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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
EVERGREEN HEALTHCARE, INC.
(NAME OF ISSUER)
COMMON STOCK, $.01 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
300239100
(CUSIP NUMBER)
EVRETT W. BENTON, ESQ.
GRANCARE, INC.
ONE RAVINA DRIVE, SUITE 1500
ATLANTA, GEORGIA 30346
(404) 393-0199
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
MAY 2, 1995
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement /X/. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 300239100 13D Page 2 of 6 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GRANCARE, INC.
I.R.S. I.D. #: 95-4299210
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC, BK AND/OR OO (SEE ITEM 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
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7 SOLE VOTING POWER
APPROXIMATELY 2,483,726 SHARES (SUBJECT TO ADJUSTMENT
BASED UPON CHANGES IN THE OUTSTANDING SHARES OF THE
ISSUER)
NUMBER
OF ---------------------------------------------------------------------
8 SHARED VOTING POWER
SHARES - 0 -
BENEFICIALLY ---------------------------------------------------------------------
OWNED BY
9 SOLE DISPOSITIVE POWER
REPORTING APPROXIMATELY 2,483,726 SHARES (SUBJECT TO ADJUSTMENT
PERSON BASED UPON CHANGES IN THE OUTSTANDING SHARES OF THE
WITH ISSUER)
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10 SHARED DISPOSITIVE POWER
- 0 -
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
APPROXIMATELY 2,483,726 SHARES (SUBJECT TO ADJUSTMENT BASED UPON CHANGES IN
THE OUTSTANDING SHARES OF THE ISSUER)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 / /
EXCLUDES CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.59%
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14 TYPE OF REPORTING PERSON*
CO
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
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ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the Common Stock, par value $.01 (the
"Evergreen Common Stock"), of Evergreen Healthcare, Inc., a Georgia corporation
("Evergreen"). The principal executive offices of Evergreen are located at:
Evergreen Healthcare, Inc.
11350 North Meridian Street
Suite 200
Carmel, Indiana 46032
ITEM 2. IDENTITY AND BACKGROUND.
(a) This Schedule 13D is being filed by GranCare, Inc., a California
corporation ("GranCare"). The name, business address, present principal
occupation or employment and citizenship of each executive officer and director
of GranCare are set forth in Annex I hereto which is incorporated herein by this
reference.
(b) The principal business of GranCare is providing a comprehensive array
of skilled nursing, specialty medical and rehabilitative services in a long-term
care environment. GranCare is also in the business of providing pharmacy
services through its institutional pharmacies to patients in certain of its
long-term health care facilities, to patients in facilities operated by others
and to patients receiving home health care.
(c) The address of GranCare's principal business and principal office is
One Ravina Drive, Suite 1500, Atlanta, Georgia 30346.
(d) During the past five years, neither GranCare nor, to GranCare's best
knowledge, any person named in Annex I to this Schedule 13D, has been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither GranCare nor, to GranCare's best
knowledge, any person named in Annex I to this Schedule 13D, was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which such person was or is subject to a judgment, decree or
final order enjoining future violations of or prohibiting or mandating activity
subject to federal or state securities laws or finding any violation with
respect to such laws.
(f) Not applicable.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the terms and conditions of that certain Agreement and Plan of
Merger dated as of May 2, 1995 by and among GranCare, GW Acquisition, Inc., a
California corporation and wholly-owned subsidiary of Grancare ("Merger Sub"),
and Evergreen (the "Merger Agreement"), each issued and outstanding share of
Evergreen Common Stock, other than those shares of Evergreen Common Stock that
are owned by Evergreen as treasury stock (the "Treasury Shares"), shall
automatically be converted into the right to receive .775 shares of the common
stock, no par value, of GranCare (the "GranCare Common Stock"), and each then
outstanding option to purchase Evergreen Common Stock shall be assumed by
GranCare and converted into the right to receive an option to purchase GranCare
Common Stock. The terms and conditions of the Merger Agreement are more fully
described in Item 4 herein. A copy of the Merger Agreement is attached hereto as
Exhibit A and incorporated herein by this reference.
In addition, pursuant to that certain Cross Option Agreement dated as of
May 2, 1995 by and among GranCare, Merger Sub and Evergreen (the "Cross Option
Agreement"), GranCare has an irrevocable contingent option to purchase newly
issued shares of Evergreen Common Stock for cash upon the occurrence of certain
triggering events as set forth in Section 1.2 therein. The terms and conditions
of the Cross Option Agreement are more fully described in Item 4 herein. A copy
of the Cross Option Agreement is attached hereto as Exhibit B and incorporated
herein by this reference. The source of funds to be used in GranCare's purchase
of these shares of Evergreen Common Stock will consist of working capital and/or
borrowings under GranCare's credit facility with First Union National Bank of
North Carolina. In the alternative, GranCare
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may utilize a portion of the termination fees payable to GranCare pursuant to
Section 7.2 of the Merger Agreement to purchase these shares of Evergreen Common
Stock.
