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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 Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 20, 1996
MEDICAL RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-20440 13-3584552
(State or other (Commission (I.R.S. Employer
jurisdiction) File Number) Identification No.)
2701 N. Rocky Point Drive, Tampa, Florida 33507
155 State Street, Hackensack, New Jersey 07601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 281-0202
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(Former name and former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On May 20, 1996, Medical Resources, Inc. (the "Company")
entered into an Agreement and Plan of Merger (the "Agreement") by
and among the Company, MRI Sub, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company ("Sub"), and NMR Of America,
Inc., a Delaware corporation ("NMR"). The terms of the Agreement
provide that NMR will be acquired by the Company by means of a
merger of NMR with and into Sub, with the Sub being the surviving
corporation. In the merger, each share of NMR's Common Stock
issued and outstanding immediately prior to the effective date of
the merger would be exchanged for 0.6875 shares of the Company's
Common Stock.
The merger is subject to certain conditions, including
satisfactory completion of due diligence by the Company and NMR,
shareholder approval of both companies, the receipt of fairness
opinions and an effective registration statement for securities to
be issued in the merger.
NMR is engaged in direct and through limited partnerships
in the installation, management and provision of diagnostic imaging
services to physicians and hospitals throughout 18 outpatient
imaging centers located in Florida, New Jersey, Illinois, Maryland
and Pennsylvania.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
A. Agreement and Plan of Merger dated as of May 20,
1996 by and among the Company, Sub and NMR.
(without exhibits thereto)
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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.
MEDICAL RESOURCES, INC.
By:------------------------
Name: Stephen M. Davis
Title: Secretary
Dated: May 30, 1996
74952<PAGE>
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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.
MEDICAL RESOURCES, INC.
By:/s/ Stephen M. Davis
----------------------------
Name: Stephen M. Davis
Title: Secretary
Dated: May 30, 1996
74952<PAGE>
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MEDICAL RESOURCES, INC.,
MRI SUB, INC.
and
NMR OF AMERICA, INC.
Dated as of May 20, 1996
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TABLE OF CONTENTS
Page
ARTICLE 1 THE MERGER. . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 The Merger . . . . . . . . . . . . . . . . 1
SECTION 1.2 Stockholders' Meetings . . . . . . . . . . 2
SECTION 1.3 Consummation of the Merger;
Effective Date . . . . . . . . . . . . . . 2
SECTION 1.4 Effect of the Merger . . . . . . . . . . . 2
ARTICLE 2 CONVERSION AND CANCELLATION OF SECURITIES . . . 2
SECTION 2.1 Conversion of Shares; Treatment of
Warrants, Options and Convertible
Securities . . . . . . . . . . . . . . . . 2
(a) Common Stock. . . . . . . . . . . . . 2
(b) Warrants. . . . . . . . . . . . . . . 3
(c) Options . . . . . . . . . . . . . . . 3
(d) Convertible Securities. . . . . . . . 5
SECTION 2.2 Appraisal Rights . . . . . . . . . . . . . 5
SECTION 2.3 Surrender and Payment. . . . . . . . . . . 5
SECTION 2.4 Common Stock of Sub. . . . . . . . . . . . 6
SECTION 2.5 Closing. . . . . . . . . . . . . . . . . . 6
ARTICLE 3 CERTIFICATES OF INCORPORATION AND BY-LAWS . . . 6
SECTION 3.1 Certificate of Incorporation
and By-Laws. . . . . . . . . . . . . . . . 6
SECTION 3.2 Directors and Officers of Sub. . . . . . . 6
ARTICLE 4 CERTAIN PROVISIONS RELATING TO SHARES . . . . . 6
SECTION 4.1 No Fractional Shares of
MRI Common Stock . . . . . . . . . . . . . 6
SECTION 4.2 MRI to Make Merger Consideration
Available. . . . . . . . . . . . . . . . . 7
SECTION 4.3 Dividends; Transfer Taxes; Voting
Rights . . . . . . . . . . . . . . . . . . 7
SECTION 4.4 Abandoned Property; Lost Certificates. . . 8
SECTION 4.5 Taking of Necessary Action;
Further Action . . . . . . . . . . . . . . 8
SECTION 4.6 Closing of NMR's Transfer Books. . . . . . 8
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF NMR . . . . . 9
SECTION 5.1 Organization and Qualification;
Subsidiaries . . . . . . . . . . . . . . . 9
SECTION 5.2 Certificates of Incorporation
and By-Laws. . . . . . . . . . . . . . . . 9
SECTION 5.3 Capitalization . . . . . . . . . . . . . . 9
SECTION 5.4 Authority. . . . . . . . . . . . . . . . . 10
SECTION 5.5 No Conflict; Required Filings
and Consents . . . . . . . . . . . . . . . 11
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SECTION 5.6 Permits; Compliance. . . . . . . . . . . . 12
SECTION 5.7 Reports; Financial Statements. . . . . . . 12
SECTION 5.8 Absence of Certain Changes or Events . . . 13
SECTION 5.9 Absence of Litigation. . . . . . . . . . . 14
SECTION 5.10 Taxes. . . . . . . . . . . . . . . . . . . 14
SECTION 5.11 Certain Business Practices . . . . . . . . 14
SECTION 5.12 Brokers. . . . . . . . . . . . . . . . . . 14
SECTION 5.13 Board Recommendation . . . . . . . . . . . 15
SECTION 5.14 Books and Records. . . . . . . . . . . . . 15
SECTION 5.15 No Undisclosed Liabilities . . . . . . . . 15
SECTION 5.16 Contracts. . . . . . . . . . . . . . . . . 15
SECTION 5.17 Disclosure . . . . . . . . . . . . . . . . 15
SECTION 5.18 Affiliates . . . . . . . . . . . . . . . . 16
ARTICLE 6 REPRESENTATIONS AND WARRANTIES
OF MRI AND SUB. . . . . . . . . . . . . . . . . 16
SECTION 6.1 Organization and Qualification;
Subsidiaries . . . . . . . . . . . . . . . 16
SECTION 6.2 Certificate of Incorporation and
By-Laws. . . . . . . . . . . . . . . . . . 16
SECTION 6.3 Capitalization . . . . . . . . . . . . . . 16
SECTION 6.4 Authority. . . . . . . . . . . . . . . . . 17
SECTION 6.5 No Conflict; Required Filings
and Consents . . . . . . . . . . . . . . . 18
SECTION 6.6 Permits; Compliance. . . . . . . . . . . . 19
SECTION 6.7 Reports; Financial Statements. . . . . . . 19
SECTION 6.8 Absence of Certain Changes or Events . . . 20
SECTION 6.9 Absence of Litigation. . . . . . . . . . . 20
SECTION 6.10 Taxes. . . . . . . . . . . . . . . . . . . 20
SECTION 6.11 Certain Business Practices . . . . . . . . 21
SECTION 6.12 Brokers. . . . . . . . . . . . . . . . . . 21
SECTION 6.13 Books and Records. . . . . . . . . . . . . 21
SECTION 6.14 Contracts. . . . . . . . . . . . . . . . . 21
SECTION 6.15 No Undisclosed Liabilities . . . . . . . . 21
SECTION 6.16 Board Recommendation . . . . . . . . . . . 22
SECTION 6.17 Disclosure . . . . . . . . . . . . . . . . 22
ARTICLE 7 COVENANTS . . . . . . . . . . . . . . . . . . . 22
SECTION 7.1 Affirmative Covenants of NMR and MRI . . . 22
SECTION 7.2 Negative Covenants of NMR. . . . . . . . . 23
SECTION 7.3 Negative Covenants of MRI. . . . . . . . . 26
SECTION 7.4 Access and Information . . . . . . . . . . 29
SECTION 7.5 Confidentiality. . . . . . . . . . . . . . 29
SECTION 7.6 No Solicitation of Business
Transactions by NMR; Fee Payable
for Violation. . . . . . . . . . . . . . . 29
SECTION 7.7 Additional Affirmative Covenant of MRI . . 31
SECTION 7.8 Directors' and Officers'
Indemnification. . . . . . . . . . . . . . 31
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ARTICLE 8 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . 31
SECTION 8.1 Meetings of Stockholders . . . . . . . . . 31
SECTION 8.2 Registration Statement; Proxy Statement. . 32
SECTION 8.3 Appropriate Action; Consents; Filings. . . 33
SECTION 8.4 Affiliates . . . . . . . . . . . . . . . . 35
SECTION 8.5 Public Announcements . . . . . . . . . . . 35
SECTION 8.6 NASDAQ Listing . . . . . . . . . . . . . . 35
SECTION 8.7 Existing Executive Employment
Arrangements . . . . . . . . . . . . . . . 35
SECTION 8.8 Disclosure Schedules . . . . . . . . . . . 35
SECTION 8.9 Financial Advisors . . . . . . . . . . . . 35
ARTICLE 9 CLOSING CONDITIONS. . . . . . . . . . . . . . . 36
SECTION 9.1 Conditions to Obligations of
Each Party Under This Agreement. . . . . . 36
(a) Effectiveness of the
Registration Statement. . . . . . . . 36
(b) Stockholder Approval. . . . . . . . . 36
(c) No Order. . . . . . . . . . . . . . . 36
(d) HSR Act . . . . . . . . . . . . . . . 36
SECTION 9.2 Additional Conditions to
Obligations of MRI . . . . . . . . . . . . 36
(a) Representations and
Warranties. . . . . . . . . . . . . . 36
(b) Agreements and Covenants. . . . . . . 37
(c) Consents and Approvals. . . . . . . . 37
(d) Opinion of NMR's Counsel. . . . . . . 37
(e) No NMR Material Adverse
Effect. . . . . . . . . . . . . . . . 37
(f) Stockholders Rights
Agreement . . . . . . . . . . . . . . 37
(g) Appraisal Rights. . . . . . . . . . . 37
(h) Certificates. . . . . . . . . . . . . 37
(i) Affiliates' Letters . . . . . . . . . 37
SECTION 9.3 Additional Conditions to Obligations
of NMR . . . . . . . . . . . . . . . . . . 38
(a) Representations and
Warranties. . . . . . . . . . . . . . 38
(b) Agreements and Covenants. . . . . . . 38
(c) Consents and Approvals. . . . . . . . 38
(d) Opinion of Counsel to
MRI . . . . . . . . . . . . . . . . . 38
(e) No MRI Material Adverse
Effect. . . . . . . . . . . . . . . . 38
(f) Certificates. . . . . . . . . . . . . 39
(g) Tax Opinion . . . . . . . . . . . . . 39
ARTICLE 10 TERMINATION, AMENDMENT AND WAIVER . . . . . . . 39
SECTION 10.1 Termination. . . . . . . . . . . . . . . . 39
SECTION 10.2 Effect of Termination. . . . . . . . . . . 40
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SECTION 10.3 Amendment. . . . . . . . . . . . . . . . . 40
SECTION 10.4 Waiver . . . . . . . . . . . . . . . . . . 41
SECTION 10.5 Fees, Expenses and Other Payments. . . . . 41
ARTICLE 11 GENERAL PROVISIONS. . . . . . . . . . . . . . . 42
SECTION 11.1 Effectiveness of Representations,
Warranties and Agreements . . . . . . . . 42
SECTION 11.2 Notices. . . . . . . . . . . . . . . . . . 42
SECTION 11.3 Certain Definitions. . . . . . . . . . . . 43
SECTION 11.4 Headings . . . . . . . . . . . . . . . . . 45
SECTION 11.5 Severability . . . . . . . . . . . . . . . 45
SECTION 11.6 Entire Agreement . . . . . . . . . . . . . 45
SECTION 11.7 Assignment . . . . . . . . . . . . . . . . 45
SECTION 11.8 Parties in Interest. . . . . . . . . . . . 45
SECTION 11.9 Failure or Indulgence Not Waiver;
Remedies Cumulative. . . . . . . . . . . . 45
SECTION 11.10 Governing Law. . . . . . . . . . . . . . . 46
SECTION 11.11 Counterparts . . . . . . . . . . . . . . . 46
SECTION 11.12 Determination of Market Value. . . . . . . 46
Schedule 9.2(d). . . . . . . . . . . . . . . . . . . . . . . . 1
Schedule 9.3(d). . . . . . . . . . . . . . . . . . . . . . . . 1
Section 9.2(g) of NMR Disclosure Schedule. . . . . . . . . . . 1
Section 9.3(g) of MRI Disclosure Schedule. . . . . . . . . . . 5
Exhibit 8.7A . . . . . . . . . . . . . . NMR Executive Agreements
Exhibit 8.7B . . . . . .Non-Competition and Consulting Agreements
<PAGE>
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of May 20, 1996
(the "Agreement"), by and among MEDICAL RESOURCES, INC., a Delaware
corporation ("MRI"), MRI SUB, INC., a Delaware corporation and
wholly-owned subsidiary of MRI ("Sub"), and NMR OF AMERICA, INC.,
a Delaware corporation ("NMR") (Sub and NMR being hereinafter
collectively referred to as the "Constituent Corporations").
WHEREAS, the respective Boards of Directors of MRI, Sub,
and NMR have each determined that it is advisable and for the
benefit and in the best interests of their corporations and their
respective stockholders that NMR be acquired by MRI (the
"Acquisition") by means of a merger of NMR with and into Sub, with
Sub being the surviving corporation, on the terms and conditions
hereinafter set forth (the "Merger");
WHEREAS, the Board of Directors of MRI has determined
that the Acquisition is consistent with and in furtherance of the
long-term business strategy of MRI and is fair to, and in the best
interests of, MRI and the holders of MRI Common Stock, as
hereinafter defined, and has approved and adopted this Agreement
and has approved the Merger and the other transactions contemplated
hereby and recommended approval and adoption of the Agreement and
approval of the Merger by the stockholders of MRI; and
WHEREAS, the Board of Directors of NMR has determined
that the Acquisition is fair to, and in the best interests of, NMR
and the holders of NMR Common Stock, as hereinafter defined, and
has approved and adopted this Agreement and has approved the Merger
and the other transactions contemplated hereby and recommended
approval and adoption of the Agreement and approval of the Merger
by the stockholders of NMR;
WHEREAS, for federal income tax purposes, it is intended
that the Merger qualify as a reorganization under the provisions of
Section 368(a)(1)(A) and 368(a)(2)(E);
NOW, THEREFORE, in consideration of the premises, the
mutual covenants, representations and warranties herein contained,
and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
intending to be bound hereby agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1 The Merger. Subject to the terms and
conditions hereof, on the Effective Date (as defined in Section
1.3), NMR shall be merged with and into Sub in accordance with the
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applicable provisions of the laws of the State of Delaware
("Delaware Law"); Sub, as the surviving corporation in the Merger
(the "Surviving Corporation"), shall continue its corporate
existence under Delaware Law; the separate existence of NMR shall
thereupon cease; and its corporate existence shall be merged into
and transferred to the Surviving Corporation.
