, or other information
obtained in confidence from another party or an Acquired Company in connection
with this Agreement or the Contemplated Transactions, unless (i) such
information is already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such party, (ii) the use of such information is necessary or appropriate in
making any filing or obtaining any consent or approval required for the
consummation of the Contemplated Transactions, or (iii) the furnishing or use of
such information is required by or necessary or appropriate in connection with
legal proceedings.
(b) If the Contemplated Transactions are not consummated: (i)
each party will return or destroy as much of such written information as the
other party may reasonably request; and (ii) Unison, LABCO and their respective
Related Persons, will not employ, solicit the employment or contract with any
employee or independent contractor of any of the Acquired Companies for a period
of six months after the termination of this Agreement.
Section 10.4 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
The Company: American Professional Holding, Inc.
10925 Estate Lane, Suite 390
Dallas, Texas 75238
Attn: W. Jerome McGee
Facsimile No.: (214) 342-2129
with a copy to: Tracy & Holland, L.L.P.
306 West 7th Street, Suite 500
Fort Worth, Texas 76102
Attn: George T. Johns, Esq.
Facsimile No.: (817) 332-3140
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LABCO: Labco Acquisition Co.
7272 East Indian School Road, Suite 214
Scottsdale, Arizona 85251
Attn: President
Facsimile: (602) 481-6479
with a copy to: Quarles & Brady
One East Camelback, Suite 400
Phoenix, Arizona 85012-1649
Attn: P. Robert Moya, Esq.
Facsimile: (602) 230-5598
Unison: Unison HealthCare Corporation
7272 East Indian School Road, Suite 214
Scottsdale, Arizona 85251
Attn: President
Facsimile: (602) 481-6479
Section 10.5 Jurisdiction; Service of Process. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Arizona, County of Maricopa, or, if it has or can acquire jurisdiction, in
the United States District Court for the District of Arizona, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
Section 10.6 Further Assurances. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
Section 10.7 Combined Operating Results. Unison shall use its Best
Efforts to publish the results of at least 30 days of combined operations of the
Company and Unison following the Effective Time as soon as reasonably
practicable after the end of such 30 day period.
Section 10.8 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable
63
<PAGE> 68
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
Section 10.9 Entire Agreement and Modification. This Agreement
supersedes all prior agreements between the parties with respect to its subject
matter (including the Letter of Intent between Unison and the Company dated
March 26, 1996) and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement executed by the party to be charged
with the amendment.
Section 10.10 Disclosure Schedules.
(a) The disclosures in the Disclosure Schedules, and those in
any Supplement thereto, shall be deemed to relate only to the representations
and warranties in the Section of the Agreement to which they expressly relate
and not to any other representation or warranty in this Agreement.
(b) In the event of any inconsistency between the statements
in the body of this Agreement and those in the Disclosure Schedules (other than
an exception expressly set forth as such in the Disclosure Schedules with
respect to a specifically identified representation or warranty), the statements
in the body of this Agreement will control.
Section 10.11 Assignments, Successors, and No Third-Party Rights.
Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties except that Unison may assign any of its
rights under this Agreement to any Subsidiary of Unison. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement; provided, however, that the provisions of Section 3.2,
Section 3.4 and Section 10.7 and the provisions of this Agreement concerning
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<PAGE> 69
qualification of the Contemplated Transactions as a tax free reorganization are
additionally intended to be for the benefit of the Shareholders. This Agreement
and all of its provisions and conditions are for the sole and exclusive benefit
of the parties to this Agreement and their successors and assigns.
Section 10.12 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
Section 10.13 Section Headings, Construction. The headings of Sections
in this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
Section 10.14 Time of Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.
Section 10.15 Governing Law. This Agreement will be governed by the
laws of the State of Arizona without regard to conflicts of laws principles.
Section 10.16 Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
65
<PAGE> 70
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
UNISON:
UNISON HEALTHCARE CORPORATION, a Delaware corporation
By: /s/ Jerry M. Walker
------------------------------
Name: Jerry M. Walker
----------------------------
Title: President
---------------------------
LABCO:
LABCO ACQUISITION CO., a Delaware corporation
By: /s/ Craig R. Clark
------------------------------
Name: Craig R. Clark
----------------------------
Title: Vice President
---------------------------
COMPANY:
AMERICAN PROFESSIONAL HOLDING, INC., a Utah corporation
By: /s/ John L. Maguire
------------------------------
Name: John L. Maguire
----------------------------
Title: President
---------------------------
<PAGE> 71
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this ___ day of July, 1996, before me, the undersigned
officer, personally appeared Jerry M. Walker, who acknowledged himself to be
the President of Unison HealthCare Corporation, a Delaware corporation, and
that he, in such capacity, being authorized so to do, executed the foregoing
instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
_________________________
Notary Public
My Commission Expires:
________________________
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this ___ day of July, 1996, before me, the undersigned
officer, personally appeared Craig R. Clark, who acknowledged himself to be a
Vice President of Labco Acquisition Co., a Delaware corporation, and that he,
in such capacity, being authorized so to do, executed the foregoing instrument
for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
_________________________
Notary Public
My Commission Expires:
_________________________
<PAGE> 72
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
STATE OF TEXAS )
) ss.
County of Tarrant )
On this 11th day of July, 1996, before me, the
undersigned officer, personally appeared John L. Maguire, who acknowledged
himself to be the President of American Professional Holding, Inc., a
Utah corporation, and that he, in such capacity, being authorized so to do,
executed the foregoing instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
_________________________
Notary Public
My Commission Expires:
_________________________
<PAGE> 1
EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
Among
UNISON HEALTHCARE CORPORATION
MEMPHIS ACQUISITION CO.
and
MEMPHIS CLINICAL LABORATORY, INC.
Dated July 3, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS................................................. 1
SECTION 1 DEFINITIONS................................... 2
SECTION 2 THE MERGER AND EFFECTIVE TIME; SURVIVING
CORPORATION; CLOSING......................... 11
Section 2.1 The Merger............................... 11
Section 2.2 Effective Time........................... 11
Section 2.3 Articles of Incorporation And Bylaws..... 11
Section 2.4 Board Of Directors....................... 12
Section 2.5 Closing.................................. 12
Section 2.6 Closing Obligations...................... 12
SECTION 3 CONVERSION OF SHARES......................... 13
Section 3.1 Conversion Of Shares In The Merger....... 13
Section 3.2 Adjustments to Share Consideration....... 14
Section 3.3 Exchange of Certificates................. 15
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.16
Section 4.1 Organization and Good Standing;
Capitalization; Agreements Regarding
Capital Stock............................ 16
Section 4.2 Authority; No Conflict................... 17
Section 4.3 Capitalization........................... 18
Section 4.4 Financial Statements..................... 18
Section 4.5 Books and Records........................ 19
Section 4.6 Title to Properties; Encumbrances........ 19
Section 4.7 Condition and Sufficiency of Assets...... 20
Section 4.8 Accounts Receivable...................... 20
Section 4.9 Prepaid Supplies......................... 20
Section 4.10 No Undisclosed Liabilities............... 21
Section 4.11 Taxes.................................... 21
Section 4.12 No Material Adverse Change............... 22
Section 4.13 Employee Benefits........................ 22
Section 4.14 Compliance with Legal Requirements;
Governmental Authorizations.............. 26
Section 4.15 Legal Proceedings; Orders................ 27
Section 4.16 Absence of Certain Changes and Events.... 28
Section 4.17 Contracts; No Defaults................... 29
Section 4.18 Insurance................................ 31
Section 4.19 Environmental Matters.................... 33
Section 4.20 Employees................................ 35
Section 4.21 Labor Relations; Compliance.............. 36
Section 4.22 Intellectual Property.................... 36
Section 4.23 Certain Payments......................... 38
Section 4.24 Disclosure............................... 39
Section 4.25 Relationships with Related Persons....... 39
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 4.26 Accounting Matters....................... 39
Section 4.27 Brokers or Finders....................... 40
SECTION 5 REPRESENTATIONS AND WARRANTIES OF UNISON AND
MEMCO......................................... 40
Section 5.1 Organization and Good Standing........... 40
Section 5.2 Authority; No Conflict................... 40
Section 5.3 Certain Proceedings...................... 41
Section 5.4 SEC Documents; Financial Statements...... 41
Section 5.5 Information Supplied..................... 42
Section 5.6 Interim Operations of MEMCO.............. 42
Section 5.7 Brokers or Finders....................... 42
Section 5.8 Disclosure............................... 42
Section 5.9 Legal Proceedings; Orders................ 43
Section 5.10 Capitalization........................... 43
Section 5.11 Merger Consideration..................... 43
SECTION 6 FURTHER COVENANTS PRIOR TO CLOSING DATE....... 43
Section 6.1 Access and Investigation................. 43
Section 6.2 Operation of the Businesses of the
Company.................................. 43
Section 6.3 Negative Covenant........................ 44
Section 6.4 Required Approvals....................... 44
Section 6.5 Shareholders' Meeting, Merger Information
Statement and Registration Statement..... 44
Section 6.6 Agreements of Affiliates................. 46
Section 6.7 Delivery of Disclosure Schedules......... 47
Section 6.8 Notification by the Company.............. 47
Section 6.9 Notification by Unison or MEMCO.......... 48
Section 6.10 No Negotiation........................... 48
Section 6.11 Pooling-of-Interests..................... 49
Section 6.12 Nasdaq Listing........................... 49
Section 6.13 Approvals of Governmental Bodies......... 49
Section 6.14 Best Efforts............................. 49
SECTION 7 CONDITIONS PRECEDENT TO UNISON'S AND MEMCO'S
OBLIGATION TO CLOSE........................... 49
Section 7.1 Accuracy of Representations.............. 49
Section 7.2 Company's Performance.................... 50
Section 7.3 Shareholder Approval..................... 50
Section 7.4 Board Approval........................... 50
Section 7.5 Effectiveness of Registration Statement.. 50
Section 7.6 Listing Approval......................... 50
Section 7.7 Consents................................. 50
Section 7.8 Additional Documents..................... 50
Section 7.9 No Proceedings........................... 51
Section 7.10 No Claim Regarding Stock Ownership or
Merger Consideration..................... 51
Section 7.11 No Prohibition........................... 52
Section 7.12 Termination of Agreements................ 52
Section 7.13 Agreement for Merger of Labco and Ampro.. 52
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
SECTION 8 CONDITIONS PRECEDENT TO COMPANY'S OBLIGATION TO
CLOSE......................................... 52
Section 8.1 Accuracy of Representations.............. 52
Section 8.2 Unison's and MEMCO's Performance......... 52
Section 8.3 Board Approval........................... 52
Section 8.4 Shareholder Approval..................... 52
Section 8.5 Effectiveness of Registration Statement.. 53
Section 8.6 Listing Approval......................... 53
Section 8.7 Consents................................. 53
Section 8.8 Additional Documents..................... 53
Section 8.9 No Proceeding............................ 54
Section 8.10 No Prohibition........................... 54
Section 8.11 Agreement for Merger of Labco and Ampro.. 54
SECTION 9 TERMINATION................................... 54
Section 9.1 Termination Events....................... 54
Section 9.2 Special Fees............................. 55
Section 9.3 Effect of Termination.................... 56
SECTION 10 GENERAL PROVISIONS........................... 56
Section 10.1 Expenses................................. 56
Section 10.2 Public Announcements..................... 56
Section 10.3 Confidentiality.......................... 57
Section 10.4 Notices.................................. 57
Section 10.5 Jurisdiction; Service of Process......... 58
Section 10.6 Further Assurances....................... 58
Section 10.7 Combined Operating Results............... 58
Section 10.8 Waiver................................... 59
Section 10.9 Entire Agreement and Modification........ 59
Section 10.10 Disclosure Schedules..................... 59
Section 10.11 Assignments, Successors, and No Third-
Party Rights............................. 60
Section 10.12 Severability............................. 60
Section 10.13 Section Headings, Construction........... 60
Section 10.14 Time of Essence.......................... 60
Section 10.15 Governing Law............................ 60
Section 10.16 Counterparts............................. 60
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger ("Agreement") is made as of July 3,
1996, among UNISON HEALTHCARE CORPORATION, a Delaware corporation ("Unison"),
MEMPHIS ACQUISITION CO., a Delaware corporation ("MEMCO"), and MEMPHIS CLINICAL
LABORATORY, INC., a Tennessee corporation (the "Company").
RECITALS
A. Unison HealthCare Corporation, a Delaware corporation ("Unison"), is
engaged in the business of owning, leasing and managing nursing homes and other
types of care facilities and the delivery of ancillary services, and MEMCO is a
wholly-owned subsidiary of Unison;
B. MEMCO and the Company desire that MEMCO be merged into the Company
pursuant to this Agreement and in accordance with the applicable statutes of the
State of Tennessee;
C. The Company is principally engaged in the business of owning and
operating medical laboratories for the commercial processing and evaluation of
various types of human tissues;
D. The respective Boards of Directors of MEMCO and the Company have
each approved the merger of MEMCO with and into the Company pursuant to the
provisions of this Agreement;
E. The Board of Directors of the Company has duly resolved that this
Agreement be submitted to the Company's shareholders in accordance with the
Tennessee Business Corporation Act;
F. Unison shall prepare a Registration Statement on Form S-4 to be
filed with the Securities and Exchange Commission registering the shares of
Unison Common Stock to be issued to the Company shareholders in the Merger,
which Registration Statement shall include an information statement of the
Company to be used in connection with the vote of the shareholders of the
Company authorizing the Merger; and
G. Unison and certain shareholders of the Company are separately
negotiating a merger of Labco Acquisition Co., a wholly-owned subsidiary of
Unison ("Labco") with and into American Professional Holding, Inc. ("Ampro"),
with Ampro being the surviving corporation.
<PAGE> 6
AGREEMENT
The parties, intending to be legally bound, agree as follows:
SECTION 1 DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
set forth below:
"AFFILIATE AGREEMENTS" shall have the meaning set forth in
Section 6.6.
"APPLICABLE CONTRACT" shall mean any Contract involving $5,000 or more
or which are not cancelable within 30 days (a) under which the Company has or
may acquire any rights, (b) under which the Company has or may become subject to
any obligation or liability, or (c) by which the Company or any of the assets
owned or used by it is or may become bound.
"ARTICLES OF MERGER" shall have the meaning set forth in Section 2.2.
"BALANCE SHEET" shall have the meaning set forth in Section 4.4.
"BEST EFFORTS" shall mean the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible, without incurring unreasonable
expense.