ITEM 4. PURPOSE OF TRANSACTION.
On May 2, 1995, GranCare, Merger Sub and Evergreen entered into the Merger
Agreement, pursuant to which GranCare will, subject to the satisfaction of
certain conditions, acquire Evergreen by means of a merger of Merger Sub with
and into Evergreen (hereinafter sometimes referred to as the "Surviving
Corporation") in which (a) each issued and outstanding share of Evergreen Common
Stock, other than the Treasury Shares, will automatically be converted into the
right to receive .775 of a share of the GranCare Common Stock; (b) all shares of
Evergreen Common Stock to be converted into GranCare Common Stock as a result of
the Merger, will be cancelled and retired and cease to exist ; (c) the issued
and outstanding shares of common stock, no par value, of Merger Sub will be
converted into one hundred (100) shares of fully paid and nonassessable shares
of common stock, no par value, of the Surviving Corporation; (d) all shares of
Evergreen Common Stock which are owned as Treasury Shares will be cancelled and
retired and cease to exist, without any conversion thereof or payment with
respect thereto; and (e) each outstanding option to purchase Evergreen Common
Stock will be assumed by GranCare as provided in Section 5.7 of the Merger
Agreement.
Upon the effective time of the Merger, the Articles of Incorporation and
Bylaws of the Surviving Corporation shall be replaced in their entirety with the
Articles of Incorporation and Bylaws in substantially the form attached hereto
as Exhibits C and D, respectively. In addition, the persons who are directors of
Merger Sub immediately prior to the effective time of the Merger shall, after
the effective time, serve as the directors of the Surviving Corporation, and the
persons who are officers of Merger Sub immediately prior to the effective time
of the Merger shall, after the effective time, serve as the officers of the
Surviving Corporation.
The Board of Directors of each of GranCare and Evergreen have determined
that the Merger is fair to and in the best interests of its respective
shareholders, and have approved the Merger in accordance with the terms and
conditions of the Merger Agreement. However, the Merger Agreement and the Merger
are subject to the approval of the GranCare shareholders at a special
shareholders' meeting to be held as soon as practicable, and to the approval of
the Evergreen shareholders at a special shareholders' meeting to be held as soon
as practicable.
The foregoing summary of the Merger is qualified in its entirety by
reference to the copy of the Merger Agreement attached hereto as Exhibit A and
incorporated herein by this reference.
Concurrently with the execution of the Merger Agreement, GranCare, Merger
Sub and Evergreen have entered into the Cross Option Agreement, pursuant to
which, among other things, Evergreen granted to GranCare an irrevocable
contingent option (the "Evergreen Stock Option") to purchase newly issued shares
of Evergreen Common Stock in an amount equal to 19.9% of the outstanding shares
of Evergreen Common Stock immediately prior to the exercise of the Evergreen
Stock Option (the "Evergreen Stock Option Shares") at a purchase price of
$13 1/8 per Evergreen Option Share (the "Evergreen Stock Purchase Price").
GranCare may exercise the Evergreen Stock Option in whole, but not in part, at
any time or from time to time after the Merger Agreement becomes terminable or
is terminated by GranCare or Evergreen under circumstances which could entitle
GranCare to termination fees under Section 7.2(b) of the Merger Agreement
(regardless of whether the Merger Agreement is actually terminated or whether
there occurs a closing of any Third Party Transaction, as such term is defined
therein). Any such event by which the Merger Agreement becomes terminable or is
terminated is hereinafter referred to as a "GranCare Triggering Event." The
foregoing summary of the Cross Option Agreement is qualified in its entirety by
reference to the copy of the Cross Option Agreement attached hereto as Exhibit B
and incorporated herein by this reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Upon the occurrence of a GranCare Triggering Event as more fully
described in Item 4 above, GranCare will have the right to acquire direct
beneficial ownership of approximately 2,483,726 shares of Evergreen Common
Stock, representing approximately 16.59% of the outstanding shares of Evergreen
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Common Stock (based on the number of shares of Evergreen Common Stock
outstanding as of March 31, 1995, as represented by Evergreen in the Merger
Agreement). To the best knowledge of GranCare, none of its directors or
executive officers named in Annex I to this Schedule 13D beneficially own any
shares of Evergreen Common Stock.