SECTION 1.2 Stockholders' Meetings. To the extent
consistent with the fiduciary duty of their respective Boards of
Directors, each of NMR and MRI shall, as soon as practicable, take
all action necessary in accordance with applicable law and its
Certificate of Incorporation and By-Laws to convene a meeting of
its stockholders to consider and vote upon the approval of the
Merger (together, the "Stockholders' Meetings") and to solicit
proxies with respect to such meeting. The Boards of Directors of
each of NMR and MRI has recommended that its stockholders approve
the Merger.
SECTION 1.3 Consummation of the Merger; Effective
Date. As soon as practicable following the Closing (as that term
is hereinafter defined in Section 2.5), the parties hereto will
file with the Secretary of State of the State of Delaware a
Certificate of Merger in such form as required by, and executed in
accordance with, the relevant provisions of Delaware Law. The
Merger shall become effective at such time (the "Effective Time")
as the Certificate of Merger shall have been duly filed with the
Secretary of State of the State of Delaware (the "Effective Date").
SECTION 1.4 Effect of the Merger. Upon the
effectiveness of the Merger, the Surviving Corporation shall
succeed, without any other action, to all rights and property of
each of the Constituent Corporations, and shall be subject to all
the debts and liabilities of each of the Constituent Corporations
in the same manner as if the Surviving Corporation had itself
incurred them, all with the effect set forth in Delaware law.
Without limiting the generality of the foregoing, following
effectiveness of the Merger, the Surviving Corporation shall assume
responsibility, either directly or indirectly, for the
administration of NMR's 401(K) Plan.
ARTICLE 2
CONVERSION AND CANCELLATION
OF SECURITIES
SECTION 2.1 Conversion of Shares; Treatment of
Warrants, Options and Convertible Securities. As of the Effective
Date, by virtue of the Merger and without any action on the part of
the holders thereof:
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(a) Common Stock. (i) On the Effective Date, the
shares of NMR's Common Stock, $.01 par value (the "NMR Common
Stock"), issued and outstanding immediately prior to the Effective
Date, other than Dissenting Shares (as hereinafter defined) and
other than any shares of NMR Common Stock held by MRI, Sub or NMR,
shall, by virtue of the Merger automatically and without any action
on the part of the holder thereof, become and be converted into the
right to receive shares of fully paid and nonassessable Common
Stock, $.01 par value, of MRI (the "MRI Common Stock"). The shares
of MRI Common Stock issuable in the Merger are sometimes
collectively referred to hereinafter as the "Merger Consideration"
and the ratio of 0.6875 shares of MRI Common Stock to one share of
NMR Common Stock is herein referred to as the "Exchange Ratio."
(ii) Capital Stock Held by NMR, MRI or Sub. On
the Effective Date, each share of capital stock of NMR held in the
treasury of NMR, or by MRI or Sub immediately prior to the
Effective Date shall, by virtue of the Merger and without any
action on the part of the holder thereof, be automatically
cancelled and retired and cease to exist and no securities or other
consideration shall be payable in respect thereof.
(b) Warrants. Each warrant to acquire shares of
NMR Common Stock (a "Warrant") that is outstanding and unexercised
at the Effective Date shall, by virtue of the Merger and without
any action on the part of the holder thereof, and subject to the
other terms and conditions thereof, automatically be deemed to be
exercisable for that number of shares of MRI Common Stock the
holder of such Warrant would have received in the Merger pursuant
to Section 2.1(a) had such holder exercised such Warrant in full
immediately prior to the Effective Date, and the price per share of
MRI Common Stock issuable after the Effective Date upon exercise of
such Warrant shall equal the price per share of NMR Common Stock
under such Warrant as in effect prior to the Effective Date divided
by the Exchange Ratio. Without limiting the generality of the
foregoing, following effectiveness of the Merger, MRI shall be
bound by and subject to all registration rights contained in each
Warrant and such rights shall apply against MRI with the same legal
force and effect as they applied against NMR prior to effectiveness
of the Merger. After the Effective Date, MRI shall issue to each
holder of a Warrant a new warrant containing the foregoing terms
and all other terms set forth in each Warrant, including without
limitation, all registration rights; provided, however, that the
failure of MRI to so issue new warrants in substitution of Warrants
shall not limit the rights of the holder hereunder or thereunder
and each such Warrant will be deemed amended to substitute MRI in
place of NMR and the terms and conditions of each such Warrant
shall be applicable to MRI in the same manner as they would be
applicable to NMR if the Merger had not occurred.
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(c) Options. At the Effective Date, each stock
option ("NMR Option") outstanding on the date hereof pursuant to
the 1986 Incentive Stock Option and Nonstatutory Option Plan ("NMR
Plan") shall be deemed to constitute and shall automatically be
converted into stock options ("New Options") exercisable for shares
of MRI Common Stock and each NMR Option shall be administered in
accordance with the terms and conditions provided for in the NMR
Plan under which the corresponding NMR Option was granted and the
stock option agreement by which it was evidenced, including terms
and provisions regarding exercisability. The number of shares of
MRI Common Stock covered by each New Option shall be the number of
shares of MRI Common Stock which the holder of the NMR Option would
have received in the Merger pursuant to Section 2.1(a) had such
holder exercised the NMR Option in full immediately prior to the
Effective Date, without regard to vesting; provided, however, that
the number of shares of MRI Common Stock that may be purchased upon
exercise of a New Option shall not include any fractional share
interest which shall be cashed out upon exercise for an amount of
cash (without interest) determined by multiplying such fractional
share interest by the average reported last sale price of MRI
Common Stock on the NASDAQ system for the five (5) trading days
ending on the close of business on the last business day
immediately preceding the date of such exercise. The exercise
price per share of MRI Common Stock subject to a New Option shall
equal the exercise price per share (subject to the adjustments
provided for in the NMR Option) of NMR Common Stock subject to the
corresponding NMR Option so converted divided by the Exchange
Ratio. Without limiting the rights of holders of NMR Options, as
soon as practicable after the Effective Date, MRI shall issue to
the holders of such NMR Options appropriate instruments evidencing
New Options and confirming the rights of such holders with respect
to MRI Stock on the terms and conditions provided by this Section
2.1, upon surrender of the outstanding instruments representing
such NMR Option; provided, however, that MRI shall not be obligated
to issue any shares of MRI Stock, until such time as the shares of
MRI Stock issuable upon exercise of New Options shall have been
registered with the Securities and Exchange Commission (the "SEC")
pursuant to an effective registration statement and authorized for
quotation on the NASDAQ - National Market System and for sale by
any appropriate state securities regulators, which MRI shall use
its best efforts to effect as promptly as practicable, but in no
event more than 15 days after the Effective Date, and MRI shall use
its best efforts to maintain the effectiveness of such registration
statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as the NMR Options
remain outstanding. At or prior to the Effective Date, MRI shall
take all corporate action necessary to reserve for issuance a
sufficient number of shares of MRI Common Stock for delivery upon
exercise of New Options. Notwithstanding the requirements of the
NMR Plan, so long as a registration statement covering the MRI
<PAGE>
Common Stock underlying the New Option is effective, if any holder
of a New Option sells any or all of the shares of MRI Common Stock
covered by such New Option in a brokers transaction prior to the
exercise of such New Option ("Short Sale"), MRI shall, upon written
notice to MRI of such Short Sale by the holder or his or her
broker, cause its transfer agent to issue in the name of holder and
deliver to the holder's broker within three business days a
certificate evidencing such shares to be applied against the Short
Sale and upon receipt of payment against delivery of the shares,
the holder will direct his or her broker to authorize payment
directly to MRI of the exercise price from the proceeds of such
Short Sale.
(d) Convertible Securities. The obligations of NMR
under each 8% Convertible Subordinated Debenture due 2001 of NMR (a
"Debenture") (including, without limitation, the due and punctual
payment of the principal of (and premium, if any) and interest
thereon) that is outstanding at the Effective Date shall, by virtue
of the Merger and without any action on the part of NMR or MRI, be
assumed in full by, and become the obligations of, the Surviving
Corporation which shall comply after the Effective Date with all
requirements of the Indenture, dated as of July 1, 1986 (the
"Indenture") pursuant to which the Debentures were issued. Each
Debenture that is outstanding at the Effective Date shall, by
virtue of the Merger and without any action on the part of the
holder thereof, and subject to the other terms and conditions
thereof, automatically be deemed to be convertible for that number
of shares of MRI Common Stock that the holder of such Debenture
would have received in the Merger pursuant to Section 2.1(a) had
such holder converted such Debenture in full immediately prior to
the Effective Date, and the price per share of MRI Common Stock
issuable after the Effective Date upon conversion of such Debenture
shall equal the "conversion price" under such Debenture in effect
prior to the Effective Date divided by the Exchange Ratio. MRI
shall, and shall cause the Surviving Corporation to, comply with
any and all requirements of, and execute and deliver any and all
agreements required by, the Indenture pertaining to a merger or
consolidation of NMR.
SECTION 2.2 Appraisal Rights. Holders of shares of
NMR Common Stock, who duly exercise and perfect appraisal rights
under Section 262 of the Delaware General Corporation Law (such
shares referred to herein as "Dissenting Shares") shall have the
appraisal rights set forth in Section 262 of the Delaware General
Corporation Law and no other rights; provided, however, that
Dissenting Shares beneficially and legally owned by the holder
thereof at the Effective Date who shall, after the Effective Date,
withdraw the demand for appraisal or lose the right of appraisal as
provided in such law, shall be deemed to be converted as of the
Effective Date, into the right to receive the Merger Consideration
<PAGE>
set forth in Section 2.1 hereof.
SECTION 2.3 Surrender and Payment. After the
Effective Date, each holder of a certificate that formerly
represented shares of NMR Common Stock, issued and outstanding on
the Effective Date (other than any Dissenting Shares and shares
held by NMR, MRI or Sub) shall be entitled, upon surrender thereof
to the Surviving Corporation, to receive the Merger Consideration
for each share of MRI Common Stock theretofore represented by the
certificate so surrendered as provided in Section 2.1 hereof, and
the certificate so surrendered shall forthwith be cancelled.
SECTION 2.4 Common Stock of Sub. Each share of common
stock, par value $.01 per share, of Sub issued and outstanding on
the Effective Date shall, by virtue of the Merger and without any
action on the part of the holder thereof, remain outstanding and
shall thereafter represent one share of common stock of the
Surviving Corporation.
SECTION 2.5 Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place,
unless the parties shall otherwise agree, at the offices of Werbel
McMillin & Carnelutti, 711 Fifth Avenue, New York, New York 10022
at 10:00 A.M. local time (i) as soon as practicable after the day
on which the last condition set forth in Article 9 shall have been
fulfilled or waived or (ii) at such other time as NMR and MRI may
mutually agree (the "Closing Date").
ARTICLE 3
CERTIFICATES OF INCORPORATION and BY-LAWS
SECTION 3.1 Certificate of Incorporation and By-Laws.
As of the Effective Date, the Certificate of Incorporation and
By-laws of Sub as in effect on the Effective Date shall be the
Certificate of Incorporation and By-Laws of the Surviving
Corporation until thereafter amended as provided by law.
SECTION 3.2 Directors and Officers of Sub. The
directors and officers of Sub at the Effective Time shall be the
initial directors and officers of the Surviving Corporation and
shall hold office from the Effective Time until the respective
successors are duly elected or appointed and qualified in the
manner provided in the Certificate of Incorporation or By-Laws of
the Surviving Corporation or as otherwise provided by law.
ARTICLE 4
<PAGE>
CERTAIN PROVISIONS RELATING TO SHARES
SECTION 4.1 No Fractional Shares of MRI Common Stock.
No fractional shares of MRI Common Stock shall be issued by MRI in
the Merger. Each stockholder of NMR who otherwise would be
entitled to a fractional interest in any share of MRI Common Stock
shall receive an amount of cash (without interest) determined by
multiplying the average reported last sale price of MRI Common
Stock on the NASDAQ system for the five (5) trading days ending on
the close of business on the second (2) business day before the
Stockholders' Meeting of NMR (the "Fair Market Value") by the
fractional share interest to which such holder would otherwise be
entitled. Unless and until the certificate which immediately prior
to the Effective Date represented shares of NMR Common Stock (the
"Certificates") shall have been surrendered, the holder of any
Certificate representing a fraction of a share of MRI Common Stock
shall not be entitled to receive the cash payment described in this
Section 4.1 for such fraction of a share. Such payment shall be
remitted, without interest, after the surrender of the Certificates
held by such holder as provided in Section 4.2.