"BREACH" of a representation, warranty, covenant, obligation, or other
provision of this Agreement or any instrument delivered pursuant to this
Agreement, shall mean any inaccuracy in or breach of, or any failure to perform
or comply with, such representation, warranty, covenant, obligation, or other
provision.
"CERTIFICATE OF MERGER" shall have the meaning set forth in Section
2.2.
"CLOSING" shall have the meaning set forth in Section 2.5.
"CLOSING DATE" shall mean the date and time as of which the Closing
actually takes place.
"CLOSING SHARES" shall mean the 648 Shares owned by Seals.
"CLOSING SHARES CONSIDERATION" shall mean (i) a promissory note in the
original principal amount of $250,000 in the form attached hereto as Exhibit
3.1(a) and (ii) a cash payment in the amount of the sum of (X) $200,000 and (Y)
interest equal to 6% per annum on $450,000 from June 30, 1995 through the
Closing Date.
2
<PAGE> 7
"COMPANY" shall have the meaning set forth in the first paragraph of
this Agreement.
"CONSENT" shall mean any approval, consent, ratification, waiver, or
other authorization (including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS" shall mean all of the transactions
contemplated by this Agreement, including:
(a) the Merger;
(b) the execution, delivery, and performance of the Affiliate
Agreements and the Shareholder Releases; and
(c) the performance by the Company and MEMCO of their
respective covenants and obligations under this Agreement.
"CONTRACT" shall mean any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"DGCL" shall mean the Delaware General Corporation Law.
"DISCLOSURE SCHEDULES" shall mean the disclosure schedules delivered by
the Company to Unison and MEMCO in connection with the execution and delivery of
this Agreement.
"EFFECTIVE TIME" shall have the meaning set forth in Section
2.2 hereof.
"ENCUMBRANCE" shall mean any charge, claim, community property
interest, condition, equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
"ENVIRONMENT" shall mean soil, land surface or subsurface strata,
surface waters (including navigable waters, ocean waters, streams, ponds,
drainage basins, and wetlands), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life, and any
other environmental medium or natural resource.
"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" shall mean any cost,
damages, expense, liability, obligation, or other responsibility arising from or
under Environmental Law or Occupational Safety and Health Law and consisting of
or relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination,
3
<PAGE> 8
occupational safety and health, and regulation of chemical substances or
products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any investigation, cleanup, removal, containment, or other remediation
or response actions ("Cleanup") required by applicable Environmental Law or
Occupational Safety and Health Law (whether or not such Cleanup has been
required or requested by any Governmental Body or any other Person) and for any
natural resource damages; or
(d) any other compliance, corrective, investigative, or
remedial measures required under Environmental Law or Occupational Safety and
Health Law.
The terms "removal," "remedial," and "response action," include the
types of activities covered by the United States Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., as
amended ("CERCLA").
"ENVIRONMENTAL LAW" shall mean any Legal Requirement that
requires or relates to:
(a) advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants, medical waste or hazardous
substances or materials, violations of discharge limits, or other prohibitions
and of the commencements of activities, such as resource extraction or
construction, that could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged,
and used so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
4
<PAGE> 9
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;
(g) cleaning up pollutants that have been released, preventing
the threat of release, or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups
of them, for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974 or any successor law, and regulations and rules issued pursuant to that
Act or any successor law.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCHANGE AGENT" shall mean Harris Trust and Savings Bank.
"FACILITIES" shall mean any real property, leaseholds, or other
interests currently or formerly owned or operated by the Company and any
buildings, plants, structures, or equipment (including motor vehicles and
rolling stock) currently or formerly owned or operated by the Company.
"GAAP" shall mean generally accepted United States accounting
principles, applied on a basis consistent with the basis on which the Balance
Sheet and the other financial statements referred to in Section 4.4 were
prepared.
"GOVERNMENTAL AUTHORIZATION" shall mean any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"GOVERNMENTAL BODY" shall mean any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
5
<PAGE> 10
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"HAZARDOUS ACTIVITY" shall mean the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, and any
other act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Company.
"HAZARDOUS MATERIALS" shall mean any waste or other substance that is
listed, defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any Environmental Law, including any admixture or solution thereof,
and specifically including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing materials.
"INTELLECTUAL PROPERTY ASSETS" shall have the meaning set forth in
Section 4.22.
"INTERIM BALANCE SHEET" shall have the meaning set forth in Section
4.4.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, or any
successor law, and regulations issued by the IRS pursuant to the Internal
Revenue Code or any successor law.
"IRS" shall mean the United States Internal Revenue Service or any
successor agency, and, to the extent relevant, the United States Department of
the Treasury.
"KNOWLEDGE" of a particular fact or other matter shall mean such
individual is actually aware of such fact or other matter. A Person (other than
an individual) will be deemed to have "Knowledge" of a particular fact or other
matter if any individual who is serving as a director, or executive or operating
officer of such Person (or in any similar capacity) has Knowledge of such fact
or other matter.
"LEGAL REQUIREMENT" shall mean any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty.
"LETTER OF TRANSMITTAL" shall have the meaning set forth in Section
3.3(c) hereof.
6
<PAGE> 11
"MERGER" shall mean the merger of MEMCO with and into the Company with
the Company being the surviving corporation pursuant to this Agreement.
"OCCUPATIONAL SAFETY AND HEALTH LAW" shall mean any Legal Requirement
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, and any program, whether governmental or
private (including those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful working conditions.
"ORDER" shall mean any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS" shall mean an action taken by a Person
which:
(a) is consistent with the past practices of such Person and
is taken in the ordinary course of the normal day-to-day operations of such
Person;
(b) is not required to be authorized by the board of directors
of such Person (or by any Person or group of Persons exercising similar
authority); and
(c) is similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors (or by any Person or
group of Persons exercising similar authority), in the ordinary course of the
normal day-to-day operations of other Persons that are in the same line of
business as such Person.
"ORGANIZATIONAL DOCUMENTS" shall mean: (a) the articles or certificate
of incorporation and the bylaws of a corporation; (b) the partnership agreement
and any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any amendment
to any of the foregoing.
"PERSON" shall mean any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental Body.
"PLAN" shall have the meaning set forth in Section 4.13(a).
7
<PAGE> 12
"PROCEEDING" shall mean any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"RELATED PERSON" shall mean with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material Interest;
or
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly under common
control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity); or
(f) any Related Person of any individual described in clause
(b) or (c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse and (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (b) "Material Interest" means direct or indirect
beneficial
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ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least 10% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 10% of the outstanding equity securities or
equity interests in a Person.
"RELEASE" shall mean any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing into the
Environment, whether intentional or unintentional.
"REPRESENTATIVE" shall mean with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"SEALS" shall mean William R. Seals.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"SHAREHOLDER RELEASES" shall have the meaning set forth in
Section 2.6(a)(iv).
"SHAREHOLDERS" shall mean all holders of the Shares.
"SHAREHOLDERS AGREEMENT" shall mean the agreement dated as of June 30,
1995 among Seals, John L. Maguire, Harold N. McKinney, W. Jerome McGee and the
Company.
"SHARES" shall mean all issued and outstanding shares of
capital stock of the Company.
"SUBSIDIARY" shall mean with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one or more of its Subsidiaries;
when used without reference to a particular Person, "Subsidiary" means a
Subsidiary of the Company.
"TAX" shall mean any tax (including any income tax, capital gains tax,
value-added tax, sales tax, property tax, gift tax or estate tax), levy,
assessment, tariff, duty (including any customs
9
<PAGE> 14
duty), deficiency or other fee, and any related charge or amount (including any
fine, penalty, interest or addition to tax), imposed, assessed or collected by
or under the authority of any Governmental Body or payable pursuant to any
tax-sharing agreement or any other Contract relating to the sharing or payment
of any such tax, levy, assessment, tariff, duty, deficiency or fee.
"TAX RETURN" shall mean any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection,
or payment of any Tax or in connection with the administration, implementation,
or enforcement of or compliance with any Legal Requirement relating to any Tax.
"TBCA" shall mean the Tennessee Business Corporation Act.
"THIRD PARTY" shall mean a Person other than Unison, MEMCO, John L.
Maguire, Harold N. McKinney, W. Jerome McGee, or any affiliate thereof.
"THIRD PARTY ACQUISITION" shall mean the occurrence of any of the
following events: (i) the acquisition of the Company by merger, consolidation,
or other business combination transaction by a Third Party; (ii) the acquisition
by any Third Party of, or any divestiture or other transaction resulting in the
Company owning less than, 50% or more (in book value or market value) of the
total assets of the Company, taken as a whole as of the date hereof; (iii) the
acquisition by a Third Party of 50% or more of the outstanding Shares, whether
by tender offer, exchange or otherwise; or (iv) the adoption by the Company of a
plan of liquidation or a plan of recapitalization or the declaration or payment
of an extraordinary dividend.
"THREAT OF RELEASE" shall mean a substantial likelihood of a Release
that may require action in order to prevent or mitigate damage to the
Environment that may result from such Release.
"THREATENED" in respect of any claim, Proceeding, dispute, action, or
other matter shall mean that any demand or statement has been made (orally or in
writing) or any notice has been given (orally or in writing).
"TRANSACTION EXPENSES" shall mean all out-of-pocket expenses and fees
up to $50,000 in the aggregate (including, without limitation, legal fees and
expenses, fees and expenses payable to all banks, investment banking firms,
other financial institutions and other persons and their respective agents and
counsel for arranging, committing to provide or providing any financing or
services for the Merger and any transactions contemplated thereby or structuring
the transactions, and all fees of counsel,
10
<PAGE> 15
accountants, experts, consultants and soliciting or information firms to Unison
and MEMCO, and all printing, mailing and advertising expenses) actually incurred
and paid by Unison or MEMCO or on their behalf in connection with the
transactions, including, without limitation, any litigation related thereto and
the financing thereof, and actually incurred and paid by banks, investment
banking firms, other financial institutions and other persons and assumed by
Unison or MEMCO in connection with the negotiation, preparation, execution and
performance of this Agreement, the structuring and financing of the Merger and
any transactions contemplated hereby and thereby and any litigation and any
financing commitments or agreements relating thereto.
"UNISON COMMON STOCK" shall mean the $.001 par value per share common
stock of Unison.
SECTION 2 THE MERGER AND EFFECTIVE TIME; SURVIVING CORPORATION;
CLOSING
Section 2.1 The Merger. At the Effective Time, and subject to the terms
and conditions set forth herein, MEMCO shall be merged with and into the Company
and the separate existence of MEMCO shall thereupon cease, in accordance with
the applicable provisions of the TBCA. The Company shall be the surviving
corporation in the Merger (sometimes referred to herein as the "Surviving
Corporation") and will continue to be governed by the State of Tennessee and all
of its rights, privileges, immunities and franchises, public or private, and all
of its duties and liabilities as a corporation organized under the TBCA, will
continue unaffected by the Merger. The Merger will have the effects specified by
the TBCA.
Section 2.2 Effective Time. At the Closing, the Company and MEMCO will
execute and deliver articles of merger (the "Articles of Merger") and a
certificate of merger (the "Certificate of Merger") substantially in the forms
of Exhibits 2.2(A) and 2.2(B), respectively, and will, as promptly as
practicable thereafter, cause the Articles of Merger to be filed with the
Secretary of State of the State of Tennessee, as provided in Section 48-21-107
of the TBCA, and the Certificate of Merger to be filed with the Secretary of
State of the State of Delaware as provided in Section 252(c) of the DGCL.
Subject to and in accordance with the TBCA and DGCL, the Merger shall become
effective at the date and time specified in the Articles of Merger and
Certificate of Merger (the "Effective Time").
Section 2.3 Articles of Incorporation And Bylaws. The Articles of
Incorporation and Bylaws of the Company as in effect immediately prior to the
Effective Time shall be the Articles of Incorporation and Bylaws of the
Surviving Corporation.
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<PAGE> 16
Section 2.4 Board Of Directors. From and after the Effective Time, the
Board of Directors of MEMCO shall be the Board of Directors of the Surviving
Corporation.
Section 2.5 Closing. The closing of the transactions contemplated
herein (the "Closing") shall take place at the offices of Quarles & Brady, One
East Camelback, Suite 400, Phoenix, Arizona at 10:00 a.m. (local time) on
September 30, 1996 or at such other time and place as the parties may agree.
Subject to the provisions of Section 9, failure to consummate the Contemplated
Transactions on the date and time and at the place determined pursuant to this
Section 2.5 will not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
Section 2.6 Closing Obligations. At the Closing:
(a) The Company will deliver to Unison and MEMCO:
(i) two copies of the Articles of Merger, each duly
executed on behalf of the Company;
(ii) two copies of the Certificate of Merger, each
duly executed on behalf of the Company;
(iii) stock certificates representing all of the
Closing Shares, together with duly executed Letters of Transmittal by each
holder of Closing Shares;
(iv) releases in the form of Exhibit 2.6(a)(iv)
executed by each of the Shareholders listed on Schedule 2.6(a)(iv)
(collectively, the "Shareholder Releases");
(v) a certificate executed by the Company
representing and warranting to Unison and MEMCO that each of the Company's
representations and warranties in this Agreement was accurate in all respects as
of the date of this Agreement and is accurate in all respects as of the Closing
Date as if made on the Closing Date (giving full effect to any supplements to
the Disclosure Schedules that were delivered by the Company to Unison and MEMCO
prior to the Closing Date in accordance with Section 6.8); and
(vi) copies of the resolutions of the Company's Board
of Directors and Shareholders duly authorizing the Contemplated Transactions.
(b) Unison and MEMCO will deliver or cause to be delivered to
the Company:
(i) two copies of the Articles of Merger, each duly
executed on behalf of MEMCO;
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<PAGE> 17
(ii) two copies of the Certificate of Merger, each duly
executed on behalf of MEMCO;
(iii) a certificate executed by Unison and MEMCO representing
and warranting to the Company that each of Unison's and MEMCO's representations
and warranties in this Agreement was accurate in all respects as of the date of
this Agreement and is accurate in all respects as of the Closing Date as if made
on the Closing Date (giving full effect to any supplements to the schedules,
delivered by Unison and MEMCO to the Company pursuant to Section 5, prior to the
Closing Date in accordance with Section 6.8); and
(iv) copies of the resolutions of Unison's and MEMCO's Board
of Directors and shareholders duly authorizing the Contemplated Transactions.
SECTION 3 CONVERSION OF SHARES
Section 3.1 Conversion Of Shares In The Merger. At the Effective Time,
by virtue of the Merger and without any action on the part of any holder of
capital stock of the Company:
(a) The Shares issued and outstanding immediately prior to the
Effective Time shall be canceled and extinguished and be converted into the
following:
<TABLE>
<CAPTION>
Number of
Shareholder Shares Consideration
- ------------------------------- ------------------------ ----------------------------------------------
<S> <C> <C>
William R. Seals 648 The Closing Shares
Consideration
John L. Maguire 118 The right to receive
6,334 shares of Unison
Common Stock
Harold N. McKinney 117 The right to receive
6,333 shares of Unison
Common Stock
W. Jerome McGee 117 The right to receive
6,333 shares of Unison
Common Stock
Total 1,000
=====
</TABLE>
(b) The Shares of Unison Common Stock to be issued in the Merger
shall be distributed by the Exchange Agent to each Shareholder pursuant to
Section 3.3 hereof.
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<PAGE> 18
(c) Each share of Common Stock, par value $.01 per share, of MEMCO
issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of Common
Stock, par value $.01 per share, of the Surviving Corporation.
(d) If, between the date of this Agreement and the Effective Time,
the outstanding number of shares of Unison Common Stock shall have been changed
into a different number of shares by reason of a split-up or combination of
shares of Unison Common Stock, or with respect to such split-up or combination
there shall be declared a record date within said period with a distribution
date after the Effective Time or a stock dividend on Unison Common Stock shall
be declared with a record date within such period, the number of shares of
Unison Common Stock to be delivered pursuant to Section 3.1(a) and subject to
adjustment as provided in Section 3.2 shall be appropriately adjusted.
Section 3.2 Adjustments to Share Consideration.
(a) The aggregate number of Unison shares to be delivered under
Section 3.1(a) shall be subject to reduction based on net income of the Company
for the quarter ended June 30, 1996 (the "Second Quarter Net Income").
(b) As soon as reasonably practicable after the receipt of an
income statement for the Company for the quarter ended June 30, 1996, in
accordance with GAAP consistently applied throughout the period, which the
Company shall use its Best Efforts to furnish to Unison and MEMCO within 30 days
of the end of such quarter, Unison shall:
(i) subtract from (1) the Second Quarter Net Income (2) that
portion ("Unison Testing Net Income") of Second Quarter Net Income attributable
to testing by the Company at or for residents of long-term care facilities
owned, leased or managed by Unison or by any of its Subsidiaries ("Revised
Second Quarter Net Income"). Unison shall calculate Unison Testing Net Income by
multiplying (X) the revenue from testing by the Company at or for residents of
long-term care facilities owned, leased or managed by Unison or by any of its
Subsidiaries by (Y) the Company's average margin and subtracting from such
product (Z) an amount for tax based on an effective rate of 34%; and
(ii) divide (1) Revised Second Quarter Net Income by (2)
19,000.
(c) To the extent that the amount obtained in Section 3.2(b)(ii)
is less than .22, Unison shall deduct from each Shareholder entitled to receive
shares of Unison Common Stock in the Merger a ratable number of shares of Unison
Common Stock
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<PAGE> 19
sufficient such that the calculation in Section 3.2(b)(ii) shall yield not less
than .22.
Section 3.3 Exchange of Certificates.
(a) At the Effective Time, Unison shall pay to Seals the Closing
Shares Consideration against delivery by such Shareholder of each of the
following:
(i) a duly executed letter of transmittal; and
(ii) the certificates representing all Closing Shares held by
such Shareholder.
(b) As of the Effective Time, MEMCO shall deposit with the
Exchange Agent, for the benefit of those holders of Shares whose Shares will be
converted into the right to receive shares of Unison Common Stock in the Merger,
for exchange in accordance with this Section 3, through the Exchange Agent,
certificates representing the shares of Unison Common Stock issuable pursuant to
Section 3.1(a) in exchange for such issued and outstanding Shares. Unison Common
Stock into which Shares shall be converted pursuant to the Transaction shall be
deemed to have been issued at the Effective Time.
(c) As soon as reasonably practicable after the Effective Time,
Unison and MEMCO shall cause the Exchange Agent to mail to each record holder of
Shares (i) a letter of transmittal (the "Letter of Transmittal"), which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates representing the Shares held by such record holder (the
"Certificates") shall pass, only upon delivery of the Certificates to the
Exchange Agent and which shall be in such form and have such other provisions as
MEMCO shall reasonably specify and (ii) instructions for surrendering the
Certificates in exchange for certificates representing shares of Unison Common
Stock. Upon surrender of a Certificate for cancellation to the Exchange Agent,
together with such Letter of Transmittal duly executed and such other documents
as MEMCO or the Exchange Agent shall reasonably request, the holder of such
Certificate shall be entitled to receive promptly in exchange therefor a
certificate representing the shares of Unison Common Stock described in Section
3.1(a) hereof (rounded down to the nearest whole share). The Certificates so
surrendered shall forthwith be canceled. From and after the Effective Time,
Unison shall be entitled to treat such Certificates for Shares which have not
yet been surrendered for exchange as evidencing the ownership of that number of
shares of Unison Common Stock into which the Shares represented by such
Certificates shall have been converted, notwithstanding any failure to surrender
such certificates.
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<PAGE> 20
(d) Until surrendered as contemplated by this Section 3.3, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender such shares of Unison Common Stock
as provided in this Section 3.
(e) If any certificate for shares of Unison Common Stock is to be
issued in a name other than that in which the Certificate for Shares surrendered
therefor is registered, it shall be a condition of such issuance that the person
requesting such issuance shall pay any transfer or other tax required by the
reason of the issuance of such shares of Unison common stock in a name other
than that of the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of Unison or the Exchange Agent that such tax has
been paid or is not applicable.
(f) Neither Unison, MEMCO nor the Company shall be liable to the
holder of Shares for any shares of Unison Common Stock delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Unison and MEMCO as follows:
Section 4.1 Organization and Good Standing;
Capitalization; Agreements Regarding Capital
Stock.
(a) Schedule 4.1(a) hereto contains a complete and accurate list
of the Company's name, its jurisdiction of incorporation, each other
jurisdiction in which it is authorized to do business, and its capitalization
(including the number of shares of each class authorized and outstanding, the
identity of each stockholder and each Person who has any right to acquire
capital stock from such the Company and the number of shares of each class of
stock held by each Person or which such Person has the right to acquire from the
Company, all on an actual basis and fully-diluted basis as of the Effective
Time). The Company is a corporation duly organized, validly existing, and in
good standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under Applicable Contracts. The Company
is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to be so qualified would not have a material adverse effect
16
<PAGE> 21
on the assets, financial condition or results of operations of the Company.
(b) Attached as Schedule 4.1(b) are true and correct copies of the
Organizational Documents of the Company, as currently in effect.
(c) Set forth on Schedule 4.1(c) is a true and correct description
of all agreements, rights or other Contracts pursuant to which any Person has
the right to: (i) acquire from the Company, by purchase, exercise, exchange,
conversion or otherwise, any equity or other security of the Company or the
right to acquire any such security; (ii) cause the Company to register, under
the Securities Act or otherwise, any securities of the Company; or (iii) vote or
direct the voting of any class of capital stock of the Company or appoint any
member of the Company's board of directors.
Section 4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of the Company, enforceable against the Company in accordance with
its terms. The Company has the absolute and unrestricted right, power, authority
and capacity to execute and deliver this Agreement and to perform its
obligations hereunder.
(b) Except as set forth on Schedule 4.2(b), neither the execution
and delivery of this Agreement nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of the Organizational Documents of the Company, or (B) any
resolution adopted by the board of directors or the stockholders of the Company;
(ii) to Company's knowledge, contravene, conflict with, or
result in a violation of, or give any Governmental Body or other Person the
right to challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under, any Legal Requirement or any Order to which
the Company, or any of the assets owned or used by the Company, may be subject;
(iii) to Company's knowledge, contravene, conflict with, or
result in a violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or
modify, any Governmental Authorization that is held by the Company or that
otherwise relates to the business of, or any of the assets owned or used by, the
Company;
17
<PAGE> 22
(iv) to Company's knowledge, cause the Company to become
subject to, or to become liable for the payment of, any Tax;
(v) except as set forth on Schedule 4(b)(v), contravene,
conflict with, or result in a violation or breach of any provision of, or give
any Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any Applicable Contract to the extent any of the foregoing would have a material
adverse effect on the financial condition of the Company or the Company's
business operations; or
(vi) to Company's knowledge, result in the imposition or
creation of any Encumbrance upon or with respect to any of the assets owned or
used by the Company to the extent any of the foregoing would have a material
adverse effect on the financial condition of the Company or the Company's
business operations.
(c) Other than obtaining the requisite vote of the Shareholders,
the Company is not or will not be required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
Section 4.3 Capitalization. The authorized and outstanding equity
securities of the Company are as set forth on Schedule 4.1(a) hereto. Schedule
4.1(a) also sets forth whether or not Encumbrances on such equity securities
will be satisfied at or prior to the Closing. Except with regard to the
Shareholders Agreement, no legend or other reference to any purported
Encumbrance appears upon any certificate representing equity securities of the
Company. All of the outstanding equity securities of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, and no such
security was issued in violation of any preemptive right or other right to
subscribe to or purchase any securities of the Company. None of the outstanding
equity securities or other securities of the Company was issued in violation of
the Securities Act or any other Legal Requirement. The Company does not own, or
have any Contract to acquire, any equity securities or other securities of any
Person or any direct or indirect equity or ownership interest in any other
business.
Section 4.4 Financial Statements. The Company has delivered to MEMCO:
(a) a balance sheet of the Company as at December 31, 1994, and the related
statement of income, changes in stockholders' equity, and cash flow for each of
the prior fiscal years then ended, together with the report thereon of Kathryn
A. Woolley, CPA, independent certified public accountant; (b) a balance sheet of
the Company as at December 31, 1995 (including the notes thereto, the "Balance
Sheet"), and the related statement of
18
<PAGE> 23
income, changes in stockholders' equity, and cash flow for the fiscal year then
ended, together with the report thereon of Kathryn A. Woolley, CPA, independent
certified public accountant, and (c) an unaudited balance sheet of the Company
as at March 31, 1996 (the "Interim Balance Sheet") and the related unaudited
statement of income, changes in stockholders' equity, and cash flow for the
three months then ended. Such financial statements (and notes where applicable)
fairly present the financial condition and the results of operations, changes in
stockholders' equity, and cash flow of the Company as at the respective dates of
and for the periods referred to in such financial statements, all in accordance
with GAAP consistently applied throughout the periods involved, subject, in the
case of interim financial statements, to normal recurring year-end adjustments
(the effect of which will not, individually or in the aggregate, be materially
adverse) and the absence of notes (that, if presented, would not differ
materially from those included in the Balance Sheet). No financial statements of
any Person other than the Company are required by GAAP to be included in the
financial statement of the Company.
Section 4.5 Books and Records. Except as set forth on Schedule 4.5
hereto, the books of account, minute books, stock record books, and other
records of the Company, all of which have been made available to MEMCO, are
complete and correct and have been maintained in accordance with sound business
practices. The minute books of the Company contain accurate and complete records
of all meetings held of, and corporate action taken by, the stockholders, the
Boards of Directors, and committees of the Boards of Directors of the Company,
and no meeting of any such stockholders, Board of Directors, or committee in
which material matters have been acted upon has been held for which minutes have
not been prepared and are not contained in such minute books. At the Closing,
all of those books and records will be in the possession of the Company.
Section 4.6 Title to Properties; Encumbrances. Except as set forth on
Schedule 4.6 hereto, the Company does not own, directly or indirectly, any real
property. Set forth on Schedule 4.6 hereto is a complete and accurate list of
all real property leases, or other real property interests owned by the Company.
The Company owns all the properties and assets (whether real, personal, or mixed
and whether tangible or intangible) that it purports to own, including all of
the properties and assets reflected in the Balance Sheet and the Interim Balance
Sheet (except for assets held under capitalized leases disclosed on Schedule 4.6
and personal property sold since the date of the Balance Sheet and the Interim
Balance Sheet, as the case may be, in the Ordinary Course of Business), and all
of the properties and assets purchased or otherwise acquired by the Company
since the date of the Balance Sheet (except for personal property acquired and
sold since the date of the Balance Sheet in the Ordinary Course of Business and
consistent with past practice). All material properties and assets
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<PAGE> 24
reflected in the Balance Sheet and the Interim Balance Sheet are free and clear
of all Encumbrances except (a) mortgages or security interests shown on the
Balance Sheet or the Interim Balance Sheet as securing specified liabilities or
obligations, with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists, (b) mortgages or
security interests incurred in connection with the purchase of property or
assets after the date of the Interim Balance Sheet (such mortgages and security
interests being limited to the property or assets so acquired), with respect to
which no default (or event that, with notice or lapse of time or both, would
constitute a default) exists, and (c) liens for current taxes not yet due.
Section 4.7 Condition and Sufficiency of Assets. Set forth on Schedule
4.7 hereto is a complete and accurate list of all equipment owned or leased by
the Company with an acquisition cost of $1,000 or more (the "Equipment"),
showing whether each item is owned or leased. All items of Equipment are in good
operating condition and repair, and are adequate for the uses to which they are
being put, and none of such items is in need of maintenance or repairs except
for ordinary, routine maintenance and repairs that are not material in nature or
cost. The items of Equipment are sufficient for the continued conduct of the
Company's business immediately after the Closing in substantially the same
manner as conducted prior to the Closing.
Section 4.8 Accounts Receivable. All accounts receivable of the Company
that are reflected on the Balance Sheet or the Interim Balance Sheet or on the
accounting records of the Company as of the Closing Date (collectively, the
"Accounts Receivable") represent or will represent valid obligations arising
from sales actually made or services actually performed in the Ordinary Course
of Business. Unless paid prior to the Closing Date, the Accounts Receivable are
or will be as of the Closing Date collectible net of the respective reserves
shown on the Balance Sheet or the Interim Balance Sheet (which reserves are
adequate and calculated consistent with past practice). Subject to such
reserves, each of the Accounts Receivable either has been or will be collected
in an amount which is not less than 95% of the face amount of the receivable,
within 120 days after the day on which it first becomes due and payable. To the
Company's Knowledge, there is no material contest, claim, or right of set-off
under any Contract with any obligor of an Accounts Receivable relating to the
amount or validity of such Accounts Receivable. Set forth on Schedule 4.8 is a
complete and accurate list of all Accounts Receivable as of the date of the
Interim Balance Sheet, which list sets forth the aging of such Accounts
Receivable.
Section 4.9 Prepaid Supplies. Set forth on Schedule 4.9 is a complete
and accurate description of all prepaid supplies of the Company with a book
value of $100 or more (the "Prepaid Supplies"). The Prepaid Supplies, whether or
not reflected in the Balance Sheet
20
<PAGE> 25
or the Interim Balance Sheet, consists of a quality and quantity usable in the
Ordinary Course of Business. The quantities of Prepaid Supplies are not
excessive and are reasonable in the present circumstances of the Company.