SECTION 4.2 MRI to Make Merger Consideration
Available. MRI shall designate its stock transfer agent to act as
exchange agent (the "Exchange Agent") in connection with the
Merger. As soon as practicable after the Effective Date, MRI shall
make available and, subject to Section 4.1, each holder of a
Certificate shall be entitled to receive, upon surrender to the
Exchange Agent of such Certificate for cancellation and subject to
any required withholding of taxes under any applicable federal
income tax laws ("Backup Withholding"), the aggregate number of
shares of MRI Common Stock into which the shares of NMR Common
Stock, previously represented by each Certificate shall have been
converted in the Merger. Until so surrendered and exchanged, each
Certificate (other than Certificates representing any Dissenting
Shares or shares of the capital stock of NMR held by NMR, MRI or
Sub) shall represent solely the right to receive the Merger
Consideration into which the shares of NMR Common Stock it
represented prior to the Effective Date shall have been converted
pursuant to Section 2.1, less any Backup Withholding. As soon as
practicable after the Effective Date, MRI shall cause the Exchange
Agent to mail a transmittal form to each holder of a Certificate
advising such holder of the procedure for surrendering to the
Exchange Agent such Certificates for payment in accordance with
this Section 4.2.
SECTION 4.3 Dividends; Transfer Taxes; Voting Rights.
(a) No dividends or distributions that are otherwise payable on
MRI Common Stock will be paid to persons entitled to receive MRI
Common Stock until such persons surrender their Certificates. Upon
such surrender, there shall be paid to the person in whose name MRI
<PAGE>
Common Stock shall be issued, any dividends or distributions which
shall have become payable with respect to MRI Common Stock between
the Effective Date and the time of such surrender. After such
surrender, there shall be paid to the person in whose name the MRI
Common Stock shall be issued any dividends or distributions on MRI
Common Stock which shall have a record date prior to such surrender
and a payment date after such surrender, and such payment shall be
made on such payment date.
(b) If shares of MRI Common Stock are to be issued
or delivered to any person other than the person in whose name the
Certificate surrendered for exchange is registered, it shall be a
condition of the exchange that the person requesting such exchange
shall deliver to the Exchange Agent all documents required to
evidence and effect such transfer, and pay to the Exchange Agent
any transfer or other taxes required by reason of the issuance or
delivery of a certificate representing such shares of MRI Common
Stock to other than the registered owner of the Certificate
surrendered, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable.
SECTION 4.4 Abandoned Property; Lost Certificates.
Notwithstanding anything to the contrary contained herein, neither
the Exchange Agent nor any party hereto shall have any liability to
a holder of a Certificate for the payment of the Merger
Consideration to be issued in accordance with the provisions hereof
if such Merger Consideration is paid to a public official pursuant
to any applicable abandoned property, escheat or similar law. If
any Certificates shall not have been surrendered prior to three (3)
years after the Effective Date (or immediately prior to such
earlier date on which any payment in respect thereof would
otherwise escheat to or become the property of any governmental
unit or agency), the payment in respect of such Certificates shall,
to the extent permitted by applicable law, become the property of
the Surviving Corporation, free and clear of all claims of interest
of any person previously entitled thereto. Lost Certificates shall
be treated in accordance with the normal procedures of the Exchange
Agent.
SECTION Taking of Necessary Action; Further
Action. Sub, MRI and NMR shall each take all such action as may be
necessary or appropriate in order to effectuate the Merger as
promptly as possible, subject to all of the terms and conditions
hereof. If, at any time after the Effective Date, any further
action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right,
title and possession to all assets, property, rights, privileges,
powers and franchises of either of the Constituent Corporations,
the officers and directors of such corporation are fully authorized
in the name of such corporation or otherwise to take, and shall
<PAGE>
take, all such action.
SECTION 4.6 Closing of NMR's Transfer Books. On the
Effective Date, the stock transfer books of NMR shall be closed and
no transfer of shares of capital stock of NMR shall thereafter be
made, except for transfers of Dissenting Shares, as permitted by
law. If, after the Effective Date, certificates representing
shares of NMR Common Stock are presented to the Surviving
Corporation, they shall, subject to the provisions of Section 4.4
hereof, be cancelled and exchanged for the Merger Consideration
provided in Section 2.1 hereof.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF NMR
Except as set forth in the Disclosure Schedule to be
delivered by NMR to MRI (the "NMR Disclosure Schedule"), which
shall identify exceptions by specific Section references, NMR
hereby represents and warrants to MRI that:
SECTION 5.1 Organization and Qualification;
Subsidiaries. Each of NMR and its subsidiaries is a corporation or
limited partnership, as the case may be, duly incorporated (if a
corporation), duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or
organization, has all requisite power and authority to own, lease
and operate its properties and to carry on its business as it is
now being conducted and is duly qualified and in good standing to
do business in each jurisdiction in which the nature of the
business conducted by it or the ownership or leasing of its
properties makes such qualification necessary, other than where the
failure to be in good standing, or to have such power and
authority, or to be duly qualified and in good standing, as the
case may be, would not have a NMR Material Adverse Effect. The
term "NMR Material Adverse Effect" as used in this Agreement shall
mean any event, change or effect that, individually or when taken
together with all other such events, changes or effects, would be
materially adverse to the condition (financial or otherwise),
prospects, properties, assets, business or operations of NMR and
its subsidiaries, taken as a whole, at the time of such event,
change or effect; provided, however, that for purposes of this
Agreement, any change occurring between the date of this Agreement
and the Effective Date in the amount of cash held by NMR as a
direct result of payment of expenses relating to the Merger
(including the payments to Joseph G. Dasti and John P. O'Malley
referred to in Section 7.7) shall not be deemed an NMR Material
Adverse Effect.
<PAGE>
SECTION 5.2 Certificates of Incorporation and By-Laws.
NMR has heretofore furnished to MRI complete and correct copies of
the Certificates of Incorporation and the By-Laws or the equivalent
organizational documents, in each case as amended or restated, of
NMR and each subsidiary. Neither NMR nor any subsidiary is in
violation of any of the provisions of its Certificate of
Incorporation or By-Laws or certificate of limited partnership, or
equivalent organizational document, as the case may be.
SECTION 5.3 Capitalization. As of the date of this
Agreement, the authorized capital stock of NMR consists of (i)
30,000,000 shares of NMR Common Stock, of which: (v) 6,273,683
shares of NMR Common Stock are issued and outstanding, all of which
are duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights created by statute, common
law, NMR's Certificate of Incorporation or By-Laws or, any
agreement to which NMR is a party or is bound or otherwise; (w)
430,797 shares of NMR Common Stock are held in the treasury of NMR;
(x) 454,222 shares of NMR Common Stock are reserved for future
issuance in connection with NMR's outstanding Convertible
Subordinated Debentures (the "Debt Securities"); (y) 563,409 shares
of NMR Common Stock are reserved for future issuance pursuant to
(1) outstanding employee stock options (collectively the "NMR
Employee Stock Options") granted pursuant to the 1986 Incentive
Stock Option and Non-Statutory Option Plan, as amended, (the
"Employee Option Plan"), and (2) outstanding stock purchase
warrants or other rights to purchase NMR Common Stock (the "NMR
Warrants" and, together with NMR Employee Stock Options,
collectively the "Stock Options"); and (z) 57,337 shares of NMR
Common Stock issued to the trustee of NMR's 401(K) Plan and
(ii) 500,000 shares of preferred stock, par value $.05 per share
("NMR Preferred Stock"), of NMR, of which no shares are issued or
outstanding. Each of the outstanding shares of capital stock of,
or other equity interests in, each of NMR's subsidiaries is duly
authorized and validly issued and, if applicable, fully paid and
nonassessable, and such shares or other equity interests owned by
NMR or any subsidiary of NMR are owned free and clear of all
security interests, liens, claims, pledges, agreements, limitations
on NMR's or any subsidiary's voting rights, charges or other
encumbrances of any nature whatsoever. As of the date of this
Agreement, there are no options, warrants or other rights
(including registration rights), agreements, arrangements or
commitments of any character to which NMR or any of its
subsidiaries is a party relating to the issued or unissued capital
stock or other securities of NMR or any of its subsidiaries or
obligating NMR or any of its subsidiaries to grant, issue or sell
any shares of the capital stock or other securities of NMR or any
of its subsidiaries, by sale, lease, license or otherwise, except
(A) as disclosed in Section 5.3 of the NMR Disclosure Schedule and
(B) for NMR's existing stock option plans to the extent stock
<PAGE>
options for such shares thereunder have not yet been granted.
As of the date of this Agreement, except as set forth in Section
5.3 of the NMR Disclosure Schedule, there are no obligations,
contingent or otherwise, of NMR or any of its subsidiaries to (x)
repurchase, redeem or otherwise acquire any shares of NMR Common
Stock or NMR Preferred Stock, or the capital stock of, or other
equity interests in, any subsidiary of NMR or (y) (other than
advances to subsidiaries in the ordinary course of business)
provide funds to, or make any investment in (in the form of a loan,
capital contribution or otherwise), or provide any guarantee with
respect to the obligations of, any subsidiary of NMR or any other
person.
SECTION 5.4 Authority. NMR has all requisite
corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby (other than with respect to
the Merger, the approval and adoption of this Agreement by the
holders of the NMR Common Stock in accordance with Delaware Law).
The execution and delivery of this Agreement by NMR and the
consummation by NMR of the transactions contemplated hereby have
been duly authorized by all necessary corporate action and no other
corporate proceedings on the part of NMR are necessary to authorize
this Agreement or to consummate the transactions contemplated
hereby (other than, with respect to the approval and adoption of
this Agreement, by the holders of a majority of the outstanding
shares of NMR Common Stock in accordance with Delaware Law). This
Agreement has been duly executed and delivered by NMR and, assuming
the due authorization, execution and delivery thereof by MRI and
Sub, constitutes the legal, valid and binding obligation of NMR,
enforceable against NMR in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights in general from time
to time in effect and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity
or at law).
SECTION 5.5 No Conflict; Required Filings and
Consents. (a) The execution and delivery of this Agreement by NMR
does not, and the performance of this Agreement by NMR and the
consummation of the transactions contemplated hereby will not,
excepting any shareholder votes required by Delaware Law, (i)
conflict with or violate the Certificate of Incorporation or By-
Laws, or the equivalent organizational documents, in each case as
amended or restated, of NMR or any of its subsidiaries, (ii)
conflict with or violate any federal, state, foreign or local law,
statute, ordinance, rule, regulation, order, judgment, arbitration
award or decree (collectively, "Laws") or NMR Permit (as
hereinafter defined) in effect as of the date of this Agreement and
applicable to NMR or any of its subsidiaries or by which any of
<PAGE>
their respective properties is bound or subject to including,
without limitation, Section 203 of Delaware Law or (iii) result in
any breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance
on any of the properties or assets of NMR or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, order, decree,
franchise or other instrument or obligation to which NMR or any of
its subsidiaries is a party or by which NMR or any of its
subsidiaries or any of their respective properties is bound or is
subject to, except for any such conflicts or violations described
in clause (ii) or breaches, defaults, events, rights of
termination, amendment, acceleration or cancellation or liens or
encumbrances described in clause (iii) that would not have a NMR
Material Adverse Effect. The Board of Directors of NMR has taken
all actions necessary under Delaware Law, including approving the
transactions contemplated in this Agreement, to ensure that Section
203 of Delaware Law does not, or will not, apply to the
transactions contemplated in this Agreement. The Board of
Directors of NMR has taken all actions necessary or appropriate to
preclude the triggering or applicability of the provisions of NMR's
Stockholders' Rights Agreement to the Merger and transactions
contemplated hereby.
(b) The execution and delivery of this Agreement by
NMR does not, and the performance of this Agreement by NMR and the
ownership and operation of the business and properties of NMR and
its subsidiaries by the Surviving Corporation following the
Effective Date will not, as of the date of this Agreement, require
NMR or any of its subsidiaries to obtain any consent, approval,
authorization or permit of, or to make any filing with or
notification to, any governmental or regulatory authority
("Governmental Entities"), except (i) for applicable requirements,
if any, of the Securities Act of 1933, as amended (the "Securities
Act"), and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), state securities or blue sky laws ("Blue Sky
Laws") the Hart-Scott-Rodino Antitrust Improvements Act ("HSR
Act"), the New Jersey Industrial Site Recovery Act ("ISRA"), the
NASD, the Philadelphia Stock Exchange and the filing and
recordation of appropriate merger documents as required by Delaware
Law and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or
notifications, would not, either individually or in the aggregate,
prevent NMR from performing its obligations under this Agreement or
otherwise have a NMR Material Adverse Effect.
<PAGE>
SECTION 5.6 Permits; Compliance. Each of NMR and its
subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary
to own, lease and operate its properties and to carry on its
business as it is now being conducted (collectively, the "NMR
Permits"), and there is no action or proceeding or, to the
knowledge of NMR, investigation pending or threatened regarding
suspension or cancellation of any NMR Permits, except where the
failure to possess, or the suspension or cancellation of, such NMR
Permits would not have a NMR Material Adverse Effect. Neither NMR
nor any of its subsidiaries is in conflict with, or in default or
violation of (a) any Law or any rule of professional conduct
applicable thereto and applicable to NMR or any of its subsidiaries
or by which any of their respective properties is bound or subject
to or (b) any of NMR Permits, except for any such conflicts,
defaults or violations which would not have a NMR Material Adverse
Effect.
SECTION 5.7 Reports; Financial Statements. (a) Since
April 1, 1995, (x) NMR has filed timely all forms, reports,
statements and other documents required to be filed with (i) the
Securities and Exchange Commission (the "SEC") including, without
limitation, (A) all Annual Reports on Form 10-KSB, (B) all
Quarterly Reports on Form 10-QSB, (C) all proxy statements relating
to meetings of stockholders (whether annual or special), (D) all
Current Reports on Form 8-K, (E) all other reports or registration
statements and (F) all amendments and supplements to all such
reports and registration statements (collectively referred to as
the "SEC Reports") and (ii) any other applicable state securities
authorities and (y) NMR has filed all forms, reports, statements
and other documents required to be filed with any other applicable
federal or state regulatory authorities, except where the failure
to file any such forms, reports, statements or other documents
referred to in this clause (ii) would not have a NMR Material
Adverse Effect (all such forms, reports, statements and other
documents in clauses (x) and (y) of this Section 5.7(a) being
referred to herein, collectively, as the "Reports"). The Reports,
including all Reports filed after the date of this Agreement and
prior to the Effective Date, (i) were or will be prepared in all
material respects in accordance with the requirements of applicable
Law (including, with respect to the SEC Reports, the Securities Act
and the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such SEC Reports)
and (ii) did not at the time they were filed, or will not at the
time they are filed, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
<PAGE>
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in
the SEC Reports filed prior to or after the date of this Agreement
(i) have been or will be prepared in accordance with the published
rules and regulations of the SEC and generally accepted accounting
principles and (ii) fairly present or will fairly present the
consolidated financial position of NMR and its subsidiaries as of
the respective dates thereof and consolidated results of operations
and cash flows for the periods indicated (including reasonable
estimates of normal and recurring year-end adjustments), except
that (A) any unaudited interim financial statements were or will be
subject to normal and recurring year-end adjustments and (B) any
pro forma financial information contained in such consolidated
financial statements is not necessarily indicative of the
consolidated financial position of NMR and its subsidiaries as of
the respective dates thereof and the consolidated results of
operations and cash flows for the periods indicated.
SECTION 5.8 Absence of Certain Changes or Events.
During the period commencing April 1, 1995, and ending on the date
of this Agreement, there has not been (a) a NMR Material Adverse
Effect or (b) any change by NMR or its subsidiaries in their
accounting methods, principles or practices.
SECTION 5.9 Absence of Litigation. In addition to the
NMR Disclosure Schedule, except as disclosed in the SEC Reports
filed prior to the date of this Agreement, there is no claim,
action, suit, litigation, proceeding, arbitration or, to the
knowledge of NMR, investigation of any kind, at law or in equity
(including actions or proceedings seeking injunctive relief),
pending or, to the knowledge of NMR, threatened in writing against
NMR or any of its subsidiaries or any properties or rights of NMR
or any of its subsidiaries (except for claims, actions, suits,
litigations, proceedings, arbitrations, or investigations which,
individually or in the aggregate, would not reasonably be expected
to have a NMR Material Adverse Effect), and neither NMR nor any of
its subsidiaries is subject to any continuing order of, consent
decree, or, the knowledge of NMR, continuing investigation by, any
Governmental Entity, or any judgment, order, writ, injunction,
decree or award of any Governmental Entity or arbitrator,
including, without limitation, cease-and-desist or other orders,
except for matters which, individually or in the aggregate, would
not have a NMR Material Adverse Effect.
SECTION 5.10 Taxes. Except for such matters that would
not have a NMR Material Adverse Effect and are disclosed in Section
5.10 of the NMR Disclosure Schedule (a) NMR and its subsidiaries
have timely filed or will timely file all returns and reports
required to be filed by them with any taxing authority with respect
to Taxes for any period ending on or before the Effective Date,
<PAGE>
taking into account any extension of time to file granted to or
obtained on behalf of NMR and its subsidiaries, (b) all Taxes shown
to be payable on such returns or reports that are due prior to the
Effective Date have been paid or will be paid when due, (c) as of
the date hereof, no deficiency for any material amount of Tax has
been asserted or assessed by a taxing authority against NMR or its
subsidiaries, (d) all liability for Taxes of NMR or its
subsidiaries that are or will become due or payable with respect to
periods covered by the financial statements referred to in Section
5.7(b) hereof have been paid or adequately reserved for on such
financial statements and (e) no Tax return or reports of NMR or any
of its subsidiaries are under examination.
SECTION 5.11 Certain Business Practices. As of the
date hereof, except for such actions which would not have a NMR
Material Adverse Effect, neither NMR nor any of its subsidiaries
nor, to the knowledge of NMR, any directors, officers, agents or
employees of NMR or any of its subsidiaries has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, (ii) made any unlawful
payment to government officials or employees, or (iii) made any
other unlawful payment.
SECTION 5.12 Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of NMR.
SECTION 5.13 Board Recommendation. The Board of
Directors of NMR, at a meeting duly called and held, has by
requisite vote under applicable Laws (i) determined that this
Agreement and the transactions contemplated hereby, including the
Merger, and the transactions contemplated thereby, taken together,
are fair to and in the best interests of the stockholders of NMR,
and (ii) resolved to recommend that the holders of the shares of
NMR Common Stock approve this Agreement and the transactions
contemplated herein, including the Merger.
SECTION 5.14 Books and Records. The books of account
and other financial records of NMR and its subsidiaries are in all
material respects complete and correct, are maintained in
accordance with good business practices and all Laws applicable to
NMR, and are accurately reflected in the consolidated financial
statements of NMR contained in the SEC Reports. The minute books
of NMR contain accurate records of all meetings, and accurately
reflect all other corporate action of the shareholders and
directors of NMR.
SECTION 5.15 No Undisclosed Liabilities. There are no
liabilities of NMR or any of its subsidiaries of any kind
<PAGE>
whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than:
(a) liabilities disclosed or provided for in the
consolidated financial statements contained in the NMR SEC Reports;
(b) liabilities incurred in the ordinary course of
business consistent with past practice since March 31, 1995; and
(c) liabilities which either individually or
collectively would not have an NMR Material Adverse effect.
SECTION 5.16 Contracts. Listed on Section 5.16 of the
NMR Disclosure Schedule are all contracts and agreements of NMR and
its subsidiaries, oral (in which case a summary thereof should be
provided) and written, including, but not limited to, employment
contracts, leases and management agreements, which require the
payment by or to NMR or an NMR subsidiary of more than $50,000
annually ($25,000 in the case of employment contracts).
SECTION 5.17 Disclosure. No representation or warranty
of NMR in this Agreement or any document, certificate or statement
issued in connection herewith contains any untrue statement of a
material fact or omits to state any material fact necessary in
order to make the statements contained herein and therein, in the
light of the circumstances in which they were made, not misleading.
SECTION 5.18 Affiliates. Concurrently with the
execution and delivery of this Agreement, NMR has delivered to MRI
a letter identifying all persons who, to the knowledge of NMR, may
be deemed to be affiliates of NMR under Rule 145 of the Securities
Act, including, without limitation, all directors and executive
officers of NMR.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF MRI AND SUB
Except as set forth in the Disclosure Schedule to be
delivered by MRI and Sub to NMR (the "MRI Disclosure Schedule"),
which shall identify exceptions by specific Section references, MRI
and Sub hereby represent and warrant to NMR that:
SECTION 6.1 Organization and Qualification;
Subsidiaries. Each of MRI, Sub and their subsidiaries is a
corporation or limited partnership, as the case may be, duly
incorporated (if a corporation), duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation or organization, has all requisite power and
authority to own, lease and operate its properties and to carry on
its business as it is now being conducted and is duly qualified and
in good standing to do business in each jurisdiction in which the
<PAGE>
nature of the business conducted by it or the ownership or leasing
of its properties makes such qualification necessary, other than
where the failure to be in good standing, or to have such power and
authority, or to be duly qualified and in good standing, as the
case may be, would not have a MRI Material Adverse Effect. The
term "MRI Material Adverse Effect" as used in this Agreement shall
mean any event, change or effect that, individually or when taken
together with all other such events, changes or effects, would be
materially adverse to the condition (financial or otherwise),
prospects, properties, assets, business or operations of MRI and
all of its subsidiaries, taken as a whole, at the time of such
event, change or effect.
SECTION 6.2 Certificate of Incorporation and By-Laws.
MRI has heretofore furnished to NMR complete and correct copies of
the Certificates of Incorporation and the By-Laws or the equivalent
organizational documents in each case, as amended or restated, of
MRI and each subsidiary. Neither MRI nor any subsidiary is in
violation of any of the provisions of its Certificate of
Incorporation or By-Laws or Certificate of Limited Partnership, or
equivalent organizational documents, as the case may me.
SECTION 6.3 Capitalization. As of the date of this
Agreement, the authorized capital stock of MRI consists of (a)
20,000,000 shares of MRI Common Stock and (b) 100,000 shares of
preferred stock, par value $.01 per share ("MRI Preferred Stock").
As of the date of this Agreement: (i) 8,911,929 shares of MRI
Common Stock are issued and outstanding, all of which are duly
authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights created by statute, common law, MRI's
Certificate of Incorporation or By-Laws, or any agreement to which
MRI is a party or is bound or otherwise; (ii) 265,000 shares of MRI
Common Stock are held in treasury; and (iii) 1,307,125 shares of
MRI Common Stock are reserved for future issuance pursuant to
outstanding stock options and warrants issued to certain officers,
employees, directors, consultants and other persons. As of the
date of this Agreement, 128 shares of MRI Preferred Stock are
issued and outstanding. The shares of MRI Common Stock to be
issued in the Merger have been duly authorized and, when issued in
accordance with the Merger, will be validly issued, fully paid and
nonassessable. Each of the outstanding shares of capital stock of,
or other equity interests in, each of MRI's subsidiaries is duly
authorized and validly issued and, if applicable, fully paid and
nonassessable. As of the date of this Agreement, there are no
options, warrants or other rights (including registration rights),
agreements, arrangements or commitments of any character to which
MRI or any of its subsidiaries is a party relating to the issued or
unissued capital stock or other securities of MRI to grant, issue
or sell any shares of the capital stock or other securities of MRI
or any of its subsidiaries, by sale, lease, license or otherwise,
except (A) as disclosed in Section 6.3 of the MRI Disclosure
Schedule and (B) for options to purchase MRI Common Stock under
<PAGE>
MRI's existing stock option plans to the extent stock options for
such shares thereunder have not yet been granted. As of the date
of this Agreement, there are no obligations, contingent or
otherwise, of MRI or any of its subsidiaries to repurchase, redeem
or otherwise acquire any shares of MRI Common Stock.
SECTION 6.4 Authority. Each of MRI and Sub has all
requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby (other than with respect to
the Merger, the approval and adoption of this Agreement by the
holders of the MRI Common Stock in accordance with applicable law
or the rules of the NASD). The execution and delivery of this
Agreement by MRI and Sub and the consummation by MRI and Sub of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action and no other corporate proceedings on
the part of MRI or Sub are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby (other than,
with respect to the approval and adoption of this Agreement, by the
holders of a majority of the outstanding shares of MRI Common Stock
in accordance with Delaware Law). This Agreement has been duly
executed and delivered by MRI and Sub and, assuming the due
authorization, execution and delivery thereof by NMR, constitutes
a legal, valid and binding obligation of MRI and Sub enforceable
against MRI and Sub in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights in general from time
to time in effect and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity
or at law).
SECTION 6.5 No Conflict; Required Filings and
Consents. (a) The execution and delivery of this Agreement by MRI
and Sub does not, and the performance of this Agreement by MRI and
Sub and the consummation of the transactions contemplated hereby
will not, excepting any shareholder votes required by applicable
law or the rules of the NASD, (i) conflict with or violate the
Certificate of Incorporation or By-Laws, as amended or restated, of
MRI or Sub, (ii) conflict with or violate any Laws or MRI Permit
(as hereinafter defined) in effect as of the date of this Agreement
applicable to MRI or Sub or by which any of their respective
properties is bound or subject to, including, without limitation,
Section 203 of Delaware Law or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on the properties
or assets of MRI or Sub pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, order,
decree, franchise or other instrument or obligation to which MRI or
Sub is a party or by which MRI or Sub or any of their respective
properties is bound or subject to, except for any such conflicts or
<PAGE>
violations described in clause (ii) or breaches, defaults, events,
rights of termination, amendment, acceleration or cancellation or
liens or encumbrances described in clause (iii) that would not have
a MRI Material Adverse Effect. The Board of Directors of MRI has
taken all actions necessary under Delaware Law, including approving
the transactions contemplated in this Agreement, to ensure that
Section 203 of Delaware Law does not, or will not, apply to the
transactions contemplated in this Agreement. As used herein, "MRI
Permit" shall mean all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents,
certificates, approvals and orders necessary for MRI and its
subsidiaries to own, lease and operate its properties and to carry
on its business as it is now being conducted.
(b) The execution and delivery of this Agreement by
MRI and Sub does not, and the performance of this Agreement by MRI
and Sub will not, as of the date of this Agreement, require MRI or
any subsidiary of MRI to obtain any consent, approval,
authorization or permit of, or to make any filing with or
notification to, any Governmental Entities, except (i) for
applicable requirements, if any, of the Securities Act, the
Exchange Act, Blue Sky Laws, HSR Act and ISRA and the filing and
recordation of appropriate merger documents as required by Delaware
Law and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or
notifications, would not, either individually or in the aggregate,
prevent either MRI or Sub from performing its obligations under
this Agreement or otherwise have a MRI Material Adverse Effect.
SECTION 6.6 Permits; Compliance. Each of MRI and its
subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary
to own, lease and operate its properties and to carry on its
business as it is now being conducted (collectively, the "MRI
Permits"), and there is no action or proceeding or, to the
knowledge of MRI, investigation pending or threatened regarding
suspension or cancellation of any MRI Permits, except where the
failure to possess, or the suspension or cancellation of, such MRI
Permits would not have a MRI Material Adverse Effect. Neither MRI
nor any of its subsidiaries is in conflict with, or in default or
violation of (a) any Law or any rule of professional conduct
applicable thereto and applicable to MRI or any of its subsidiaries
or by which any of their respective properties is bound or subject
to or (b) any of MRI Permits, except for any such conflicts,
defaults or violations which would not have a MRI Material Adverse
Effect.