Section 4.10 No Undisclosed Liabilities. Except as set forth on
Schedule 4.10, the Company has no liabilities or obligations of any nature
(whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved against
in the Balance Sheet or the Interim Balance Sheet and current liabilities
incurred in the Ordinary Course of Business since the date thereof.
Section 4.11 Taxes.
(a) The Company has filed or caused to be filed all income tax and
other material Tax Returns that are or were required to be filed by or with
respect to it, pursuant to applicable Legal Requirements. The Company has
delivered to MEMCO copies of, and Schedule 4.11 hereto contains a complete and
accurate list of, all such income tax and other material Tax Returns filed since
April 1, 1990. The Company has paid all Taxes due in respect of such tax
returns.
(b) No United States federal or state income Tax Return of the
Company has been audited by the IRS or relevant state tax authorities and all
such Tax Returns are closed by the applicable statute of limitations for all
taxable years through December 31, 1992. The Company has not given or been
requested to give waivers or extensions (or is or would be subject to a waiver
or extension given by any other Person) of any statute of limitations relating
to the payment of Taxes of the Company or for which the Company may be liable.
(c) The charges, accruals, and reserves with respect to Taxes on
the respective books of the Company are adequate (determined in accordance with
GAAP) and are at least equal to the Company's liability for Taxes. To the
Company's Knowledge, there exists no proposed tax assessment against the Company
except as disclosed in the Balance Sheet. No consent to the application of
Section 341(f)(2) of the IRC has been filed with respect to any property or
assets held, acquired, or to be acquired by the Company. All Taxes that the
Company is or was required by Legal Requirements to withhold or collect have
been duly withheld or collected and, to the extent required, have been paid to
the proper Governmental Body or other Person.
(d) To the Company's Knowledge, all income tax and other material
Tax Returns filed by (or that include on a consolidated basis) the Company are
true, correct, and complete. There is no tax sharing agreement that will require
any payment by the Company after the date of this Agreement. The Company is not,
or within
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the five-year period preceding the Closing Date has not been, an "S"
corporation.
Section 4.12 No Material Adverse Change. Since the date of the Balance
Sheet, there has not been any material adverse change in the business,
operations, properties, prospects, assets, or condition of the Company, and no
event has occurred or circumstance exists that may result in such a material
adverse change.
Section 4.13 Employee Benefits.
(a) As used in this Section 4.13, the following terms have the
meanings set forth below.
"COMPANY OTHER BENEFIT OBLIGATION" shall mean an Other Benefit
Obligation owed, adopted, or followed by the Company or an ERISA Affiliate of
the Company.
"COMPANY PLAN" shall mean all Plans of which the Company or an ERISA
Affiliate of the Company is or was a Plan Sponsor, or to which the Company or an
ERISA Affiliate of the Company otherwise contributes or has contributed, or in
which the Company or an ERISA Affiliate of the Company otherwise participates or
has participated. All references to Plans are to Company Plans unless the
context requires otherwise.
"COMPANY VEBA" shall mean a VEBA whose members include employees of the
Company or any ERISA Affiliate of the Company.
"ERISA AFFILIATE" shall mean, with respect to the Company, any other
person that, together with the Company, would be treated as a single employer
under IRC Section 414.
"MULTI-EMPLOYER PLAN" shall have the meaning set forth in ERISA Section
3(37)(A).
"OTHER BENEFIT OBLIGATIONS" shall mean all obligations, arrangements,
or customary practices, whether or not legally enforceable, to provide benefits,
other than salary, as compensation for services rendered, to present or former
directors, employees, or agents, other than obligations, arrangements, and
practices that are Plans. Other Benefit Obligations include consulting
agreements under which the compensation paid does not depend upon the amount of
service rendered, sabbatical policies, severance payment policies, and fringe
benefits within the meaning of IRC Section 132.
"PENSION PLAN" shall have the meaning set forth in ERISA Section
3(2)(A).
"PLAN" shall have the meaning set forth in ERISA Section 3(3).
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"PLAN SPONSOR" shall have the meaning set forth in ERISA Section
3(16)(B).
"QUALIFIED PLAN" shall mean any Plan that meets or purports to meet the
requirements of IRC Section 401(a).
"TITLE IV PLANS" shall mean all Pension Plans that are subject to Title
IV of ERISA, 29 U.S.C. Section 1301 et seq., other than Multi-Employer Plans.
"VEBA" shall mean a voluntary employees' beneficiary association under
IRC Section 501(c)(9).
"WELFARE PLAN" shall have the meaning set forth in ERISA Section
3(1).
(b) (i) Schedule 4.13(b)(i) contains a complete and accurate
list of all Company Plans, Company Other Benefit Obligations, and Company VEBAs,
and identifies as such all Company Plans that are (A) Qualified Plans or (B)
Title IV Plans. Neither the Company nor any ERISA Affiliate participates in or
has ever participated in or had any obligation to contribute to any defined
benefit Pension Plan or Multi-Employer Plan nor does the Company or any ERISA
Affiliate have any liability under Title IV of ERISA or Part 3 of Subtitle B of
Title I of ERISA in connection with any defined benefit Pension Plan or
Multi-Employer Plan.
(ii) Schedule 4.14(b)(ii) contains a complete and accurate
list of (A) all ERISA Affiliates of the Company, and (B) all Plans of which any
such ERISA Affiliate is or was a Plan Sponsor, in which any such ERISA Affiliate
participates or has participated, or to which any such ERISA Affiliate
contributes or has contributed.
(iii) The Company is not liable for post-retirement benefits.
(c) The Company has delivered to MEMCO:
(i) all documents that set forth the terms of each Company
Plan, Company Other Benefit Obligation, or Company VEBA and of any related
trust, including (A) all plan descriptions and summary plan descriptions of
Company Plans for which the Company is required to prepare, file, and distribute
plan descriptions and summary plan descriptions, and (B) all summaries and
descriptions furnished to participants and beneficiaries regarding Company
Plans, Company Other Benefit Obligations and Company VEBAs for which a plan
description or summary plan description is not required;
(ii) all personnel, payroll, and employment manuals and
policies;
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(iii) a written description of any Company Plan or Company
Other Benefit Obligation that is not otherwise in writing;
(iv) all insurance policies purchased by or to provide
benefits under any Company Plan;
(v) all reports submitted within the four years preceding the
date of this Agreement by third party administrators, actuaries, investment
managers, consultants, or other independent contractors with respect to any
Company Plan, Company Other Benefit Obligation, or Company VEBA;
(vi) all notifications to employees of their rights under
ERISA Section 601 et seq. and IRC Section 4980B;
(vii) the Form 5500 filed in each of the most recent three
plan years with respect to each Company Plan, including all schedules thereto
and the opinions of independent accountants;
(viii) all notices that were given by the IRS, the Pension
Benefit Guaranty Corporation (the "PBGC"), or the Department of Labor to the
Company, any ERISA Affiliate of the Company, or any Company Plan within the four
years preceding the date of this Agreement; and
(ix) with respect to Qualified Plans and VEBAs, the most
recent determination letter for each Plan of the Company that is a Qualified
Plan.
(d) Except as set forth on Schedule 4.13(d):
(i) The Company has performed in all material respects all of
its obligations under all Company Plans, Company Other Benefit Obligations and
Company VEBAs. The Company has made appropriate entries in their financial
records and statements for all obligations and liabilities under such Plans,
VEBAs and Obligations that have accrued but are not due.
(ii) To the knowledge of the Company, no statement, either
written or oral, has been made by the Company to any Person with regard to any
Plan or Other Benefit Obligation that was not in accordance with the Plan or
Other Benefit Obligation and that could have a material adverse economic
consequence to the Company or to MEMCO.
(iii) The Company, with respect to all Company Plans, Company
Other Benefits Obligations, and Company VEBAs, is, and each Company Plan,
Company Other Benefit Obligation, and Company VEBA is, in compliance in all
material respects with ERISA, the IRC, and other applicable Laws including the
provisions of such Laws expressly mentioned in this Section 4.13.
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(A) No non-exempt transaction prohibited by
ERISA Section 406 and no non-exempt "prohibited transaction" under IRC Section
4975(c) have occurred with respect to any Company Plan.
(B) To the knowledge of the Company, it has no
liability to the IRS with respect to any Plan, including any liability imposed
by Chapter 43 of the IRC.
(C) To the knowledge of the Company, it has no
liability to the PBGC with respect to any Plan or has any liability under ERISA
Section 502 or Section 4071.
(D) All filings required by ERISA and the IRC
as to each Plan have been timely filed, and all notices and disclosures to
participants required by either ERISA or the IRC have been timely provided.
(E) All contributions and payments made or
accrued with respect to all Company Plans, Company Other Benefit Obligations and
Company VEBAs are deductible under IRC Section 162 or Section 404. No amount, or
any asset of any Company Plan or Company VEBA, is subject to tax as unrelated
business taxable income.
(iv) Each Company Plan can be terminated without payment of
any additional contribution or amount and without the vesting or acceleration of
any benefits promised by such Plan.
(v) Since January 1, 1996, there has been no establishment or
amendment of any Company Plan, Company VEBA or Company Other Benefit Obligation.
(vi) To the knowledge of the Company, no event has occurred
or circumstance exists that could result in a material increase in premium costs
of Company Plans and Company Other Benefit Obligations that are insured, or a
material increase in benefit costs of such Plans and Obligations that are
self-insured.
(vii) Other than claims for benefits submitted by
participants or beneficiaries, no claim against, or legal proceeding involving,
any Company Plan, Company Other Benefit Obligation or Company VEBA or fiduciary
of the same is pending or, to the Knowledge of the Company, is Threatened.
(viii) No Company Plan is a stock bonus, pension, or
profit-sharing plan within the meaning of IRC Section 401(a).
(ix) To the knowledge of the Company: (A) each Qualified Plan
of the Company is qualified in form and operation under IRC Section 401(a); each
trust for each such Plan is exempt from federal income tax under IRC Section
501(a); and (B) no event has occurred or circumstance exists that will or could
give rise to
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disqualification or loss of tax-exempt status of any such Plan or trust.
(x) The Company and each ERISA Affiliate of the Company has
met the minimum funding standard, and has made all contributions required, under
ERISA Section 302 and IRC Section 412.
(xi) No Company Plan is subject to Title IV of ERISA.
(xii) Except to the extent required under ERISA Section 601
et seq. and IRC Section 4980B and applicable state law, the Company provides no
health or welfare benefits for any retired or former employee or is obligated to
provide health or welfare benefits to any active employee following such
employee's retirement or other termination of service.
(xiii) To the extent the Company provides any benefit to
retirees, it has the right to modify and terminate benefits to retirees (other
than pensions) with respect to both retired and active employees.
(xiv) The Company has complied with the provisions of ERISA
Section 601 et seq. and IRC Section 4980B in all material respects.
(xv) No payment that is owed or may become due to any
director, officer, employee, or agent of the Company will be non-deductible to
the Company or subject to tax under IRC Section 280G or Section 4999; nor will
the Company be required to "gross up" or otherwise compensate any such person
because of the imposition of any excise tax on a payment to such person.
(xvi) The consummation of the Contemplated Transactions will
not: (i) give rise to any liability or obligation of the Company pursuant to any
Company Plan; (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due under any Company Plan; (ii) cause any individual to
accrue or receive additional benefits, service or accelerated rights to payment
of benefits under any Company Plan; or (iv) directly or indirectly cause the
Company or any ERISA Affiliate to transfer or set aside any assets to fund or
otherwise provide for benefit for any individual.
Section 4.14 Compliance with Legal Requirements;
Governmental Authorizations.
(a) Except as set forth on Schedule 4.14(a):
(i) to Company's Knowledge, it is, and at all times since
December 31, 1994 has been, in compliance in all material respects with each
Legal Requirement that is or was applicable to
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it or to the conduct or operation of its business or the ownership or use of any
of its assets;
(ii) to Company's Knowledge, no event has occurred or
circumstance exists that (with or without notice or lapse of time) (A) may
constitute or result in a violation by the Company of, or a failure on the part
of the Company to comply in all material respects with, any Legal Requirement,
or (B) may give rise to any obligation on the part of the Company to undertake,
or to bear all or any portion of the cost of, any remedial action of any nature;
and
(iii) the Company has not received, at any time since
December 31, 1994, any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding (A) any actual or
alleged violation of, or failure to comply with, any Legal Requirement, or (B)
any actual or alleged obligation on the part of the Company to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature.
(b) Schedule 4.14(b) contains a complete and accurate list of each
Governmental Authorization that is held by the Company or that otherwise relates
to the business of, or to any of the assets owned or used by, the Company. Each
Governmental Authorization listed or required to be listed in Schedule 4.14(b)
is, to Company's Knowledge, valid and in full force and effect, and such
Governmental Authorizations collectively constitute all of the Governmental
Authorizations necessary to permit the Company to lawfully conduct and operate
its business in the manner it currently conducts and operates such business and
to permit the Company to own and use its assets in the manner in which it
currently owns and uses such assets.
Section 4.15 Legal Proceedings; Orders.
(a) There is no pending Proceeding that has been commenced by or
against the Company or that otherwise relates to or may affect the business of,
or any of the assets owned or used by, the Company or that challenges, or that
may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions. To the Knowledge of the
Company, except as set forth on Schedule 4.15, (1) no such Proceeding has been
Threatened, and (2) the Company has no Knowledge of any event that has occurred
or circumstance that exists that may give rise to or serve as a basis for the
commencement of any such Proceeding. The Company has delivered to MEMCO copies
of all pleadings, correspondence, and other documents relating to each
Proceeding listed on Schedule 4.15. The Proceedings listed on Schedule 4.15 will
not have a material adverse effect on the business, operations, assets,
condition, or prospects of the Company.
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(b) There is no Order to which the Company, or any of the assets
owned or used by the Company, is subject and no officer, director, agent, or
employee of the Company is subject to any Order that prohibits such officer,
director, agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of the Company.