SECTION 6.7 Reports; Financial Statements. (a) Since
January 1, 1996, MRI and its subsidiaries have timely filed (i) all
forms, reports, statements and other documents required to be filed
with (A) the SEC, including, without limitation, (1) all Annual
<PAGE>
Reports on Form 10-K, (2) all Quarterly Reports on Form 10-Q, (3)
all proxy statements relating to meetings of stockholders (whether
annual or special), (4) all Current Reports on Form 8-K, (5) all
other reports or registration statements and (6) all amendments and
supplements to all such reports and registration statements
(collectively, the "MRI SEC Reports") and (B) any other applicable
state securities authorities and (ii) all forms, reports,
statements and other documents required to be filed with any other
applicable federal or state regulatory authorities, except where
the failure to file any such forms, reports, statements or other
documents referred to in this clause (ii) would not have a MRI
Material Adverse Effect (all such forms, reports, statements and
other documents in clauses (i) and (ii) of this Section 6.6(a)
being referred to herein, collectively, as the "MRI Reports"). The
MRI Reports, including all MRI Reports filed after the date of this
Agreement and prior to the Effective Date (x) were or will be
prepared in all material respects in accordance with the
requirements of applicable Law (including, with respect to the MRI
SEC Reports, the Securities Act and the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder
applicable to such MRI SEC Reports) and (y) did not at the time
they were filed, or will not at the time they are filed, contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in
the MRI SEC Reports filed prior to, on or after the date of this
Agreement (i) have been or will be prepared in accordance with the
published rules and regulations of the SEC and generally accepted
accounting principles and (ii) fairly present or will fairly
present the consolidated financial position of MRI and its
subsidiaries as of the respective dates thereof and the
consolidated results of operations and cash flows for the periods
indicated (including reasonable estimates of normal and recurring
year-end adjustments), except that (A) any unaudited interim
financial statements were or will be subject to normal and
recurring year-end adjustments and (B) any pro forma financial
information contained in such consolidated financial statements is
not necessarily indicative of the consolidated financial position
of MRI and its subsidiaries as of the respective dates thereof and
the consolidated results of operations and cash flows for the
periods indicated.
SECTION 6.8 Absence of Certain Changes or Events.
During the period commencing January 1, 1996 and ending on the date
of this Agreement, there has not been (a) a MRI Material Adverse
Effect or (b) any change by MRI or its subsidiaries in their
accounting methods, principles or practices.
<PAGE>
SECTION 6.9 Absence of Litigation. In addition to the
MRI Disclosure Schedule, except as disclosed in the SEC Reports
filed prior to the date of this Agreement, there is no claim,
action, suit, litigation, proceeding, arbitration or, to the
knowledge of MRI, investigation of any kind, at law or in equity
(including actions or proceedings seeking injunctive relief),
pending or, to the knowledge of MRI, threatened in writing against
MRI or any of its subsidiaries or any properties or rights of MRI
or any of its subsidiaries (except for claims, actions, suits,
litigations, proceedings, arbitrations, or investigations which,
individually or in the aggregate, would not reasonably be expected
to have a MRI Material Adverse Effect), and neither MRI nor any of
its subsidiaries is subject to any continuing order of, consent
decree, or, the knowledge of MRI, continuing investigation by, any
Governmental Entity, or any judgment, order, writ, injunction,
decree or award of any Governmental Entity or arbitrator,
including, without limitation, cease-and-desist or other orders,
except for matters which, individually or in the aggregate, would
not have a MRI Material Adverse Effect.
SECTION 6.10 Taxes. Except for such matters that would
not have a MRI Material Adverse Effect and are disclosed in Section
6.10 of the MRI Disclosure Schedule (a) MRI and its subsidiaries
have timely filed or will timely file all returns and reports
required to be filed by them with any taxing authority with respect
to Taxes for any period ending on or before the Effective Date,
taking into account any extension of time to file granted to or
obtained on behalf of MRI and its subsidiaries, (b) all Taxes shown
to be payable on such returns or reports that are due prior to the
Effective Date have been paid or will be paid when due, (c) as of
the date hereof, no deficiency for any material amount of Tax has
been asserted or assessed by a taxing authority against MRI or its
subsidiaries, (d) all liability for Taxes of MRI or its
subsidiaries that are or will become due or payable with respect to
periods covered by the financial statements referred to in Section
6.7(b) hereof have been paid or adequately reserved for on such
financial statements and (e) no Tax return or reports of MRI or any
of its subsidiaries are under examination.
SECTION 6.11 Certain Business Practices. As of the
date hereof, except for such actions which would not have a MRI
Material Adverse Effect, neither MRI nor any of its subsidiaries
nor, to the knowledge of MRI, any directors, officers, agents or
employees of MRI or any of its subsidiaries has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, (ii) made any unlawful
payment to government officials or employees, or (iii) made any
other unlawful payment.
SECTION 6.12 Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this
<PAGE>
Agreement based upon arrangements made by or on behalf of MRI.
SECTION 6.13 Books and Records. The books of account
and other financial records of MRI and its subsidiaries are in all
material respects complete and correct, are maintained in
accordance with good business practices and all Laws applicable to
MRI, and are accurately reflected in the consolidated financial
statements of MRI contained in the SEC Reports. The minute books
of MRI contain accurate records of all meetings, and accurately
reflect all other corporate action of the shareholders and
directors of MRI.
SECTION 6.14 Contracts. Listed on Section 6.14 of the
MRI Disclosure Schedule are all contracts and agreements of MRI and
its subsidiaries, oral (in which case a summary thereof should be
provided) and written, including, but not limited to, employment
contracts, leases and management agreements, which require the
payment by or to MRI or an MRI subsidiary of more than $50,000
annually ($25,000 in the case of employment contracts).
SECTION 6.15 No Undisclosed Liabilities. There are no
liabilities of MRI or any of its subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than:
(a) liabilities disclosed or provided for in the
consolidated financial statements contained in the MRI SEC Reports;
(b) liabilities incurred in the ordinary course of
business consistent with past practice since December 31, 1995; and
(c) liabilities which either individually or
collectively would not have an MRI Material Adverse effect.
SECTION 6.16 Board Recommendation. The Board of
Directors of MRI, at a meeting duly called and held, has by
requisite vote under applicable laws, (i) determined that this
Agreement and the transactions contemplated hereby, including the
Merger, and the transactions contemplated thereby, taken together,
are fair to and in the best interests of the stockholders of MRI,
and (ii) resolved to recommend that the holders of the shares of
MRI Common Stock approve this Agreement and the transactions
contemplated herein, including the Merger.
SECTION 6.17 Disclosure. No representation or warranty
of MRI or Sub in this Agreement or in any document, certificate or
statement issued in connection herewith contains any untrue
statement of a material fact, or omits to state any material fact
necessary in order to make the statements contained herein and
therein, in light of the circumstances in which they were made, not
misleading.
<PAGE>
ARTICLE 7
COVENANTS
SECTION 7.1 Affirmative Covenants of NMR and MRI. (a)
Each of NMR and MRI hereby covenants and agrees that, during the
period commencing on the date hereof and continuing until the
Effective Date unless otherwise expressly contemplated by this
Agreement or consented to in writing by the other party, it will
and will cause its subsidiaries to:
(i) operate its business only in the usual and
ordinary course consistent with past practices;
(ii) use its best efforts to preserve
substantially intact its business organizations, maintain its
rights and franchises, retain the services of its key employees and
maintain its relationships with its customers and suppliers, and
otherwise operate its business in a manner that breaches no
Material Contract (as defined);
(iii) use its best efforts to maintain and keep
its business relationships intact and unimpaired, and its
properties and assets in as good repair and condition as at
present, ordinary wear and tear excepted;
(iv) use its best efforts to keep in full force
and effect insurance and bonds comparable in amount and scope of
coverage to that currently maintained;
(v) promptly advise the other party of the
commencement of, or threat or (to the extent that such threat comes
to its knowledge), any claim, action, suit, proceeding or
investigation against, relating to or involving it or any of its
directors, officers, employees, agents or consultants in connection
with its businesses or the transactions contemplated hereby;
(vi) provide the other party with unaudited
quarterly consolidating balance sheets and income statements and
unaudited quarterly statements of cash position for each fiscal
quarter following the date of this Agreement as soon as practicable
following the end of each such fiscal quarter and provide the other
party with monthly management reports; and
(vii) promptly provide the other party with
copies of any and all reports or documents filed with the
Securities and Exchange Commission.
(b) NMR will cause its transfer agent to make stock
transfer records relating to, and stockholder lists of, NMR
available to the extent reasonably necessary to effectuate the
intent of this Agreement.
<PAGE>
SECTION 7.2 Negative Covenants of NMR. Except as
expressly contemplated by this Agreement or otherwise consented to
in writing by MRI, from the date of this Agreement until the
Effective Date, NMR will not do, and will not permit any of its
subsidiaries to do, any of the following:
(a) (i) increase the compensation payable to or to
become payable to any director, officer or employee earning more
than $75,000 or being increased to more than $75,000 (provided,
however, that NMR may increase the compensation of any employee
consistent with NMR's customary annual salary increase practices
which, in any event, shall not exceed 10% of an employee's salary
and provided further that NMR and MRI shall consult and mutually
agree upon any transition bonuses and provided further that on the
Effective Date, NMR may pay to Joseph G. Dasti and John P. O'Malley
the termination payments which are a condition to the effectiveness
of their respective Non-Competition and Consulting Agreements
referred to in Section 8.7); (ii) grant any severance or
termination pay (other than pursuant to the normal severance policy
of it or its subsidiaries as in effect on the date of this
Agreement) to, or enter into any employment or severance agreement
with, any director, officer or employee other than employment
agreements entered into with the consent of MRI, which consent
shall not be unreasonably withheld); or (iii) establish, adopt,
enter into or amend any employee benefit plan or arrangement except
as may be required by applicable Law;
(b) declare or pay any dividend on, or make any
other distribution (however characterized) in respect of,
outstanding shares of its capital stock, except for dividends by
its subsidiaries to it or another of its subsidiaries in accordance
with past practice;
(c) (i) redeem, purchase or otherwise acquire any
shares of its or any of its subsidiaries' capital stock or equity
interest or any securities or obligations convertible into or
exchangeable for any shares of its or its subsidiaries' capital
stock or equity interest (other than any such acquisition directly
from any of its wholly-owned subsidiaries in exchange for capital
contributions or loans to such subsidiaries), or any options,
warrants or conversion or other rights to acquire any shares of its
or its subsidiaries' capital stock or any such securities or
obligations (except in connection with the exercise of outstanding
stock options or stock purchase warrants referred to herein, in
accordance with their terms or, in connection with the conversion
of convertible debentures, in accordance with their terms);
(ii) effect any reorganization or recapitalization; or (iii) split,
combine or reclassify any of its or its subsidiaries' capital
stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares
of its or its subsidiaries' capital stock;
<PAGE>
(d) except as otherwise provided by the last
paragraph of this Section 7.2, (i) issue, deliver, award, grant or
sell, or authorize or propose the issuance, delivery, award, grant
or sale (including the grant of any security interests, liens,
claims, pledges, limitations in voting rights, charges or other
encumbrances) of, any shares of any class of its or its
subsidiaries' capital stock or other securities (including shares
held in treasury), any securities convertible into or exercisable
or exchangeable for any such shares, or any rights, warrants or
options to acquire, any such shares (except for the issuance of
shares upon the exercise of outstanding stock options, stock
purchase warrants or the conversion of outstanding convertible
debentures, in accordance with their terms or the issuance of
shares consistent with past practices to the trustee of NMR's 401
(K) Plan); (ii) amend or otherwise modify the terms of any such
rights, warrants or options the effect of which shall be to make
such terms more favorable to the holders thereof; or (iii) subject
to Section 2.1(c), take any action to accelerate the vesting of any
of the stock options;
(e) except as otherwise provided by the last
paragraph of this Section 7.2, acquire or agree to acquire, by
merging or consolidating with, by purchasing an equity interest in
or a portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business
organization or division (other than a wholly-owned subsidiary)
thereof, or otherwise acquire or agree to acquire any assets of any
other person (other than the purchase of assets from suppliers or
vendors in the ordinary course of business and consistent with past
practice) in each case which are material, individually or in the
aggregate, to it and its subsidiaries, taken as a whole;
(f) except as otherwise provided by the last
paragraph of this Section 7.2, sell, lease, exchange, mortgage,
pledge, transfer or otherwise dispose of, or agree to sell, lease,
exchange, mortgage, pledge, transfer or otherwise dispose of, any
of its assets or any assets of any of its subsidiaries outside of
the ordinary course of business; provided, however, that the
foregoing shall not prohibit NMR from proceeding with the
dissolution of Austin MRI Partners, L.P. or pledging any assets to
secure obligations permitted to be incurred by Section 7.1(i)
hereof;
(g) propose or adopt any amendments to its
Certificate of Incorporation or By-Laws, except as otherwise
provided in Section 7.2(g) of NMR's Disclosure Schedule, or its
Stockholders Rights Agreements;
(h) (i) change any of its methods of accounting in
effect, or (ii) make or rescind any express or deemed election
relating to taxes, settle or compromise any claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or
<PAGE>
controversy relating to taxes (except where the amount of such
settlements or controversies, individually or in the aggregate,
does not exceed $50,000), or change any of its methods of reporting
income or deductions for federal income tax purposes from those
employed in the preparation of the federal income tax returns for
the taxable year ended March 31, 1996, except as may be required by
Law or generally accepted accounting principles;
(i) except as set forth in Section 7.2(i) of the
NMR Disclosure Schedule to be provided to MRI by the Due Diligence
Date (as defined) or in conjunction with any of the transactions
permitted under the last paragraph of this Section, incur any
obligation for borrowed money or purchase money indebtedness,
whether or not evidenced by a note, bond, debenture or similar
instrument, except (i) obligations arising from establishment of a
line of credit or similar arrangement not exceeding $6.5 million in
the aggregate and borrowings under such line of credit or similar
arrangement not in excess of $500,000; or (ii) in the ordinary
course of business consistent with past practice and not in excess
of $100,000 in the aggregate;
(j) enter into any material arrangement, agreement
or contract with any third party, other than professional services
agreements with radiologists, which provides for an exclusive
arrangement with that third party or is substantially more
restrictive on NMR, or substantially less advantageous to NMR, than
arrangements, agreements or contracts existing on the date hereof;
(k) amend any of the material terms or provisions
of its capital stock;
(l) except as set forth in Section 7.2(l) of the
NMR Disclosure Schedule, to be delivered to MRI by the Due
Diligence Date (i) make any capital expenditures individually in
excess of $50,000 or in the aggregate in excess of $100,000, (ii)
enter into or terminate (except in the ordinary course of business
and consistent with past practice) any lease of, or purchase or
sell, any real property, or (iii) enter into any leases of personal
property involving individually in excess of $50,000 annually or in
the aggregate in excess of $100,000 annually; and
(m) agree in writing or otherwise to do any of the
foregoing.