Section 4.16 Absence of Certain Changes and Events. Except as set forth
on Schedule 4.16, since the date of the Interim Balance Sheet, the Company has
conducted its businesses only in the Ordinary Course of Business and there has
not been any:
(a) change in the Company's authorized or issued capital stock;
grant of any stock option or right to purchase shares of capital stock of the
Company; issuance of any security convertible into such capital stock; grant of
any registration rights; purchase, redemption, retirement, or other acquisition
by the Company of any shares of any such capital stock; or declaration or
payment of any dividend or other distribution or payment in respect of shares of
capital stock;
(b) amendment to the Organizational Documents of the Company;
(c) payment by the Company of any bonuses, or increase by the
Company in salaries or other compensation to any employee, or entry into any
employment, severance, or similar Contract with any director, officer, or
employee;
(d) adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or with any employees of the
Company;
(e) damage to or destruction or loss of any asset or property of
the Company, whether or not covered by insurance, materially and adversely
affecting the properties, assets, business, financial condition, or prospects of
the Company, taken as a whole;
(f) entry into, termination of, or receipt of notice of
termination of any license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement, or any Contract or transaction involving
a total remaining commitment by or to the Company of at least $50,000;
(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of the Company
or mortgage, pledge, or imposition of any lien or other encumbrance on any
material asset or property of the Company, including the sale, lease, or other
disposition of any of the Intellectual Property Assets;
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(h) cancellation or waiver of any claims or rights with a value to
the Company in excess of $50,000;
(i) material change in the accounting methods used by the Company;
or
(j) agreement, whether oral or written, by the Company to do any
of the foregoing.
Section 4.17 Contracts; No Defaults.
(a) Schedule 4.17(a) contains a complete and accurate list, and
the Company has delivered to MEMCO true and complete
copies, of:
(i) each Applicable Contract that involves performance of
services or delivery of goods or materials by the Company of an amount or value
in excess of $50,000, including and, in the case of any service contract entered
into by the Company, setting forth the following information: name and location
of institution; circumstances under which such contract may be terminated; term
of contract; and annual service charge;
(ii) each Applicable Contract that involves performance of
services or delivery of goods or materials to the Company of an amount or value
in excess of $50,000;
(iii) each Applicable Contract that was not entered into in
the Ordinary Course of Business and that involves expenditures or receipts of
the Company in excess of $50,000;
(iv) each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other Applicable Contract
affecting the ownership of, leasing of, title to, use of, or any leasehold or
other interest in, any real or personal property (except personal property
leases and installment and conditional sales agreements having a value per item
or aggregate payments of less than $25,000 and with terms of less than one
year);
(v) each licensing agreement or other Applicable Contract
with respect to patents, trademarks, copyrights, or other intellectual property,
including agreements with current or former employees, consultants, or
contractors regarding the appropriation or the non-disclosure of any of the
Intellectual Property Assets;
(vi) each joint venture, partnership, and other Applicable
Contract (however named) involving a sharing of profits, losses, costs, or
liabilities by the Company with any other Person;
(vii) each Applicable Contract containing covenants that in
any way purport to restrict the business activity of the
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Company or any Affiliate of the Company or limit the freedom of the Company or
any Affiliate of the Company to engage in any line of business or to compete
with any Person;
(viii) each Applicable Contract providing for payments to or
by any Person based on sales, purchases, or profits, other than direct payments
for goods;
(ix) each power of attorney that is currently effective and
outstanding;
(x) each Applicable Contract entered into other than in the
Ordinary Course of Business that contains or provides for an express undertaking
by the Company to be responsible for consequential damages;
(xi) each Applicable Contract for capital expenditures in
excess of $50,000;
(xii) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by the Company
other than in the Ordinary Course of Business; and
(xiii) each amendment, supplement, and modification (whether
oral or written) in respect of any of the foregoing.
(b) Except as set forth on Schedule 4.17(b), to Company's
Knowledge, no officer, director, agent, employee, consultant, or contractor of
the Company is bound by any Contract that purports to limit the ability of such
officer, director, agent, employee, consultant, or contractor to (A) engage in
or continue any conduct, activity, or practice relating to the business of the
Company, or (B) assign to the Company or to any other Person any rights to any
invention, improvement, or discovery.
(c) Each Contract identified or required to be identified on
Schedule 4.17(a) is in full force and effect and to Company's knowledge is valid
and enforceable in accordance with its terms. Except as set forth on Schedule
4.17(c) hereto:
(i) The Company is, and at all times since December 31, 1994
has been, in compliance in all material respects with all applicable terms and
requirements of each Contract under which the Company has or had any obligation
or liability or by which the Company or any of the assets owned or used by the
Company is or was bound;
(ii) each other Person that has or had any obligation or
liability under any Contract under which the Company has or had any rights is,
and at all times since December 31, 1994
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has been, in compliance in all material respects with all applicable terms and
requirements of such Contract;
(iii) to Company's Knowledge, no event has occurred or
circumstance exists that (with or without notice or lapse of time) may
contravene, conflict with, or result in a violation or breach of, or give the
Company or other Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to cancel, terminate,
or modify, any Applicable Contract; and
(iv) the Company has not given to or received from any other
Person, at any time since December 31, 1994, any notice or other communication
(whether oral or written) regarding any actual or alleged violation or breach
of, or default under, any Applicable Contract.
(d) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to the
Company under current or completed Contracts with any Person other than in the
Company's Ordinary Course of Business and, to the Knowledge of the Company, no
such Person has made written demand for such renegotiation.
(e) The Contracts relating to the sale, design, manufacture, or
provision of products or services by the Company have been entered into in the
Ordinary Course of Business and have been entered into without the commission of
any act alone or in concert with any other Person, or any consideration having
been paid or promised, that is or would be in violation of any Legal
Requirement.
(f) Except as set forth on Schedule 4.17(f), the Company has no
agreement, Contract or understanding, written or oral, with any Person
obligating the Company to proceed with any acquisition or to take any other
action. Any agreement, Contract or understanding set forth on Schedule 4.17(f)
may be terminated by the Company without penalty or cost to the Company.
Section 4.18 Insurance.
(a) The Company has delivered to MEMCO:
(i) true and complete copies of all policies of insurance to
which the Company is a party or under which the Company, or any director of the
Company in such director's capacity as a director of the Company, is or has been
covered at any time within the three years preceding the date of this Agreement;
(ii) true and complete copies of all pending applications for
policies of insurance; and
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(iii) any statement by the auditor of the Company's financial
statements with regard to the adequacy of such entity's coverage or of the
reserves for claims.
(b) Schedule 4.18(b) hereto describes:
(i) any self-insurance arrangement by or affecting the
Company, including any reserves established thereunder;
(ii) any contract or arrangement, other than a policy of
insurance, for the transfer or sharing of any risk by the Company; and
(iii) all obligations of the Company under Applicable
Contracts to third parties with respect to insurance (including such obligations
under leases and service agreements) and identifies the policy under which such
coverage is provided.
(c) Schedule 4.18(c) hereto sets forth, by year, for the current
policy year and each of the two preceding policy years:
(i) a summary of the loss experience under each policy for
liability, property or casualty insurance;
(ii) a statement describing each claim under an insurance
policy for an amount in excess of $25,000, which sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer, type of
insurance, and period of coverage; and
(C) the amount and a brief description of the claim; and
(iii) a statement describing the loss experience for all
claims that were self-insured, including the number and aggregate cost of such
claims.
(d) Except as set forth on Schedule 4.18(d) hereto:
(i) All policies to which the Company is a party or that
provide coverage to the Company, or any director or officer of the Company:
(A) to Company's Knowledge, are valid, outstanding, and
enforceable;
(B) to Company's Knowledge, are issued by an insurer
that is financially sound and reputable;
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(C) taken together, provide adequate insurance coverage
for the assets and the operations of the Company for all risks normally insured
against by a Person carrying on the same business or businesses as the Company;
(D) are sufficient for compliance with all Legal
Requirements (to Company's Knowledge) and Contracts to which the Company is a
party or by which any of them is bound;
(E) will not be terminated as a result of the
consummation of the Contemplated Transactions; and
(F) do not provide for any retrospective premium
adjustment or other experienced-based liability on the part of the Company,
exclusive of audit adjustments for workers compensation coverage.
(ii) The Company has not received (A) any refusal of coverage
or any notice that a defense will be afforded with reservation of rights, or (B)
any notice of cancellation or any other indication that any insurance policy is
no longer in full force or effect or will not be renewed or that the issuer of
any policy is not willing or able to perform its obligations thereunder.
(iii) The Company has paid all premiums due, and have
otherwise performed all of their respective obligations, under each policy to
which the Company is a party or that provides coverage to the Company or
director thereof.
(iv) The Company has given notice to the insurer of all
claims that may be insured thereby.
Section 4.19 Environmental Matters. Except as set forth on Schedule
4.19 hereto:
(a) To the Knowledge of the Company, it is, and at all times has
been, in full compliance with, and has not been and is not in violation of or
liable under, any Environmental Law. The Company has no basis to expect, nor has
any of them or any other Person for whose conduct they are or may be held to be
responsible received, any actual or Threatened order, notice, or other
communication from (i) any Governmental Body or private citizen acting in the
public interest, or (ii) the current or prior owner or operator of any
Facilities, of any actual or potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened obligation to undertake or
bear the cost of any Environmental, Health, and Safety Liabilities with respect
to any of the Facilities or any other properties or assets (whether real,
personal, or mixed) in which the Company has had an interest, or with respect to
any property or Facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred,
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imported, used, or processed by the Company, or any other Person for whose
conduct they are or may be held responsible, or from which Hazardous Materials
have been transported, treated, stored, handled, transferred, disposed,
recycled, or received.
(b) There are no pending or, to the Knowledge of the Company,
Threatened claims, Encumbrances or other restrictions of any nature resulting
from any Environmental, Health, and Safety Liabilities or arising under or
pursuant to any Environmental Law, with respect to or affecting any of the
Facilities or any other properties and assets (whether real, personal, or mixed)
in which the Company has or had an interest.
(c) The Company has no basis to expect, nor has it or any other
Person for whose conduct it is or may be held responsible, received, any
citation, directive, inquiry, notice, Order, summons, warning, or other
communication that relates to Hazardous Activity, Hazardous Materials, or any
alleged, actual, or potential violation or failure to comply with any
Environmental Law, or of any alleged, actual, or potential obligation to
undertake or bear the cost of any Environmental, Health, and Safety Liabilities
with respect to any of the Facilities or any other properties or assets (whether
real, personal, or mixed) in which the Company had an interest, or with respect
to any property or facility to which Hazardous Materials generated,
manufactured, refined, transferred, imported, used, or processed by the Company,
or any other Person for whose conduct they are or may be held responsible, have
been transported, treated, stored, handled, transferred, disposed, recycled, or
received.
(d) To the Knowledge of the Company, neither it, or any other
Person for whose conduct it is or may be held responsible, has any
Environmental, Health, and Safety Liabilities with respect to the Facilities or
with respect to any other properties and assets (whether real, personal, or
mixed) in which the Company (or any predecessor) has or had an interest, or at
any property geologically or hydrologically adjoining the Facilities or any such
other property or assets.
(e) There are no Hazardous Materials present on or in the
Environment at the Facilities or, to the Knowledge of the Company, at any
geologically or hydrologically adjoining property, including any Hazardous
Materials contained in barrels, above or underground storage tanks, landfills,
land deposits, dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land, water, sumps,
or any other part of the Facilities or such adjoining property, or incorporated
into any structure therein or thereon. To the Knowledge of the Company, neither
it or any other Person for whose conduct it is or may be held responsible, or
any other Person, has permitted or conducted, or is aware of, any Hazardous
Activity conducted with respect to the Facilities or any other
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properties or assets (whether real, personal, or mixed) in which the Company has
or had an interest except in full compliance with all applicable Environmental
Laws.
(f) To the Knowledge of the Company, there has been no Release or,
to the Knowledge of the Company, Threat of Release, of any Hazardous Materials
at or from the Facilities or at any other locations where any Hazardous
Materials were generated, manufactured, refined, transferred, produced,
imported, used, or processed from or by the Facilities, or from or by any other
properties and assets (whether real, personal, or mixed) in which the Company
has or had an interest, or any geologically or hydrologically adjoining
property, whether by the Company, or any other Person.
(g) The Company has delivered to MEMCO true and complete copies
and results of any reports, studies, analyses, tests, or monitoring possessed or
initiated by the Company pertaining to Hazardous Materials or Hazardous
Activities in, on, or under the Facilities, or concerning compliance by the
Company, or any other Person for whose conduct it is or may be held responsible,
with Environmental Laws.
Section 4.20 Employees.
(a) Except as set forth on Schedule 4.20, there has been provided
to MEMCO a complete and accurate list of the following information for each
employee or director of the Company, including each employee on leave of absence
or layoff status: employer; name; job title; current compensation paid or
payable and any change in compensation since December 31, 1995; vacation
accrued; and service credited for purposes of vesting and eligibility to
participate under the Company's pension, retirement, profit-sharing,
thrift-savings, deferred compensation, stock bonus, stock option, cash bonus,
employee stock ownership (including investment credit or payroll stock
ownership), severance pay, insurance, medical, welfare, or vacation plan, other
Employee Pension Benefit Plan or Employee Welfare Benefit Plan, or any other
employee benefit plan or any Director Plan.
(b) Except as set forth on Schedule 4.17(a), no employee or
director of the Company is a party to, or is otherwise bound by, any agreement
or arrangement, including any confidentiality, noncompetition, or proprietary
rights agreement, between such employee or director and any other Person
("Proprietary Rights Agreement") that in any way adversely affects or will
affect (i) the performance of his duties as an employee or director of the
Company, or (ii) the ability of the Company to conduct its business, including
any Proprietary Rights Agreement with the Company by any such employee or
director. To the Company's Knowledge, no officer or other key employee of the
Company intends to terminate his employment with the Company.
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(c) There has been provided to MEMCO a complete and accurate list
of the following information for each retired employee or director of the
Company, or their dependents, receiving benefits or scheduled to receive
benefits in the future: name, pension benefit, pension option election, retiree
medical insurance coverage, retiree life insurance coverage, and other benefits.
Section 4.21 Labor Relations; Compliance. The Company has not been or
is not a party to any collective bargaining or other labor Contract. There has
not been, there is not presently pending or existing, and there is not
Threatened, (a) any strike, slowdown, picketing, work stoppage, or employee
grievance process, (b) any Proceeding against or affecting the Company relating
to the alleged violation of any Legal Requirement pertaining to labor relations
or employment matters, including any charge or complaint filed by an employee or
union with the National Labor Relations Board, the Equal Employment Opportunity
Commission, or any comparable Governmental Body, organizational activity, or
other labor or employment dispute against or affecting the Company or its
premises, or (c) any application for certification of a collective bargaining
agent. No event has occurred or circumstance exists that could provide the basis
for any work stoppage or other labor dispute. There is no lockout of any
employees by the Company, and no such action is contemplated by the Company. The
Company has complied in all material respects with all Legal Requirements
relating to employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining, the payment of
social security and similar taxes, occupational safety and health, and plant
closing. The Company is not liable for the payment of any compensation, damages,
taxes, fines, penalties, or other amounts, however designated, for failure to
comply with any of the foregoing Legal Requirements.
Section 4.22 Intellectual Property.
(a) The term "Intellectual Property Assets" includes the following
to the extent owned, used or licensed by the Company as licensee or licensor:
(i) the name, "Memphis Clinical Laboratory, Inc.", all
fictional business names, trading names, registered and unregistered trademarks,
service marks, and applications (collectively, "Marks");
(ii) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents");
(iii) all copyrights in both published works and unpublished
works (collectively, "Copyrights");
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(iv) all rights in mask works, if any, (collectively, "Rights
in Mask Works"); and
(v) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process technology,
plans, drawings, and blue prints (collectively, "Trade Secrets").
(b) Agreements. Schedule 4.22(b) hereto contains a complete and
accurate list and summary description, including any royalties paid or received
by the Company, of all Contracts relating to the Intellectual Property Assets to
which the Company is a party or by which the Company is bound, except for any
license implied by the sale of a product and perpetual, paid-up licenses for
commonly available software programs with a value of less than $10,000 under
which the Company is the licensee. There are no outstanding and, to the
Company's Knowledge, no Threatened disputes or disagreements with respect to any
such agreement.
(c) Know-How Necessary for the Business
(i) The Intellectual Property Assets are all those necessary
for the operation of the Company's businesses as they are currently conducted.
Except as described on Schedule 4.22(c) hereto, the Company is the owner of all
right, title, and interest in and to each of the Intellectual Property Assets,
free and clear of all liens, security interests, charges, encumbrances,
equities, and other adverse claims, and has the right to use without payment to
a third party all of the Intellectual Property Assets.
(ii) Schedule 4.22(c)(ii) sets forth all current employees of
the Company who have executed a confidentiality agreement with the Company,
copies of the forms of which are attached to such Schedule.
(d) Trademarks
(i) Schedule 4.22(d) hereto contains a complete and accurate
list and summary description of all Marks. The Company is the owner of all
right, title, and interest in and to each of the Marks, free and clear of all
liens, security interests, charges, encumbrances, equities, and other adverse
claims.
(ii) All Marks that have been registered with the United
States Patent and Trademark Office are currently in compliance with all formal
legal requirements (including the timely post-registration filing of affidavits
of use and incontestability and renewal applications), are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within ninety days after the Closing Date.
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(iii) No Mark has been or is now involved in any opposition,
invalidation, or cancellation and, to the Company's Knowledge, no such action is
Threatened with the respect to any of the Marks.
(iv) To the Company's Knowledge, there is no potentially
interfering trademark or trademark application of any third party.
(v) No Mark is infringed or, to the Company's Knowledge, has
been challenged or threatened in any way. None of the Marks used by the Company
infringes or is alleged to infringe any trade name, trademark, or service mark
of any third party.
(vi) All products and materials containing a Mark bear the
proper federal registration notice where permitted by law.
(e) Trade Secrets
(i) With respect to each Trade Secret, the documentation
relating to such Trade Secret is current, accurate, and sufficient in detail and
content to conduct the business operations of the Company as presently
conducted.
(ii) The Company has taken reasonable precautions to protect
the secrecy, confidentiality, and value of their Trade Secrets.
(iii) The Company has good title and an absolute (but not
necessarily exclusive) right to use the Trade Secrets. To the Knowledge of the
Company, the Trade Secrets have not been used, divulged, or appropriated either
for the benefit of any Person (other than the Company) or to the detriment of
the Company. No Trade Secret is subject to any adverse claim or has been
challenged or threatened in any way.
Section 4.23 Certain Payments. Neither the Company nor any director,
officer, agent, or employee of the Company, or to the Knowledge of the Company
any other Person associated with or acting for or on behalf of the Company, has
directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment to any Person, private or public,
regardless of form, whether in money, property, or services (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured or (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of the Company or any Affiliate
of the Company, in each case in violation of any Legal Requirement, or (b)
established or maintained any fund or asset that has not been recorded in the
books and records of the Company.
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Section 4.24 Disclosure.
(a) No representation or warranty of the Company in this Agreement
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
(b) No notice given pursuant to Section 6.8 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading.
(c) Any material distributed to the Shareholders in connection
with the Merger, including the Merger Information Statement (and any amendments
or supplements thereto) will comply in all material respects with applicable
federal securities laws and laws of Tennessee and at the time that they or
amendments or supplements thereto, are filed with the SEC and are first
published or sent or given to holders of Shares, will not 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 made therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by the Company with respect to information
supplied by Unison or MEMCO for inclusion in the Merger Information Statement.
Section 4.25 Relationships with Related Persons. Except as set forth on
Schedule 4.25, no Shareholder or any Related Person of any Shareholder has, or
since December 31, 1994, has had, any interest in any property (whether real,
personal, or mixed and whether tangible or intangible), used in or pertaining to
the Company's business. No Shareholder or any Related Person of Shareholder is,
or since December 31, 1994 has owned (of record or as a beneficial owner) an
equity interest or any other financial or profit interest in, a Person that has
(i) had business dealings or a material financial interest in any transaction
with the Company or (ii) engaged in competition with the Company with respect to
any line of the products or services of the Company (a "Competing Business") in
any market presently served by the Company except for less than one percent of
the outstanding capital stock of any Competing Business that is publicly traded
on any recognized exchange or in the over-the-counter market. Except as set
forth on Schedule 4.25, no Shareholder or any Related Person of Shareholder is a
party to any Contract with, or has any claim or right against, the Company.
Section 4.26 Accounting Matters. The Company has not taken or agreed to
take any action or has knowledge of any fact or circumstances relating to the
Company that would prevent accounting for the Merger as a pooling-of-interests.
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Section 4.27 Brokers or Finders. None of the Shareholders, the Company
or their agents have incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement or the Contemplated
Transactions.
SECTION 5 REPRESENTATIONS AND WARRANTIES OF UNISON AND MEMCO
Each of Unison and MEMCO, as applicable, represent and warrant to the
Company as follows:
Section 5.1 Organization and Good Standing. Each of Unison and MEMCO is
a corporation duly organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation, with full corporate power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use and to perform all of
its obligations as required by its agreements and contracts. Each of Unison and
MEMCO is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on its
assets, financial condition or results of operations.
Section 5.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Unison and MEMCO, enforceable against each of them in accordance
with its terms. Each of Unison and MEMCO has the absolute and unrestricted
right, power, and authority to execute and deliver this Agreement and to perform
its obligations under this Agreement.
(b) Neither the execution and delivery of this Agreement by Unison
or MEMCO nor the consummation or performance of any of the Contemplated
Transactions by Unison or MEMCO will, directly or indirectly (with or without
notice or lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of the Organizational Documents of Unison or MEMCO, as
applicable, or (B) any resolution adopted by the board of directors or the
stockholders of Unison or MEMCO, as applicable;
(ii) to either Unison's or MEMCO's knowledge, contravene,
conflict with, or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under, any Legal Requirement or any
Order to which Unison or
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MEMCO, or any of the assets owned or used by Unison or MEMCO, may be subject; or
(iii) give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated Transactions.
(c) Neither Unison nor MEMCO is nor will be required to obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
Section 5.3 Certain Proceedings. There is no pending Proceeding that
has been commenced against Unison or MEMCO and that challenges, or may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions. To neither of Unison's or MEMCO's
Knowledge, no such Proceeding has been Threatened.
Section 5.4 SEC Documents; Financial Statements.
(a) Unison filed a registration statement on Form S-1 with the
SEC, which registration statement was declared effective by the SEC on December
18, 1995. At December 18, 1995, such registration statement did not 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 made therein, in
light of the circumstances under which they were made, not misleading. Since
December 18, 1995 Unison has filed all forms, reports and documents required to
be filed by it with the SEC pursuant to the Exchange Act and the SEC rules and
regulations thereunder, all of which as of their respective dates complied in
all material respects with all applicable requirements of the Exchange Act
(collectively, the "Unison SEC Documents"). None of the Unison SEC Documents,
including, without limitation, any financial statements or schedules included
therein, as of their respective dates contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The consolidated balance sheets and the related statements of
consolidated income, shareholders equity and cash flows (including the related
notes thereto) of Unison included in the Unison SEC Documents complied in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods (except as otherwise noted therein), and present
fairly the consolidated financial position of Unison and its consolidated
Subsidiaries as of their respective dates, and the consolidated results of their
operations and their cash flows for the periods presented therein (subject, in
the case
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of the unaudited interim financial statements, to normal year-end adjustments).
(c) Since the end of the period covered by the most recent
consolidated financial statements of Unison included in the Unison SEC
Documents, there has not been any material adverse change in the business,
operations or prospects of Unison or any of its consolidated Subsidiaries.
(d) Based on Unison's Knowledge, facts and circumstances do not
exist that require Unison to make SEC filings that have not been filed solely
for the reason that the due date for same is a future date, excepting from the
foregoing Unison's Form 10-Q for the quarter ended June 30, 1996.
Section 5.5 Information Supplied. No representation or warranty of
either Unison or MEMCO omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied by Unison or MEMCO in writing for inclusion in the Merger
Information Statement will at the respective times that the Merger Information
Statement, or any amendments or supplements thereto, is filed with the SEC and
is first published or sent or given to holders of Shareholders for the Company
Shareholders 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.
Section 5.6 Interim Operations of MEMCO. MEMCO was formed solely for
the purpose of engaging in the Contemplated Transactions, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
Section 5.7 Brokers or Finders. Except as set forth on Schedule 5.7,
neither Unison nor MEMCO and their respective officers and agents have incurred
any obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement. Unison and MEMCO will indemnify and hold the Company harmless from
any such payment alleged to be due by or through Unison or MEMCO as a result of
the action of Unison or MEMCO or its officers or agents.
Section 5.8 Disclosure.
(a) No representation or warranty of Unison or MEMCO in this
Agreement omits to state a material fact necessary to make the statements herein
or therein, in light of the circumstances in which they were made, not
misleading.
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(b) No notice given pursuant to Section 6.9 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading.
Section 5.9 Legal Proceedings; Orders. There is no pending Proceeding
that has been commenced by or against Unison or MEMCO or that otherwise relates
to or may materially adversely affect the business of, or any of the assets
owned or used by, Unison or MEMCO or that challenges, or that may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions. To the Knowledge of Unison and MEMCO, (1)
no such Proceeding has been Threatened, and (2) neither Unison nor MEMCO has any
Knowledge of any event that has occurred or circumstance that exists that may
give rise to or serve as a basis for the commencement of any such Proceeding.
Section 5.10 Capitalization. The authorized capital stock of Unison
consists solely of 10,000,000 shares of $.001 par value common stock and
1,000,000 shares of $.001 par value preferred stock, of which, as of the date
hereof, 3,900,312 shares of Unison Common Stock are issued and outstanding. All
such shares of Unison Common Stock been duly authorized and validly issued, are
fully paid and non-assessable and were not issued in violation of any preemptive
right.
Section 5.11 Merger Consideration. All shares of Unison Common Stock to
be issued in the Merger upon issuance will be duly authorized and validly
issued, fully paid and non-assessable and not issued in violation of any
preemptive right.
SECTION 6 FURTHER COVENANTS PRIOR TO CLOSING DATE
Section 6.1 Access and Investigation. Between the date of this
Agreement and the Closing Date, the Company will, (a) afford Unison, MEMCO and
their Representatives and prospective lenders and their Representatives
(collectively, "MEMCO's Advisors") reasonable access to the Company's personnel,
properties (including subsurface testing), contracts, books and records, and
other documents and data, (b) furnish Unison, MEMCO and MEMCO's Advisors with
copies of all such contracts, books and records, and other existing documents
and data as Unison or MEMCO may reasonably request, and (c) furnish Unison,
MEMCO and MEMCO's Advisors with such additional financial, operating, and other
data and information as they may reasonably request.
Section 6.2 Operation of the Businesses of the Company.
Between the date of this Agreement and the Closing Date, the Company
will:
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(a) conduct its business only in the Ordinary Course of Business;
(b) use its Best Efforts to preserve intact the current business
organization of the Company, keep available the services of the current
officers, employees, and agents of the Company, and maintain the relations and
good will with suppliers, customers, landlords, creditors, employees, agents,
and others having business relationships with the Company;
(c) confer with Unison and MEMCO concerning operational matters of
a material nature; and
(d) otherwise report periodically to Unison and MEMCO concerning
the status of the business, operations, and finances of the Company.
Section 6.3 Negative Covenant. Except as otherwise expressly permitted
by this Agreement, between the date of this Agreement and the Closing Date, the
Company will not, without the prior written consent of Unison and MEMCO, take
any affirmative action, or fail to take any reasonable action within its
control, as a result of which any of the changes or events listed in Section
4.16 is likely to occur.
Section 6.4 Required Approvals. As promptly as practicable after the
date of this Agreement, the Company will, make all filings required by Legal
Requirements to be made by it in order to consummate the Contemplated
Transactions. Between the date of this Agreement and the Closing Date, the
Company will cooperate with Unison and MEMCO with respect to all filings that
Unison or MEMCO elects to make or is required by Legal Requirements to make in
connection with the Contemplated Transactions.
Section 6.5 Shareholders' Meeting, Merger Information
Statement and Registration Statement.
(a) As soon as reasonably practicable after the date hereof:
(i) the Company shall duly call, give notice of, convene and
hold a special meeting of the Shareholders (the "Company Shareholders Meeting"),
to be held as soon as practicable after the date hereof, or act by unanimous
written consent, for the purpose of considering and taking action upon the
Merger; and
(ii) the Company shall prepare in accordance with the
applicable provisions of the federal securities laws and Tennessee laws an
information statement with respect to the Merger and the Contemplated
Transactions (the "Merger Information Statement").
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(b) the Company shall use its Best Efforts (i) to obtain and
furnish the information required to be included by it in the Merger Information
Statement and, after consultation with MEMCO and Unison, respond promptly to any
comments made by the SEC with respect to the Merger Information Statement and
any preliminary version thereof and cause the Merger Information Statement to be
mailed to the Shareholders at the earliest practicable time after the date
hereof (subject to the effectiveness of the Registration Statement, as defined
in Section 6.5(d)) and (ii) obtain the necessary approval by the Shareholders of
this Agreement and the transactions contemplated hereby unless there exists at
such time a proposal for a Third Party Acquisition and in the judgment of the
Board of Directors of the Company after consultation with Company counsel,
obtaining such approvals would be a breach of its fiduciary duties to the
Shareholders or other constituencies under applicable law.