Notwithstanding anything contained in the foregoing
Section 7.2 or any other provision of this Agreement, NMR or
affiliates may, (A) without the consent of MRI, (i) effect the sale
of the business of the Cape Coral, Florida facility in the event
Cape Coral Hospital exercises its option to purchase such business
pursuant to the existing ground lease between a subsidiary of NMR
and Cape Coral Hospital, (ii) immediately, prior to the Effective
Date, transfer ownership to Mr. Dasti (or his designee) of the "key
<PAGE>
man" life insurance policy owned by NMR, which insures Mr. Dasti's
life and transfer ownership to Mr. O'Malley (or his designee) of
the "key man" life insurance policy owned by MRI, which insures Mr.
O'Malley's life, (iii) restructure the financial terms of any
outstanding indebtedness of NMR on terms which are more favorable
to NMR than what then exists and (iv) renew existing or enter into
new professional services agreements with radiologists, in
accordance with past practices; and (B) with the prior written
consent of MRI, (i) become a joint venturer with Illinois Masonic
Medical Center to operate a diagnostic imaging center pursuant to
the terms of that certain Agreement dated April 21, 1993 among
Illinois Masonic Medical Center, MR Associates of Chicago and
Imaging Networks, Inc., or (ii) enter into a joint venture
arrangement with Parrish Medical Center for the installation and
operation of magnetic resonance imaging equipment.
SECTION 7.3 Negative Covenants of MRI. Except as
expressly contemplated by this Agreement or otherwise consented to
in writing by NMR, from the date of this Agreement until the
Effective Time, MRI will not do, and will no permit any of its
subsidiaries to do, any of the following:
(a) declare or pay any dividend on, or make any
other distribution in respect of, outstanding shares of its capital
stock, except for dividends by its subsidiaries to it or another of
its subsidiaries in accordance with past practice;
(b) (i) redeem, purchase or otherwise acquire any
shares of its or any of its subsidiaries' capital stock or equity
interest or any securities or obligations convertible into or
exchangeable for any shares of its or its subsidiaries' capital
stock or equity interest (other than any such acquisition directly
from any of its wholly-owned subsidiaries in exchange for capital
contributions or loans to such subsidiaries), or any options,
warrants or conversion or other rights to acquire any shares of its
or its subsidiaries' capital stock or any such securities or
obligations (except in connection with the exercise of outstanding
stock options or stock purchase warrants referred to herein, in
accordance with their terms or, in connection with the conversion
of convertible debentures, in accordance with their terms); (ii)
effect any reorganization or recapitalization; or (iii) split,
combine or reclassify any of its or its subsidiaries' capital stock
or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares
of its or its subsidiaries' capital stock;
(c) propose or adopt any amendments to its
Certificate of Incorporation or By-Laws, except as otherwise
provided in Section 7.2(c) of MRI's Disclosure Schedule;
(d) (i) change any of its methods of accounting in
effect, or (ii) make or rescind any express or deemed election
<PAGE>
relating to taxes, settle or compromise any claim, action, suit
litigation, proceeding, arbitration, investigation, audit or
controversy relating to taxes (except where the amount of such
settlements or controversies, individually or in the aggregate,
does not exceed $50,000), or change any of its methods of reporting
income or deductions for federal income tax purposes from those
employed in the preparation of the federal income tax returns for
the taxable year ended December 31, 1995, except as may be required
by Law or generally accepted accounting principles;
(e) enter into any material arrangement, agreement
or contract with any third party, other than radiology contracts
which provides for any exclusive arrangement with that third party
or is substantially more restrictive on MRI, or substantially less
advantageous to MRI, than arrangements, agreements or contracts
existing on the date hereof; provided, however, that MRI shall be
permitted to renew existing or enter into new professional services
agreements with radiologists in accordance with past practice.
(f) amend any of the material terms or provision of
its capital stock;
(g) (i) issue, deliver, award, grant or sell, or
authorize or propose the issuance, delivery, award, grant or sale
(including the grant of any security interests, liens, claims,
pledges, limitations in voting rights, charges or other
encumbrances) of, any shares of any class of its or its
subsidiaries' capital stock or other securities (including shares
held in treasury), any securities convertible into or exercisable
or exchangeable for any such shares, or any rights, warrants or
options to acquire, any such shares (except for the issuance of
shares upon the exercise of outstanding stock options, stock
purchase warrants or the conversion of outstanding convertible
debentures, in accordance with their terms or (ii) amend or
otherwise modify the terms of any such rights, warrants or options,
the effect of which shall be to make such terms more favorable to
the holders thereof; provided, however, that until the earlier to
occur of (A) July 31, 1996 or (B) the date upon which NMR and MRI
shall have submitted written responses to the SEC's initial
comments to the Registration Statement (as such term is defined in
Section 8.2) (such earlier date is herein referred to as the
"Transaction Termination Date") the Company may enter into
definitive agreements relating to Permitted Transactions (as that
term is defined herein below), and consummate such transactions
thereafter; a "Permitted Transaction" is one or more acquisitions
by MRI of entities related to MRI's core businesses with aggregate
consideration in the form of cash, securities or notes, not
exceeding $15,000,000 (excluding the assumption of debt of the
acquired entities).
(h) other than in connection with Permitted
Transactions in which definitive agreements are entered into on or
<PAGE>
prior to the Transaction Termination Date (which Permitted
Transactions may be consummated after such date), acquire or agree
to acquire, by merging or consolidating with, by purchasing an
equity interest in or a portion of the assets of, or by any other
manner, any business or any corporation, partnership, association
or other business organization or division (other than a wholly-
owned subsidiary) thereof, or otherwise acquire or agree to acquire
any assets of any other person (other than the purchase of assets
from suppliers or vendors in the ordinary course of business and
consistent with past practice) in each case which are material,
individually or in the aggregate, to it and its subsidiaries, taken
as a whole;
(i) other than in connection with Permitted
Transactions in which definitive agreements are entered into on or
prior to the Transaction Termination Date (which Permitted
Transactions may be consummated after such date), sell, lease,
exchange, mortgage, pledge, transfer or otherwise dispose of, or
agree to sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, any of its assets or any assets of any of its
subsidiaries outside of the ordinary course of business;
(j) agree in writing or otherwise to do any of the
foregoing.
SECTION 7.4 Access and Information. Between the date
of this Agreement and the Effective Date or earlier termination of
this Agreement, each of MRI and NMR shall, and shall cause its
subsidiaries to (i) afford the other party and its officers,
directors, employees, accountants, consultants, legal counsel,
agents and other representatives (collectively, the
"Representatives") access upon reasonable prior notice to its
officers, employees, agents, properties, offices and other
facilities and to the books and records thereof and (ii) furnish
promptly to the other party and its Representatives such
information concerning the business, properties, contracts, records
and personnel of it and its subsidiaries (including, without
limitation, financial, operating and other data and information) as
may be requested, from time to time, by the other party. All of
such data and information shall be subject to the terms and
conditions of the confidentiality agreement each signed for the
benefit of the other party dated May 1, 1996 (the "Confidentiality
Agreement").
SECTION 7.5 Confidentiality. The parties will comply
with all of their respective obligations under the Confidentiality
Agreement.
SECTION 7.6 No Solicitation of Business Transactions
by NMR; Fee Payable for Violation. (a) Between the date hereof and
the earlier to occur of (i) termination of this Agreement in the
event that this Agreement is terminated pursuant to Sections
<PAGE>
10.1(a), 10.1(b), 10.1(c), 10.1(d) or 10.1(i); (ii) January 31,
1997 in the event that this Agreement is terminated pursuant to
Section 10.1(e) and (iii) three months following the date this
Agreement terminates, but no later than January 31, 1997, in the
event this Agreement terminates pursuant to Section 10.1(f),
10.1(g) or 10.1(h) (the "No-Shop Period"), neither NMR nor MRI (the
"Target Company," as the case may be) shall, nor shall it permit
any of its principals, agents or representatives to initiate,
solicit or encourage (including by way of furnishing information or
assistance), or take any other action intended to facilitate, any
inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Business Transaction (as
hereinafter defined), or enter into discussions or negotiate with
any person or entity in furtherance of such inquiries or to obtain
a Business Transaction, or agree to or endorse any Business
Transaction, or authorize or permit any of its officers, directors
or employees or any of its subsidiaries or any investment banker,
financial advisor, attorney, accountant or other representative
retained by its or any of its subsidiaries to take any such action;
provided, however, that nothing contained in this subsection (a)
shall prohibit the Board of Directors of the Target Company from
(i) furnishing information to, or entering into discussions or
negotiations with, any persons or entity in connection with an
unsolicited bona fide proposal by such person or entity to enter
into a Business Transaction if, and only to the extent that (A) the
Board of Directors of the Target Company, after consultation with
independent legal counsel (which may include its regularly engaged
outside legal counsel), determines in good faith that such action
is required for the Board of Directors of the Target Company to
comply with its fiduciary duties to stockholders imposed by
Delaware Law and (B) prior to furnishing such information to, or
entering into discussions or negotiations with, such person or
entity, the Target Company (x) provides written notice to the other
party (the "Other Party") to the effect that it is furnishing
information to, or entering into discussions or negotiations with,
such person or entity and, unless the Target Company receives the
written advice of counsel from the Target Company's independent
counsel that disclosure would violate Delaware law, promptly notify
the Other Party of all relevant terms of any such inquiries and
proposals received relating to any of such matters, and
(y) receives from such person or entity an executed confidentiality
agreement on terms no less favorable to NMR or MRI than those
contained in the Confidentiality Agreement between NMR and MRI; or
(ii) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to a Business Transaction. For purposes of this
Agreement, "Business Transaction" shall be defined as any merger,
acquisition, whether in the form of a consolidation, share exchange
or otherwise having an aggregate value of $35 million or more; or
any sale, transfer, lease or other disposition of 50% or more of
the assets of the Target Company and its subsidiaries or 50% of the
capital stock of the Target Company, in each case, in a transaction
or related series of transactions.
<PAGE>
(b) If the Target Company publicly announces its
intention to or enters into an agreement providing for a Business
Transaction on or prior to the end of the No-Shop Period (the
"Transaction Event"), the Target Company shall pay to the Other
Party, in consideration of the time, effort and resources expended
in connection herewith, $2,000,000 (less any amounts paid by the
Target Company to the Other Party pursuant to Section 10.5(c)) plus
any fees and expenses incurred in connection with collecting such
amount (the "Transaction Fee"). The Transaction Fee shall be
payable no later than ten business days after the Transaction Event
and shall be made by wire transfer of immediately available funds
to an account designated by the Other Party.
SECTION 7.7 Additional Affirmative Covenant of MRI.
MRI agrees that it shall, simultaneous with the Effective Date,
make a capital contribution to NMR in such amount, if any, as shall
be necessary to permit NMR to make the termination payments to
Joseph G. Dasti and John P. O'Malley which are a condition to the
effectiveness of their respective Non-Competition and Consulting
Agreements referred to in Section 8.7.
SECTION 7.8 Directors' and Officers' Indemnification.
In the event the Merger shall become effective, then from and after
the Effective Date, MRI and the Surviving Corporation (the
"Indemnifying Parties") shall indemnify, defend and hold harmless
each person who is now, or who becomes prior to the Effective Date,
an officer, director, employee or agent of MRI or NMR (the
"Indemnified Parties") against (i) all losses, claims, damages,
cost, expenses, liability or judgment or amounts paid wit the
approval of the Indemnifying Party (which approval shall not be
unreasonably withheld) in settlement of or in connection with any
claim, action, suit, proceeding or investigation based in whole or
in part on or arising in whole or in part out of the fact that such
person is or was an officer, director, employee or agent of MRI or
NMR, whether pertaining to any matter existing or occurring at or
prior to the Effective Date, and whether asserted or claimed prior
to, at or after, the Effective Date (the "Indemnified Liabilities")
and (ii) all Indemnified Liabilities based in whole or in part on
or arising in whole or in part out of or pertaining to this
Agreement or the transactions contemplated hereby, including,
without limitation, any Indemnified Liabilities arising under or
out of any state or federal securities laws, in each case to the
fullest extent permitted by law (and MRI and the Surviving
Corporation, as the case may be, shall pay expenses in advance of
the final disposition of any such action or proceeding to each
Indemnified Party to the fullest extent permitted by law upon
receipt of any undertaking that may be required by law).
<PAGE>
ARTICLE 8
ADDITIONAL AGREEMENTS
SECTION 8.1 Meetings of Stockholders. NMR and MRI
shall each, promptly after the date of this Agreement, take all
action necessary in accordance with Delaware Law, NASDAQ and their
respective Certificates of Incorporation and By-Laws to convene the
Stockholders' Meeting of its stockholders to act on this Agreement.
NMR and MRI shall each use its reasonable best efforts to solicit
from their respective stockholders proxies in favor of the approval
and adoption of this Agreement and to secure the vote or consent of
stockholders required by Delaware Law or NASDAQ to approve and
adopt this Agreement, unless otherwise required by the applicable
fiduciary duties of the directors of NMR or MRI, as determined by
such directors in good faith after consultation with independent
legal counsel.
SECTION 8.2 Registration Statement; Proxy Statement.