(c) Mr. W. Jerome McGee, Mr. Harold N. McKinney and Mr. John
Maguire shall indemnify and hold harmless Unison, MEMCO and their respective
directors, officers, employees, agents and other representatives (each, a
"Unison Indemnified Party") against any losses, claims, damages or liabilities,
joint or several, to which such Unison Indemnified Party may become subject
under the Securities Act, Exchange Act or applicable state law, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue
statement of any material fact contained in the Registration Statement or Merger
Information Statement, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, in light of the circumstances in which they
were made, not misleading which statements or omissions were furnished to Unison
or MEMCO, directly or indirectly through the Company, by such Shareholders
specifically for use in preparation of the Registration Statement and/or Merger
Information Statement.
(d) Unison shall prepare a registration statement on Form S-4 and
any required amendments thereto (the "Registration Statement"), of which the
Merger Information Statement shall be a part, under the Securities Act with
respect to the shares of Unison Common Stock to be issued pursuant to the Merger
and file the Registration Statement with the SEC as soon as reasonably
practicable after the date hereof. Unison shall comply with the requirements of
the Securities Act, the Exchange Act and the rules and regulations of the SEC
under such acts applicable to the offering and sale of Unison Common Stock in
connection with the Merger. Unison shall use its Best Efforts to cause the
Registration Statement to become effective as promptly as reasonably practicable
and shall take any action required under applicable federal or state securities
laws in connection with the issuance of Unison Common Stock pursuant to the
Merger.
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(e) Unison shall indemnify and hold harmless John L. Maguire, the
Company and its directors, officers, employees, agents and other representatives
(each, a "Company Indemnified Party") against any losses, claims, damages or
liabilities, joint or several, to which such Company Indemnified Party may
become subject under the Securities Act, Exchange Act or applicable state law,
insofar as such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement of any material fact contained in the Registration
Statement or Merger Information Statement, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein, in light of the
circumstances in which they were made, not misleading which statements or
omissions were furnished to the Company by Unison specifically for use in
preparation of the Registration Statement and/or Merger Information Statement.
(f) If either Unison or the Company shall reasonably request to
include in the Merger Information Statement or omit therefrom any statement in
order that the Merger Information Statement will not include any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, the Merger Information Statement shall not be mailed to the
Shareholders without the mutual agreement of counsel for the Company and Unison
that such statement need not be included in or need not be omitted from the
Merger Information Statement.
(g) Each party shall furnish to the other such information
relating to it and its affiliates and the transactions contemplated by this
Agreement and such further and supplemental information as may be necessary or
as may be reasonably requested by the other party, in light of developments
occurring after the date hereof, to ensure that the statements regarding the
parties hereto and their affiliates and such transactions contained in the
Merger Information Statement, as so supplemented, will not on the effective date
of the Registration Statement or the date of the Company Shareholders Meeting
(or action by unanimous written consent in lieu of such meeting) or the
Effective Time include any untrue statement of a material fact or omit to state
a material fact required to be stated therein in order to make the statements
therein not misleading.
Section 6.6 Agreements of Affiliates. As soon as reasonably practicable
after the date hereof and in any event not later than five business days prior
to the effective date of the Registration Statement (as anticipated by counsel
to Unison and MEMCO), the Company shall deliver to Unison a letter identifying
all Persons who are anticipated to be at the time of the vote on the Merger
"affiliates" of the Company for purposes of Rule 145 under the Securities Act or
otherwise applicable SEC accounting releases with respect to pooling-of-interest
accounting treatment.
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The Company shall use its best efforts to cause each Person who is identified as
an "affiliate" in the letter referred to above to deliver to the Company not
later than five business days prior to the effective date of the Registration
Statement (as anticipated by counsel to Unison and MEMCO) a written agreement in
the form of Exhibit 6.6 (the "Affiliate Agreements").
Section 6.7 Delivery of Disclosure Schedules. The parties acknowledge
that this Agreement will be executed and delivered prior to the delivery of the
Disclosure Schedules and the delivery of schedules by Unison and MEMCO pursuant
to Section 5 (the "Section 5 Schedules"). The Company agrees to deliver the
Disclosure Schedules to Unison and MEMCO, and each of Unison and MEMCO agree to
deliver the Section 5 Schedules, as applicable, to the Company, within two weeks
from the date hereof. The parties agree that except for the obligations arising
out of Section 10.1 and Section 10.3, which survive termination of this
Agreement, (a) Unison and MEMCO shall each have the right to terminate this
Agreement (i) if the Disclosure Schedules shall not have been timely delivered
or (ii) if such Disclosure Schedules have been timely delivered but contain, in
the aggregate, disclosure of matters which would, or Unison or MEMCO reasonably
determines may, materially adversely effect the business, operations or
prospects of the Company, and (b) the Company shall have the right to terminate
this Agreement (i) if the Section 5 Schedules shall not have been timely
delivered or (ii) if such Section 5 Schedules have been timely delivered but
contain, in the aggregate, disclosure of matters which would or the Company
reasonably determines may materially adversely effect the business, operations
or prospects of Unison and its consolidated Subsidiaries as a whole.
Section 6.8 Notification by the Company. Between the date of this
Agreement and the Closing Date, the Company will promptly notify Unison and
MEMCO in writing if the Company becomes aware of any fact or condition that
causes or constitutes a Breach of any of the Company's representations and
warranties as of the date of this Agreement or if the Company becomes aware of
the occurrence after the date of this Agreement of any fact or condition that
would (except as expressly contemplated by this Agreement) cause or constitute a
Breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in the
Disclosure Schedules if the Disclosure Schedules were dated the date of the
occurrence or discovery of any such fact or condition, the Company will promptly
deliver to Unison and MEMCO a supplement to the Disclosure Schedules specifying
such change. During the same period, the Company will promptly notify Unison and
MEMCO of the occurrence of any Breach of any covenant of the Company in this
Section 6 or of the occurrence of any event that may make the satisfaction of
the conditions in Section 7 impossible or unlikely.
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Section 6.9 Notification by Unison or MEMCO. Between the date of this
Agreement and the Closing Date, Unison or MEMCO, as applicable, will promptly
notify the Company in writing if it becomes aware of any fact or condition that
causes or constitutes a Breach of any of its representations and warranties as
of the date of this Agreement, or if it becomes aware of the occurrence after
the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a Breach of any
such representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. Should any
such fact or condition require any change in the Section 5 Schedules if the
Section 5 Schedules were dated the date of the occurrence or discovery of any
such fact or condition, Unison or MEMCO, as applicable, will promptly deliver to
the Company a supplement to the Section 5 Schedules specifying such change.
During the same period, Unison or MEMCO, as applicable, will promptly notify the
Company of the occurrence of any Breach of any covenant of Unison or MEMCO in
this Section 6 or of the occurrence of any event that may make the satisfaction
of the conditions in Section 8 impossible or unlikely.
Section 6.10 No Negotiation. Until such time, if any, as this Agreement
is terminated pursuant to Section 9, the Company will not, and will cause each
of its Representatives not to, directly or indirectly solicit, initiate, or
encourage any inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any unsolicited
inquiries or proposals from, any Person (other than Unison and MEMCO) relating
to any transaction involving the sale of the business or assets (other than in
the Ordinary Course of Business) of the Company, or any of the capital stock of
the Company, or any merger, consolidation, business combination, or similar
transaction involving the Company. Notwithstanding the foregoing, (i) the
Company may participate in discussions with, and may furnish information to any
third party which seeks to engage in discussions or requests such information,
if, in either case, the Board of Directors of the Company determines, based on
the advice of Tracy & Holland, L.L.P. or other legal counsel reasonably
acceptable to Unison ("Legal Counsel"), that failing to engage in such
discussions or to provide such information would reasonably be expected to
violate the fiduciary duties of the Board of Directors of the Company to the
Shareholders, and (ii) the Board of Directors of the Company may take and
disclose to Shareholders a position contemplated by Rules 14d-9 and 14e-2
promulgated under the Exchange Act with respect to any tender offer and may make
such disclosure to the Shareholders as may be required under applicable law.
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<PAGE> 53
Section 6.11 Pooling-of-Interests. Each of the Company, Unison and
MEMCO shall use its Best Efforts (i) to cause the Merger to qualify, and shall
not take any actions which could prevent the Merger from qualifying, for
pooling-of-interests accounting treatment and (ii) to obtain a letter from
Kathryn A. Woolley, CPA regarding actions taken by the Company which could
prevent the Merger from qualifying, for pooling-of-interests accounting
treatment.
Section 6.12 Nasdaq Listing. Unison shall use its Best Efforts to list,
prior to the Effective Time, on the Nasdaq National Market, subject to official
notice of issuance, the shares of Unison Common Stock to be issued to the
Shareholders in the Merger.
Section 6.13 Approvals of Governmental Bodies. As promptly as
practicable after the date of this Agreement, Unison and MEMCO will, and will
cause each of its Related Persons to, make all filings required by Legal
Requirements to be made by them to consummate the Contemplated Transactions.
Between the date of this Agreement and the Closing Date, Unison and MEMCO will,
and will cause each Related Person to, cooperate with the Company with respect
to all filings that the Company is required by Legal Requirements to make in
connection with the Contemplated Transactions, and (ii) cooperate with the
Company in obtaining all consents identified on Schedule 4.2(b); provided that
this Agreement will not require Unison or MEMCO to dispose of or make any change
in any portion of its business or to incur any other burden to obtain a
Governmental Authorization.
Section 6.14 Best Efforts. Between the date of this Agreement and the
Closing Date, the Company, Unison and MEMCO will use their Best Efforts to cause
the conditions in Sections 7 and 8 to be satisfied, except, with respect to
Unison and MEMCO, as set forth in the proviso to Section 6.13.
SECTION 7 CONDITIONS PRECEDENT TO UNISON'S AND MEMCO'S
OBLIGATION TO CLOSE
Unison's and MEMCO's obligation to consummate the Merger and to take
the other actions required to be taken by Unison and MEMCO at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Unison or MEMCO, in whole or
in part):
Section 7.1 Accuracy of Representations. Each of the Company's
representations and warranties set forth in Section 4 of this Agreement shall
have been accurate in all material respects as of the date of this Agreement,
and shall be accurate in all material respects as of the Closing Date as if made
on the Closing Date.
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Section 7.2 Company's Performance. Each of the covenants and
obligations that the Company is required to perform or to comply with pursuant
to this Agreement at or prior to the Closing shall have been duly performed and
complied with in all material respects.
Section 7.3 Shareholder Approval. This Agreement and the Merger shall
have been duly approved by the Shareholders of the Company in accordance with
applicable law, the articles of incorporation and by-laws of the Company and the
Shareholders Agreement.
Section 7.4 Board Approval. This Agreement and the Merger shall have
been duly approved by the Board of Directors of each of Unison and MEMCO in
accordance with applicable law and the respective certificates of incorporation
and by-laws of Unison and MEMCO.
Section 7.5 Effectiveness of Registration Statement. The Registration
Statement shall have been declared effective by the SEC, no stop order with
respect thereto shall be in effect, and no proceedings for that purpose shall
have been initiated or threatened by the SEC.
Section 7.6 Listing Approval. The shares of Unison Common Stock to be
issued in the Merger shall have been approved for listing on the Nasdaq National
Market subject to official notice of issuance.
Section 7.7 Consents. Each Consent required under the Contracts set
forth on Schedule 4.2(b) shall have been obtained and shall be in full force and
effect.
Section 7.8 Additional Documents. Each of the following documents shall
have been delivered to Unison and MEMCO:
(a) an opinion of Tracy & Holland, L.L.P., dated the Closing
Date, in the form of Exhibit 7.8(a);
(b) a certificate of the Secretary of State of the State of
Tennessee as to the legal existence and good standing (including Tax) of the
Company in Tennessee;
(c) certificates of appropriate governmental officials in each
state in which the Company is required to qualify to do business as a foreign
corporation as to the due qualification and good standing of the Company in each
such jurisdiction;
(d) a certificate of the secretary of the Company attesting to
the incumbency of the officers, the authenticity of the board of directors and
shareholder resolutions authorizing the Contemplated Transactions, and the
authenticity and continuing
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validity of the Organizational Documents delivered pursuant to Section 4.1(b);
(e) such other documents as Unison or MEMCO may reasonably
request for the purpose of (i) enabling its counsel to provide the opinion
referred to in Section 8.8(a), (ii) evidencing the accuracy of any of the
Company's representations and warranties, (iii) evidencing the performance by
the Company of, or the compliance by the Company with, any covenant or
obligation required to be performed or complied with by the Company, (iv)
evidencing the satisfaction of any condition referred to in this Section 7, or
(v) otherwise facilitating the consummation or performance of any of the
Contemplated Transactions;
(f) evidence reasonably satisfactory to Unison and MEMCO that
the Encumbrances set forth on Schedule 4.1(a) which are to be discharged have
been discharged;
(g) evidence reasonably satisfactory to Unison and MEMCO of
compliance with, or a waiver of compliance with, the requirements of the
Shareholders Agreement;
(h) in the event the Interim Balance Sheet is as at a date
more than 45 days prior to the Closing Date, an unaudited consolidated balance
sheet of the Company as at a date not less than 45 days prior to the Closing
Date prepared in compliance with the requirements in Section 4.4 for the Interim
Balance Sheet, which unaudited consolidated balance sheet of the Company shall
be deemed an Interim Balance Sheet for all purposes under this Agreement; and
(i) the letters of affiliates of the Company pursuant to
Section 6.6.
Section 7.9 No Proceedings. Since the date of this Agreement, there
must not have been commenced or Threatened against Unison or MEMCO, or against
any Person affiliated with Unison or MEMCO, any Proceeding (a) involving any
challenge to, or seeking damages or other relief in connection with, any of the
Contemplated Transactions, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the Contemplated
Transactions.
Section 7.10 No Claim Regarding Stock Ownership or Merger
Consideration.
Other than rights of Shareholders hereunder, there must not have been
made or Threatened by any Person any claim asserting that such Person (a) is the
holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any stock of, or any other voting, equity, or ownership
interest in, the Company, or (b) is entitled to all or any portion of the cash,
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assets or other property to be distributed to Shareholders pursuant to Section 3
hereof.
Section 7.11 No Prohibition. Neither the consummation nor the
performance of any of the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time), materially contravene, or conflict
with, or result in a material violation of, or cause Unison or MEMCO or any
Person affiliated with Unison or MEMCO to suffer any material adverse
consequence under, (a) any applicable Legal Requirement or Order, or (b) any
Legal Requirement or Order that has been published, introduced, or otherwise
formally proposed by or before any Governmental Body.