(a) As promptly as practicable after the execution of this
Agreement, MRI shall prepare and file with the SEC a registration
statement on Form S-4 (the registration statement, together with
the amendments thereto, being the "Registration Statement"),
containing a proxy statement/prospectus, in connection with the
registration under the Securities Act of the MRI Common Stock
constituting the Merger Consideration and the other transactions
contemplated by the Agreement. As promptly as practicable after
the execution of this Agreement, NMR and MRI shall prepare and file
with the SEC a Joint Proxy Statement that will be the same proxy
statement/prospectus contained in the Registration Statement, and
a form of proxy, in connection with the votes of NMR's and MRI's
stockholders with respect to the Merger (such proxy statement/
prospectus, together with any amendments thereof or supplements
thereto, in each case in the form or forms mailed to NMR's and
MRI's stockholders, being the "Proxy Statement"). Each of MRI and
NMR will use all reasonable best efforts to have or cause the
Registration Statement to become effective as promptly as
practicable, and shall take any action required to be taken under
any applicable federal or state securities laws in connection with
the issuance of shares of MRI Common Stock in the Merger. Each of
MRI and NMR shall furnish all information concerning it and the
holders of its capital stock as the other may reasonably request in
connection with such actions. As promptly as practicable after the
Registration Statement shall have become effective, NMR and MRI
shall mail the Proxy Statement to their respective stockholders.
The Proxy Statement shall include the recommendations of NMR's and
MRI's Board of Directors in favor of the Merger unless otherwise
required by the applicable fiduciary duties of the directors of NMR
or MRI, as determined by such directors in good faith after
consultation with independent legal counsel. The parties shall use
their best efforts to file the Registration Statement and Proxy
<PAGE>
Statement no later than eight weeks following the date of this
Agreement.
(b) The information supplied by MRI to NMR for
inclusion in the Registration Statement shall not, at the time the
Registration Statement is declared effective, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading. The information supplied by MRI
for inclusion in the Proxy Statement to be sent to the stockholders
of NMR and MRI in connection with the Stockholders Meetings shall
not, at the date the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to stockholders, at the time of
the Stockholders' Meetings or at the Effective Date, 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. If at any time prior to the
Effective Date any event or circumstance relating to MRI or any of
its affiliates, or its or their respective officers or directors,
should be discovered by MRI which should be set forth in an
amendment to the Registration Statement or a supplement to the
Proxy Statement, MRI shall promptly inform NMR. All documents that
MRI is responsible for filing with the SEC in connection with the
transactions contemplated herein will comply as to form and
substance in all material respects with the applicable requirements
of the Securities Act and the rules and regulations thereunder and
the Exchange Act and the rules and regulations thereunder.
(c) The information supplied by NMR for inclusion
in the Registration Statement shall not, at the time the
Registration Statement is declared effective, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading. The information supplied by NMR
for inclusion in the Proxy Statement in connection with the
Stockholders' Meetings shall not, at the date the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to
stockholders, at the time of the Stockholders' Meetings or at the
Effective Date, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading. If at
any time prior to the Effective Date any event or circumstance
relating to NMR or any of its respective affiliates, or to their
respective officers or directors, should be discovered by NMR which
should be set forth in an amendment to the Registration Statement
or a supplement to the Proxy Statement, NMR shall promptly inform
MRI. All documents that NMR is responsible for filing with the SEC
in connection with the transactions contemplated herein will comply
as to form and substance in all material respects with the
applicable requirements of the Securities Act and the rules and
<PAGE>
regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
SECTION 8.3 Appropriate Action; Consents; Filings.
(a) NMR and MRI shall each use their best efforts to (i) take, or
cause to be taken, all appropriate action, and do, or cause to be
done, all things necessary, proper or advisable under applicable
Law or otherwise to consummate, satisfy the conditions to, and make
effective the transactions contemplated by this Agreement,
(ii) obtain from any Governmental Entities or other persons any
consents, licenses, permits, waivers, approvals, authorizations or
orders required to be obtained or made by MRI or NMR or any of
their subsidiaries in connection with the authorization, execution
and delivery of this Agreement and the consummation of the
transactions contemplated herein, including, without limitation,
the Merger, (iii) make all necessary filings, and thereafter make
any other required submissions, with respect to this Agreement and
the Merger required under (A) the Securities Act and the Exchange
Act and the rules and regulations thereunder, and any other
applicable federal or state securities laws, and (B) any other
applicable Law; provided that MRI and NMR shall cooperate with each
other in connection with the making of all such filings, including
providing copies of all such documents to the nonfiling party and
its advisors prior to filing and, if requested, to accept all
reasonable additions, deletions or changes suggested in connection
therewith. To assist in obtaining necessary consents from NMR's
lenders, MRI Sub agrees to offer the type and nature of collateral,
guaranty and other security at Closing to secure NMR's existing
indebtedness which is no less favorable to NMR's present lenders
than the assets which currently secure the NMR indebtedness. NMR
and MRI shall furnish all information required for any application
or other filing to be made pursuant to the rules and regulations of
any applicable Law (including all information required to be
included in the Proxy Statement and the Registration Statement) in
connection with the transactions contemplated by this Agreement.
(b) Without limiting the application of Article X
hereof and subject to the respective fiduciary obligations of the
directors of NMR and MRI, each of NMR and MRI agree to cooperate
and use their best efforts vigorously to contest and resist any
action, including administrative or judicial action, and to have
vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order (whether temporary, preliminary or
permanent) (an "Order") that is in effect and that restricts,
prevents or prohibits the consummation of the Merger or any other
transactions contemplated by this Agreement, including, without
limitation, by vigorously pursuing all available avenues of
administrative and judicial appeal; provided, however, that in no
event shall either party take, or be required to take, any action
that would have a NMR Material Adverse Effect or a MRI Material
Adverse Effect.
<PAGE>
(c) Each of NMR and MRI shall give (or shall cause
their respective subsidiaries to give) any notices to third
parties, and use, and cause their respective subsidiaries to use,
its best efforts to obtain any third party consents (i) necessary,
proper or advisable to consummate the transactions contemplated in
this Agreement, (ii) disclosed or required to be disclosed in the
NMR Disclosure Schedule or the MRI Disclosure Schedule, as the case
may be, (iii) otherwise required under any contracts, licenses,
leases or other agreements in connection with the consummation of
the transactions contemplated herein or (iv) required to prevent a
NMR Material Adverse Effect from occurring prior to or after the
Effective Date or a MRI Material Adverse Effect from occurring
prior to or after the Effective Date.
(d) In the event that either party shall fail to
obtain any third party consent described in subsection (c) above,
such party shall use its best efforts, and shall take any such
actions reasonably requested by the other party hereto, to minimize
any adverse effect upon NMR and MRI, their respective subsidiaries,
and their respective businesses resulting, or which could
reasonably be expected to result, after the Effective Date, from
the failure to obtain such consent.
SECTION 8.4 Affiliates. NMR will advise its
affiliates (as such term is defined in Rule 405 under the
Securities Act) of the resale restrictions imposed by federal
securities laws, including Rule 145 under the Securities Act on
the shares of MRI Common Stock received by them pursuant to the
Merger, and will use its best efforts to obtain from each such
affiliate a letter stating that such affiliate is aware of such
restrictions.
SECTION 8.5 Public Announcements. Unless otherwise
required by applicable Law or stock exchange requirements or the
requirements of the NASD (and in that event only if time does not
permit), MRI and NMR shall consult with each other before issuing
any press release or otherwise making any public statements with
respect to the Merger and the transactions contemplated thereby and
shall not issue any such press release or make any such public
statement prior to such consultation.
SECTION 8.6 NASDAQ Listing. MRI shall use its best
efforts to cause the shares of MRI Common Stock to be issued in
connection with the Merger to be approved for quotation on the
NASDAQ-National Market System prior to the Effective Date.
SECTION 8.7 Existing Executive Employment
Arrangements. NMR shall enter into agreements with Messrs. Joseph
G. Dasti and John P. O'Malley in the form annexed hereto as Exhibit
8.7A (the "NMR Executive Agreements"). MRI shall enter into non-
competition and consulting agreements with Messrs. Dasti and
O'Malley in the form annexed hereto as Exhibit 8.7B (the "Non-
<PAGE>
Competition and Consulting Agreements").
SECTION 8.8 Disclosure Schedules. Each of NMR and MRI
shall deliver their Disclosure Schedules to the other within
fifteen business days from the date of this Agreement.
SECTION 8.9 Financial Advisors. Each of NMR and MRI
shall retain a nationally recognized investment banking firm to
render its written opinion to its Board of Directors to the effect
that the terms of the Merger are fair, from a financial point of
view, to such party and its stockholders. The firm retained by NMR
is referred to herein as "NMR's Financial Advisor" and the firm
retained by MRI is referred to herein as "MRI's Financial Advisor."
ARTICLE 9
CLOSING CONDITIONS
SECTION 9.1 Conditions to Obligations of Each Party
Under This Agreement. The respective obligations of each party to
effect the Merger and the other transactions contemplated herein
shall be subject to the satisfaction at or prior to the Effective
Date of the following conditions, any or all of which may be
waived, in whole or in part, to the extent permitted by applicable
Law:
(a) Effectiveness of the Registration Statement.
The Registration Statement shall have been declared effective by
the SEC under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement shall have been issued
by the SEC and no proceedings for that purpose shall have been
initiated by the SEC. All necessary state securities and blue sky
permits, approvals and exemption orders required in connection with
the transactions contemplated by this Agreement shall have been
obtained.
(b) Stockholder Approval. This Agreement and the
Merger shall have been approved and adopted by the requisite votes
of the stockholders of each of NMR and MRI.
(c) No Order. No Governmental Entity or federal or
state court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and which
has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger.
(d) HSR Act. The waiting period under the HSR Act,
if applicable, shall have expired or been terminated.
<PAGE>
SECTION 9.2 Additional Conditions to Obligations of
MRI. The obligations of MRI to effect the Merger and the other
transactions contemplated herein are also subject to the
satisfaction, on or prior to the Closing Date, of each of the
following conditions (any of which may be waived by MRI in its sole
discretion):
(a) Representations and Warranties. The
representations and warranties of NMR contained in this Agreement
shall be true and correct in all material respects as of the
Effective Date as though made on and as of the Effective Date,
except as expressly permitted or contemplated by this Agreement,
and the aggregate effect of all differences in the representations
and warranties of NMR between those as of the date of this
Agreement and those as of the Effective Date does not and will not
have an NMR Material Adverse Effect. MRI shall have received a
certificate of the President or Executive Vice President-Finance of
NMR to such effect.
(b) Agreements and Covenants. NMR shall have
performed or complied with all agreements and covenants required by
this Agreement to be performed or complied with by it in all
material respects prior to the Effective Date. MRI shall have
received a certificate of the President or Executive Vice
President-Finance of NMR to such effect.
(c) Consents and Approvals. All material consents,
approvals and authorizations legally required to be obtained to
consummate the Merger shall have been obtained from all required
Governmental Entities and any other third party.
(d) Opinion of NMR's Counsel. MRI shall have
received an opinion, dated the Effective Date, of McCarter &
English, counsel to NMR, in form and substance reasonably
satisfactory to MRI substantially in the form set forth as Schedule
9.2(d).
(e) No NMR Material Adverse Effect. Since December
31, 1995, there shall have been no NMR Material Adverse Effect nor
shall there have occurred prior to the Effective Date any change,
occurrence or circumstance in the business, results of operations
or financial condition of NMR or any of its subsidiaries likely to
have, individually or in the aggregate, a NMR Material Adverse
Effect. MRI shall have received a Certificate of each of the
President and the Chief Financial Officer of NMR to such effect.
(f) Stockholders Rights Agreement. The Board of
Directors of NMR shall not have amended or modified the NMR
Stockholders Rights Agreement, except as contemplated by this
Merger Agreement, and shall have taken whatever action is necessary
so as not to trigger the rights under such agreement.
<PAGE>
(g) Appraisal Rights. The holders of more than ten
(10%) percent of the issued and outstanding shares of NMR Common
Stock shall not have demanded appraisal rights in respect of the
Merger.
(h) Certificates. MRI shall have received such
certificates from officers and representatives of NMR as it shall
have reasonably requested, including those matters set forth in
Section 9.2(h) of the NMR Disclosure Schedule.
(i) Affiliates' Letters. NMR shall have obtained
from each person who is an "affiliate" (as such term is defined in
Rule 144 of the Securities Act) of NMR an executed letter agreement
to the effect that such person will not sell or otherwise transfer
any shares of MRI Common Stock received pursuant to the Merger
except pursuant to an effective registration statement or in
compliance with Rule 145 or other exemption from the registration
requirements of the Securities Act.
SECTION 9.3 Additional Conditions to Obligations of
NMR. The obligations of NMR to effect the Merger and the other
transactions contemplated in this Agreement are also subject to the
satisfaction, on or prior to the Closing Date, of each of the
following conditions (any of which may be waived by NMR in its sole
discretion):
(a) Representations and Warranties. The
representations and warranties of MRI contained in this Agreement
shall be true and correct in all material respects as of the
Effective Date, except as expressly permitted or contemplated by
the terms of this Agreement and the aggregate effect of all
differences in the representations and warranties of MRI between
those as of the date of this Agreement and those as of the
Effective Date does not and will not have an MRI Material Adverse
Effect. In the event this Agreement is assigned by Sub pursuant to
Section 11.7 of this Agreement, any representation or warranty made
by MRI in this Agreement with respect to Sub shall be deemed to
have been made by MRI with respect to such entity and shall be true
and correct in all material respects as of the Effective Date and
NMR shall have received a certificate of a Co-President or Senior
Vice President (or equally senior officer) to such effect.
(b) Agreements and Covenants. MRI shall have
performed or complied with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior
to the Effective Date. NMR shall have received a certificate of a
Co-President or Senior Vice President (or equally senior officer)
of MRI to such effect.
(c) Consents and Approvals. All material consents,
approvals and authorizations legally required to be obtained to
consummate the Merger shall have been obtained from and made with
<PAGE>
all required Governmental Entities and any other third party
(d) Opinion of Counsel to MRI. NMR shall have
received an opinion, dated the Effective Date, of Werbel McMillin
& Carnelutti, A Professional Corporation, counsel to MRI, in form
and substance reasonably satisfactory to NMR, substantially in the
form set forth as Schedule 9.3(d).