Section 7.12 Termination of Agreements. All agreements, Contracts and
understandings set forth on Schedule 4.1(c) shall have been terminated with no
further liability or obligation of the Company.
Section 7.13 Agreement for Merger of Labco and Ampro.
Unison, Labco and Ampro shall have completed, but for the Closing, the
merger of Labco with and into Ampro.
SECTION 8 CONDITIONS PRECEDENT TO COMPANY'S OBLIGATION TO CLOSE
The Company's obligation to consummate the Merger and to take the other
actions required to be taken by the Company at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by the Company, in whole or in part):
Section 8.1 Accuracy of Representations. Each of Unison's and MEMCO's
representations and warranties set forth in Section 5 of this Agreement shall
have been accurate in all material respects as of the date of this Agreement and
shall be accurate in all material respects as of the Closing Date as if made on
the Closing Date.
Section 8.2 Unison's and MEMCO's Performance. Each covenant and
obligation that Unison or MEMCO is required to perform or to comply with
pursuant to this Agreement at or prior to the Closing shall have been performed
and complied with in all material respects.
Section 8.3 Board Approval. This Agreement and the Merger shall have
been duly approved by the Board of Directors of each of Unison and MEMCO in
accordance with applicable law and the respective certificates of incorporation
and by-laws of Unison and MEMCO.
Section 8.4 Shareholder Approval. This Agreement and the Merger shall
have been duly approved by the Shareholders in
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accordance with applicable law and the articles of incorporation and by-laws of
the Company and the Shareholders Agreement.
Section 8.5 Effectiveness of Registration Statement. The Registration
Statement shall have been declared effective by the SEC, no stop order with
respect thereto shall be in effect, and no proceedings for that purpose shall
have been initiated or threatened by the SEC.
Section 8.6 Listing Approval. The shares of Unison Common Stock to be
issued in the Merger shall have been approved for listing on the Nasdaq National
Market subject to official notice of issuance.
Section 8.7 Consents. Each of the Consents required by the Contracts
set forth on Schedule 4.2(b) shall have been obtained and shall be in full force
and effect.
Section 8.8 Additional Documents. Unison or MEMCO must have caused the
following documents to be delivered to :
(a) an opinion of Quarles & Brady, dated the Closing Date, in
the form of Exhibit 8.8(a);
(b) a certificate of the Secretary of State of the State of
Delaware as to the legal existence and good standing (including Tax) of Unison
in Delaware;
(c) a certificate of the Secretary of State of the State of
Delaware as to the legal existence and good standing (including Tax) of MEMCO in
Delaware;
(d) a certificate of the secretary of Unison attesting to the
incumbency of the officers, the authenticity of the board of directors and
shareholder resolutions authorizing the Contemplated Transactions;
(e) a certificate of the secretary of MEMCO attesting to the
incumbency of the officers, the authenticity of the board of directors and
shareholder resolutions authorizing the Contemplated Transactions; and
(f) such other documents as the Company may reasonably request
for the purpose of (i) enabling their counsel to provide the opinion referred to
in Section 7.8(a), (ii) evidencing the accuracy of any representation or
warranty of Unison or MEMCO, (iii) evidencing the performance by Unison or MEMCO
of, or the compliance by Unison or MEMCO with, any covenant or obligation
required to be performed or complied with by Unison or MEMCO, as applicable,
(ii) evidencing the satisfaction of any condition referred to in this Section 8,
or (v) otherwise facilitating the consummation of any of the Contemplated
Transactions.
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Section 8.9 No Proceeding. Since the date of this Agreement, there must
not have been commenced or Threatened against Unison or MEMCO, or against any
Person affiliated with Unison or MEMCO, any Proceeding (a) involving any
challenge to, or seeking damages or other relief in connection with, any of the
Contemplated Transactions, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the Contemplated
Transactions.
Section 8.10 No Prohibition. Neither the consummation nor the
performance of any of the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time), materially contravene, or conflict
with, or result in a material violation of, or cause the Company or any Person
affiliated with the Company to suffer any material adverse consequence under,
(a) any applicable Legal Requirement or Order, or (b) any Legal Requirement or
Order that has been published, introduced, or otherwise formally proposed by or
before any Governmental Body.
Section 8.11 Agreement for Merger of Labco and Ampro.
Unison, Labco and Ampro shall have completed, but for the Closing, the
merger of Labco with and into Ampro.
SECTION 9 TERMINATION
Section 9.1 Termination Events. This Agreement may, by notice given
prior to or at the Closing, be terminated:
(a) by failure of the Closing to take place on or prior to the
date set for Closing in Section 2.5, subject to the provisions of Section
9.1(f);
(b) by either Unison, MEMCO or the Company if a material
Breach of any provision of this Agreement has been committed by the other party
and such Breach has not been waived;
(c) by Unison or MEMCO if any of the conditions in Section 7
has not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of Unison or
MEMCO to comply with its respective obligations under this Agreement) and
neither Unison nor MEMCO has waived such condition on or before the Closing
Date;
(d) by Unison or MEMCO if the Board of Directors of the
Company withdraws or materially modifies or changes its favorable recommendation
of this Agreement or the Merger;
(e) by the Company, if any of the conditions in Section 8 has
not been satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of the Company to
comply with its obligations under
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this Agreement) and the Company has not waived such condition on or before the
Closing Date;
(f) by the Company, if the Board of Directors of the Company
withdraws or materially modifies or changes its favorable recommendation of this
Agreement or the Merger if there exists at such time a proposal for a Third
Party Acquisition and the Board of Directors of the Company after consultation
with Company counsel determines that the failure to take such action would be a
breach of the fiduciary duties to the Company's shareholders or other
constituencies under applicable law; provided, however, that such termination
under this Section 9.1(f) shall not be effective until the Company has made
payment to Unison of the Transaction Expenses required to be paid pursuant to
Section 9.2;
(g) by mutual consent of MEMCO and the Company; or
(h) by either MEMCO or the Company if the Closing has not
occurred (other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before October 30, 1996, or such later date as the parties may agree upon.
Section 9.2 Special Fees.
(a) In the event that:
(i) this Agreement shall have been terminated
pursuant to Section 9.1(d) or Section 9.1(f) and within 9 months of such
termination: (x) a Third Party Acquisition shall occur, or (y) there is a letter
of intent or similar instrument or other agreement between the Company and a
Third Party for a Third Party Acquisition, or a public announcement by the
Company of the Company's intention or plans to effect a Third Party Acquisition;
or
(ii) any Person (other than Unison or an affiliate of
Unison) shall have commenced, publicly proposed or communicated to the Company a
proposal that is publicly disclosed for a tender or exchange offer for more than
20% (or which, assuming the maximum amount of securities which could be
purchased, would result in any Person beneficially owning more than 20%) of the
then outstanding Shares or otherwise for the direct or indirect acquisition of
the Company or all or substantially all of its assets for consideration having a
value greater than the consideration to be delivered pursuant to this Agreement,
and this Agreement shall have been terminated pursuant to Section 9.1(d) or
Section 9.1(f); or
(iii) this Agreement is terminated pursuant to
Section 9.1(f),
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then, in any such event, the Company shall promptly pay Unison (but in no event
later than five business days after the first of such events shall have
occurred) the Transaction Expenses.
(b) Unison shall have the right to make more than one request
for payment of Transaction Expenses, subject to the limitation on total
Transaction Expenses. In the event the Company shall fail to pay invoiced
Transaction Expenses within five days of receipt of an invoice therefor from
Unison, the term "Transaction Expenses" shall be deemed to include the costs and
expenses actually incurred or accrued by Unison and MEMCO (including, without
limitation, fees and expenses of counsel) in connection with the collection
under and enforcement of Section 9.1(f), together with interest on such unpaid
Transaction Expenses, commencing on the date that the Transaction Expenses were
paid, at a rate equal to the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York, from time to time, in the City of New York,
as such bank's Prime Rate plus 1.00%.
Section 9.3 Effect of Termination. Each party's right of termination
under Section 9.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies. If this Agreement is terminated pursuant to Section
9.1, all further obligations of the parties under this Agreement will terminate,
except that the obligations in Sections 10.1 and 10.3 will survive; provided,
however, that if this Agreement is terminated by a party because of the Breach
of the Agreement by the other party or because one or more of the conditions to
the terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
SECTION 10 GENERAL PROVISIONS
Section 10.1 Expenses. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
Section 10.2 Public Announcements. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, at such time and in such manner as MEMCO and the Company
determine. Unless consented to by MEMCO in advance or required by Legal
Requirements, prior to the Closing the Company shall keep this Agreement
strictly
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confidential and may not make any disclosure of this Agreement to any Person.
The Company and MEMCO will consult with each other concerning the means by which
the Company's employees, customers, and suppliers and others having dealings
with the Company will be informed of the Contemplated Transactions, and MEMCO
will have the right to be present for any such communication.
Section 10.3 Confidentiality.
(a) Between the date of this Agreement and the Closing Date,
Unison, MEMCO and the Company will maintain in confidence, and will cause the
directors, officers, employees, agents, and advisors of Unison, MEMCO and the
Company to maintain in confidence, and not use to the detriment of another party
any written, oral, or other information obtained in confidence from another
party in connection with this Agreement or the Contemplated Transactions, unless
(i) such information is already known to such party or to others not bound by a
duty of confidentiality or such information becomes publicly available through
no fault of such party, (ii) the use of such information is necessary or
appropriate in making any filing or obtaining any consent or approval required
for the consummation of the Contemplated Transactions, or (iii) the furnishing
or use of such information is required by or necessary or appropriate in
connection with legal proceedings.
(b) If the Contemplated Transactions are not consummated: (i)
each party will return or destroy as much of such written information as the
other party may reasonably request; and (ii) Unison, MEMCO and their respective
Related Persons, will not employ, solicit the employment or contract with any
employee or independent contractor of the Company for a period of six months
after the termination of this Agreement.
Section 10.4 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
The Company: Memphis Clinical Laboratory, Inc.
4088 Barton
Memphis, Tennessee 38116
Attn: President
Facsimile No.: (214) 342-2129
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with a copy to: Tracy & Holland, L.L.P.
306 West 7th Street, Suite 500
Fort Worth, Texas 76102
Attn: George T. Johns, Esq.
Facsimile No.: (817) 332-3140
Unison: Unison HealthCare Corporation
7272 East Indian School Road, Suite 214
Scottsdale, Arizona 85251
Attn: President
Facsimile: (602) 481-6479
with a copy to: Quarles & Brady
One East Camelback, Suite 400
Phoenix, Arizona 85012-1649
Attn: P. Robert Moya, Esq.
Facsimile: (602) 230-5598
MEMCO: Memphis Acquisition Co.
7272 East Indian School Road, Suite 214
Scottsdale, Arizona 85251
Attn: President
Facsimile: (602) 481-6479
with a copy to: Quarles & Brady
One East Camelback, Suite 400
Phoenix, Arizona 85012-1649
Attn: P. Robert Moya, Esq.
Facsimile: (602) 230-5598
Section 10.5 Jurisdiction; Service of Process. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Arizona, County of Maricopa, or, if it has or can acquire jurisdiction, in
the United States District Court for the District of Arizona, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
Section 10.6 Further Assurances. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
Section 10.7 Combined Operating Results. Unison shall use its Best
Efforts to publish the results of at least 30 days of combined operations of the
Company and Unison following the
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Effective Time as soon as reasonably practicable after the end of such 30 day
period.
Section 10.8 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
Section 10.9 Entire Agreement and Modification. This Agreement
supersedes all prior agreements between the parties with respect to its subject
matter (including the Letter of Intent dated March 26, 1996) and constitutes
(along with the documents referred to in this Agreement) a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
Section 10.10 Disclosure Schedules.
(a) The disclosures in the Disclosure Schedules, and those in
any Supplement thereto, shall be deemed to relate only to the representations
and warranties in the Section of the Agreement to which they expressly relate
and not to any other representation or warranty in this Agreement.
(b) In the event of any inconsistency between the statements
in the body of this Agreement and those in the Disclosure Schedules (other than
an exception expressly set forth as such in the Disclosure Schedules with
respect to a specifically identified representation or warranty), the statements
in the body of this Agreement will control.
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Section 10.11 Assignments, Successors, and No Third-Party Rights.
Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties except that Unison may assign any of its
rights under this Agreement to any Subsidiary of Unison. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement; provided, however, that the provisions of Section 3.1,
Section 3.3 and Section 10.7 are additionally intended to be for the benefit of
the Shareholders. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
Section 10.12 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
Section 10.13 Section Headings, Construction. The headings of Sections
in this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
Section 10.14 Time of Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.
Section 10.15 Governing Law. This Agreement will be governed by the
laws of the State of Arizona without regard to conflicts of laws principles.
Section 10.16 Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
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SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
UNISON:
UNISON HEALTHCARE CORPORATION, a Delaware corporation
By: /s/ CRAIG R. CLARK
--------------------------
Name: Craig R. Clark
--------------------------
Title: Executive Vice President
--------------------------
MEMCO:
MEMPHIS ACQUISITION CO., a Delaware corporation
By: /s/ CRAIG R. CLARK
--------------------------
Name: Craig R. Clark
--------------------------
Title: Vice President
--------------------------
COMPANY:
MEMPHIS CLINICAL LABORATORY, INC., a Tennessee corporation
By: /s/ HAROLD N. MCKINNEY
--------------------------
Name: Harold N. McKinney
--------------------------
Title: Vice President
--------------------------
<PAGE> 66
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 11th day of July, 1996, before me, the
undersigned officer, personally appeared Craig R. Clark, who acknowledged
himself to be an Executive Vice President of Unison HealthCare Corporation, a
Delaware corporation, and that he, in such capacity, being authorized so to do,
executed the foregoing instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
_________________________
Notary Public
My Commission Expires:
_________________________
STATE OF ARIZONA )
) ss.
County of Maricopa )
On this 11th day of July, 1996, before me, the
undersigned officer, personally appeared Craig R. Clark, who acknowledged
himself to be a Vice President of Memphis Acquisition Co., a Delaware
corporation, and that he, in such capacity, being authorized so to do, executed
the foregoing instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
_________________________
Notary Public
My Commission Expires:
_________________________
<PAGE> 67
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
STATE OF TEXAS )
) ss.
County of Dallas )
On this 11th day of July, 1996, before me, the undersigned
officer, personally appeared Harold N. McKinney, who acknowledged himself to be
a Vice President of Memphis Clinical Laboratory, Inc., a Tennessee corporation,
and that he, in such capacity, being authorized so to do, executed the foregoing
instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
_________________________
Notary Public
My Commission Expires:
_________________________