(e) No MRI Material Adverse Effect. Since December
31, 1995, there shall have been no MRI Material Adverse Effect nor
shall there have occurred prior to the Effective Date any change,
occurrence or circumstance in the business, results of operations
or financial condition of MRI or any MRI subsidiary likely to have,
individually or in the aggregate, a MRI Material Adverse Effect.
NMR shall have received a Certificate of a Co-President or Senior
Vice President (or equally senior officer) of MRI to such effect.
(f) Certificates. NMR shall have received such
certificates from officers and representatives of MRI as it shall
have reasonably requested, including those set forth in Section
9.3(f) of the MRI Disclosure Statement.
(g) Tax Opinion. NMR shall have received an
opinion of NMR's tax counsel that the Merger will be treated as a
tax-free exchange to NMR stockholders.
ARTICLE 10
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.1 Termination. This Agreement may be
terminated at any time prior to the Effective Date, whether before
or after approval of this Agreement and the Merger by the
stockholders of each of NMR and MRI:
(a) by mutual written consent of MRI and NMR;
(b) by MRI, if any representation or warranty made
by NMR in this Agreement shall not have been true when made and
such breach would have or would be reasonably likely to have an NMR
Material Adverse Effect or the failure of NMR to satisfy its
obligations under Section 9.2(b);
(c) by NMR, if any representation or warranty made
by MRI in this Agreement shall not have been true when made and
such breach would have or would be reasonably likely to have an MRI
Material Adverse Effect or the failure of MRI to satisfy its
obligations under Section 9.3(b);
(d) by either MRI or NMR, if there shall be any
Order which is final and nonappealable preventing the consummation
of the Merger, except if the party relying on such Order has not
<PAGE>
complied with its obligations under Section 8.3(b);
(e) by either MRI or NMR, if the Effective Date
shall not have occurred before December 31, 1996; provided,
however, that the right to terminate this Agreement pursuant to
this Section 10.1(e) shall not be available to any party whose (or
whose affiliates(s)) breach of any representation or warranty or
failure to perform or comply with any obligation under this
Agreement has been the cause of, or resulted in, the failure of the
Effective Date to occur on or before such date;
(f) by either MRI or NMR, if the Agreement shall
fail to receive the requisite votes for approval and adoption by
the stockholders of each of NMR and MRI at the Stockholders'
Meeting or if any of the conditions specified in Section 9.1 shall
not have been met in all material respects or waived prior to such
time as such condition can no longer be satisfied;
by either MRI or NMR, (i) at any time prior to
11:59 p.m. New York City time on June 19, 1996 (or at such later
date as mutually agreed upon by the parties hereto) (the "Due
Diligence Date"), if the results of its due diligence investigation
of the other party's affairs and business operations make it
inadvisable or undesirable in such party's sole and reasonable
discretion to proceed with the transactions contemplated hereby; or
(ii) if the written fairness opinion by MRI's or NMR's Financial
Advisor is not delivered to the appropriate party by June 14, 1996;
(h) by MRI or NMR at any time prior to the
Effective Date if (i) in the case of termination by MRI, any of the
conditions specified in Section 9.2(a) and 9.2(c) through (i) shall
not have been met or waived prior to such time as such condition
can no longer be satisfied or (ii) in the case of termination by
NMR, any of the conditions specified in Section 9.3(a) and 9.3(c)
through (g) shall not have been met or waived prior to such time as
such condition can no longer be satisfied; or
(i) if a Transaction Event occurs, in which event
the Target Company shall pay to the Other Party the amounts set
forth in Section 7.6(b).
The right of any party hereto to terminate this Agreement
pursuant to this Section 10.1 shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of any party hereto, any person controlling any such party
or any of their respective officers or directors, whether prior to
or after the execution of this Agreement.
SECTION 10.2 Effect of Termination. Subject to the
provisions of Section 11.1(b), in the event of the termination of
this Agreement pursuant to Section 10.1, this Agreement shall
forthwith become void, there shall be no liability on the part of
<PAGE>
MRI or NMR or any of their respective officers or directors to the
other and all rights and obligations of any party hereto shall
cease. Notwithstanding the foregoing, nothing herein shall relieve
any party of liability for failure to perform or comply with any
obligation under Sections 7.4 and 7.5 of this Agreement prior to
the termination hereof.
SECTION 10.3 Amendment. To the extent permitted by
applicable law, this Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Date; provided,
however, that, after approval of the Merger by the stockholders of
each of NMR and MRI, no amendment may be made which would reduce
the amount or change the type of consideration into which each
share of NMR Common Stock shall be converted pursuant to this
Agreement upon consummation of the Merger. This Agreement may not
be amended except by an instrument in writing signed by the parties
hereto.
SECTION 10.4 Waiver. At any time prior to the
Effective Time, any party hereto may a) extend the time for the
performance of any of the obligations or other acts of the other
party hereto, b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document
delivered pursuant hereto and c) waive compliance by the other
party with any of the agreements or conditions contained herein.
Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party or parties to be bound
thereby.
SECTION 10.5 Fees, Expenses and Other Payments.
(a) Except as provided in Sections 7.6(b) or 10.5(c), all Expenses
(as defined in paragraph (b) of this Section 10.5) incurred by the
parties hereto shall be borne solely and entirely by the party
which has incurred such Expenses; provided, however, that the
allocable share of each of MRI and NMR for all Expenses related to
drafting, preparing, printing, filing and mailing the Registration
Statement and the Proxy Statement and all SEC and other regulatory
filing fees incurred in connection with the Registration Statement
and the Proxy Statement shall be one-half. Each party shall
disclose to the other any agreement with respect to such Expenses
and shall advise the other as to the then current Expenses during
the course of the transaction contemplated hereby.
(b) "Expenses" as used in this Agreement shall
include all reasonable out-of-pocket expenses (including, without
limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection
with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement, the preparation,
printing, filing and mailing of the Registration Statement and the
<PAGE>
Proxy Statement and the mailing of the Proxy Statement, the
solicitation of stockholder approvals and all other matters related
to the closing of the transactions contemplated herein.
(c) If this Agreement shall be terminated (i) by
NMR pursuant to Section 10.1(c), (ii) by MRI pursuant to Section
10.1(b) (either of such events in (i) and (ii) shall be deemed a
"Breach Event"), or (iii) by either party pursuant to Section 10(f)
for the sole reason that the Merger is not approved by the
stockholders (a "Non-Approval Event"), then the other party shall
pay to the non-breaching party (NMR in (i), MRI in (ii) and the
party whose stockholders approved the Merger in (iii) are herein
referred to as a "Non-Breaching Party"), in consideration of the
time, effort and resources expended in connection herewith, an
amount equal to, in the case of a Breach Event, the sum of
$2,000,000, and, in the case of a Non-Approval Event, $1,000,000,
plus in all such cases any fees or expenses incurred by the Non-
Breaching Party in connection with the collection of such amount
(the "Collection Expenses").
(d) Any payment required to be made pursuant to
Section 10.5(c) shall be made to the Non-Breaching Party entitled
to receive such payment not later than ten (10) days after delivery
to the other party of notice of demand for payment and an
itemization setting forth in reasonable detail all Collection
Expenses, if any, of the Non-Breaching Party and shall be made by
wire transfer of immediately available funds to an account
designated by the Non-Breaching Party in the notice of demand for
payment delivered pursuant to this Section 10.5(d).
ARTICLE 11
GENERAL PROVISIONS
SECTION 11.1 Effectiveness of Representations,
Warranties and Agreements. (a) Except as set forth in Section
11.1(b), the representations, warranties and agreements of each
party hereto shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any other
party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of
this Agreement.
(b) Notwithstanding anything to the contrary
contained herein, the representations, warranties and agreements in
this Agreement shall terminate at the Effective Date or upon the
termination of this Agreement pursuant to Article 10, except that
the agreements set forth in Articles 1, 2, 3 and 4 shall survive
the Effective Date and those set forth in Sections 7.4, 7.5, 7.6
(to the extent provided therein), 10.2, 10.5 and Article 11 hereof
shall survive termination.
<PAGE>
SECTION 11.2 Notices. All notices and other
communications given or made pursuant hereto shall be in writing
and shall be deemed to have been duly given or made as of the date
delivered, mailed or transmitted, and shall be effective upon
receipt, if delivered personally, mailed by registered or certified
mail (postage prepaid, return receipt requested) to the parties at
the following addresses (or at such other address for a party as
shall be specified by like changes of address) or sent by
electronic transmission to the telecopier number specified below:
(a) If to MRI:
Medical Resources, Inc.
155 State Street
Hackensack, New Jersey
Attention: Mr. William D. Farrell
and
Medical Resources, Inc.
2701 N. Rocky Point Drive
Suite 650
Tampa, Florida 33607
Attention: Mr. Robert J. Adamson
with a copy to:
Werbel McMillin & Carnelutti
711 Fifth Avenue
New York, New York 10022
Attention: Stephen M. Davis, Esq.
Telecopier No.: (212) 832-3353
(b) If to NMR:
NMR of America, Inc.
430 Mountain Avenue
Murray Hill, New Jersey 07974-2732
Attention: Mr. Joseph G. Dasti
with a copy to:
McCarter & English
4 Gateway Center
Newark, New Jersey 07102
Attention: Peter S. Twombly, Esq.
Telecopier No.: (201) 624-7070
<PAGE>
SECTION 11.3 Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person;
(b) "business day" means any day other than a day
on which banks in the State of New York are authorized or obligated
to be closed;
(c) "control" (including the terms "controlled",
"controlled by" and "under common control with") means the
possession, directly or indirectly or as trustee or executor, of
the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock or as
trustee or executor, by contract or credit arrangement or
otherwise;
(d) "knowledge" or "known" shall mean, with respect
to any matter in question, if an executive officer of NMR, MRI or
Sub, as the case may be, has actual knowledge of such matter;
(e) "Laws" shall mean all applicable federal,
state, local or foreign laws, regulations or orders or any other
requirements of any governmental, regulatory or administrative
agency or authority or court or other tribunal (including, but not
limited to, any laws, regulations, or requirements under the
Medicare Anti-Kickback Statute, the Medicaid Patient and Program
Protection Act of 1987, P.L. 103-432, 1994 HR 5252 (known as Stark
II) and the Florida Patient Self Referral Act of 1992.
(f) "person" means an individual, corporation,
partnership, association, trust, unincorporated organization, other
entity or group (as defined in Section 13(d) of the Exchange Act);
(g) "subsidiary" or "subsidiaries" of NMR, MRI or
any other person, means any corporation, partnership, joint venture
or other legal entity of which NMR, MRI or such other person, as
the case may be (either alone or through or together with any other
subsidiary), controls or owns, directly or indirectly, 50% or more
of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other
legal entity or, which by contract or agreement, has the power to
control such corporation or other legal entity, or which otherwise
constitutes a "subsidiary" as defined in Regulation S-X Section 210.1-
02(w). A "significant subsidiary" shall mean any entity
constituting a significant subsidiary under Regulation S-X, Section
210.1-02(v).
<PAGE>
(h) "Tax" or "Taxes" shall mean any and all taxes,
charges, fees, levies, payable to any federal, state, local or
foreign taxing authority or agency, including, without limitation,
i) income, franchise, profits, gross receipts, minimum, alternative
minimum, estimated, ad valorem, value added, sales, use, service,
real or personal property, capital stock, license, payroll,
withholding disability, employment, social security, workers
compensation, unemployment compensation, utility, severance,
excise, stamp, windfall profits, transfer and gains taxes,
ii) customs duties, imposts, charges, levies or other similar
assessments of any kind, and iii) interest, penalties and additions
to tax imposed with respect thereto.
SECTION 11.4 Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 11.5 Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal
or incapable of being enforced, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 11.6 Entire Agreement. This Agreement
(together with the Exhibits and Schedules hereto) and the
Confidentiality Agreement constitute the entire agreement of the
parties and supersede all prior agreements and undertakings, both
written and oral, between the parties, or any of them, with respect
to the subject matter hereof.
SECTION 11.7 Assignment. This Agreement shall not be
assigned by operation of law or otherwise; provided that Sub may
assign this Agreement in its sole discretion to any entity which
is, either directly or indirectly, a wholly-owned subsidiary of
MRI.
SECTION 11.8 Parties in Interest. This Agreement shall
be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
<PAGE>
SECTION 11.9 Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of any party hereto in
the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
SECTION 11.10 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law.
SECTION 11.11 Counterparts. This Agreement may be
executed in one or more counterparts, and by the different parties
hereto in separate counterparts, each of which when executed shall
be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
SECTION 11.12 Determination of Market Value. If any
calculation of market price or value per share of common stock
required to be made by this Agreement becomes incapable of
calculation in accordance with the terms of this Agreement due to
the failure of sales of the common stock to be reported on the
NASDAQ system, then for purposes of making such calculation,
reference shall be made to (i) reported sale prices for comparable
periods if the common stock is quoted on a national exchange, or
(ii) the average of the mean between each days' highest "bid" price
and lowest "asked" price for comparable periods if the common stock
is quoted over-the-counter or (iii) book value per share of common
stock based on most recent quarterly financial report or, if more
recent, annual report or financial statement of the issuer of such
shares.<PAGE>
<PAGE>
IN WITNESS WHEREOF, MRI, Sub and NMR have caused this
Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
MEDICAL RESOURCES, INC.
/s/ Robert J. Adamson
By: -------------------------
Name: Robert J. Adamson
Title: Co-President
/s/ William D. Farrell
By: -------------------------
Name: William D. Farrell
Title: Co-President
MRI SUB, INC.
/s/ Robert J. Adamson
By: -------------------------
Name: Robert J. Adamson
Title: Co-President
/s/ William D. Farrell
By: -------------------------
Name: William D. Farrell
Title: Co-President
NMR OF AMERICA, INC.
/s/ Joseph G. Dasti
By: -------------------------
Name: Joseph G. Dasti
Title: President and
Chief Executive Officer