(b) In the event that GranCare exercises the Evergreen Stock Option,
GranCare will have the sole power to vote or to direct the vote, and the sole
power to dispose of, or to direct the disposition of, the Evergreen Stock Option
Shares.
(c) Other than this proposed Merger and the Evergreen Stock Option, neither
GranCare nor, to the best of its knowledge, any of its directors or executive
officers named in Annex I to this Schedule 13D has engaged in any transactions
in Evergreen Common Stock in the sixty (60) days preceding the date of this
filing.
(d) No person other than GranCare or Merger Sub has the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the sale
of, the shares of Evergreen Common Stock beneficially owned (whether directly or
indirectly) by GranCare.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SECURITIES OF THE ISSUER.
Except as described in this Schedule 13D, neither GranCare nor, to the best
of its knowledge, any of its directors or executive officers named in Annex I to
this Schedule 13D has any contracts, arrangements, understandings or
relationships (legal or otherwise) with any person with respect to any
securities of Evergreen.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Exhibit A -- Agreement and Plan of Merger dated as of May 2, 1995 by
and among GranCare, Merger Sub and Evergreen (Exhibits omitted).
(b) Exhibit B -- Cross Option Agreement dated as of May 2, 1995 by and
among GranCare, Merger Sub and Evergreen.
(c) Exhibit C -- Articles of Incorporation of Merger Sub.
(d) Exhibit D -- Bylaws of Merger Sub.
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ANNEX I
EXECUTIVE OFFICERS OF GRANCARE:
The names and principal occupations or employments of the executive
officers of GranCare are set forth below. The business address of each executive
officer is One Ravina Drive, Suite 1500, Atlanta, Georgia 30346. Unless
otherwise indicated the present principal occupation of each executive officer
is conducted with GranCare. All the executive officers are citizens of the
United States.
<TABLE>
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NAME OF EXECUTIVE
OFFICER PRESENT PRINCIPAL OCCUPATION
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Gene E. Burleson Chairman of the Board, President and Chief
Executive Officer
Evrett W. Benton Executive Vice President, General Counsel and
Secretary
M. Scott Athans Executive Vice President and Chief Operating
Officer
Jerry A. Schneider Executive Vice President and Chief Financial
Officer
Kay L. Brown Senior Vice President and Director of Corporate
Communications and Investor Relations
Dennis J. Hansen Senior Vice President, Director of Reimbursement
and Management Information Systems
Erich J. Wolters Senior Vice President of Operations
David R. Borchers Vice President, Director of Facility Management
Victoria A. Eberle Vice President, Director of Taxes
LaVrene L. Norton Vice President, Director of Executive Development
Patricia D. Pawelski Vice President, Operations Support
Michael H. Rosen Vice President, Controller
Mark H. Rubenstein Vice President, Director of Human Resources
Nathan M. Silver Vice President, Director of Operations of
CompuPharm
Lawrence W. Smith Vice President, Director of Operations
Richard J. Spinello Vice President, Director of Risk Management
</TABLE>
DIRECTORS OF GRANCARE:
The names, business addresses and principal occupations or employments of
the directors of GranCare are set forth below. All the directors are citizens of
the United States.
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NAME/ADDRESS OF DIRECTOR PRESENT PRINCIPAL OCCUPATION
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Gene E. Burleson President, Chief Executive Officer and
One Ravina Drive Chairman of the Board of GranCare
Suite 1500
Atlanta, GA 30346
Charles M. Blalack Chairman and Chief Executive Officer of
Blalack & Company Blalack & Company
130 South San Rafael
Pasadena, CA 91105
Joel S. Kanter President of Windy City, Inc.
Windy City, Inc.
8000 Towers Crescent Drive
Suite 1070
Vienna, VA 22182
</TABLE>
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NAME/ADDRESS OF DIRECTOR PRESENT PRINCIPAL OCCUPATION
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Antoinette Hubenette, M.D. Medical doctor and partner with the
Medical Group of Beverly Hills Medical Group of Beverly Hills
250 North Robertson Boulevard
Suite 603
Beverly Hills, CA 90211
Edward V. Regan Policy Advisor with The Jerome Levy
The Jerome Levy Economics Economics Institute
Institute
31 West 52nd Street, 17th Floor
New York, NY 10019
Gary U. Rolle Executive Vice President and Chief
Transamerica Investment Services Investment Officer, Transamerica
1150 South Olive Street Investment Services
Los Angeles, CA 90015
</TABLE>
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 11, 1995
/s/ Evrett W. Benton
---------------------------------
(SIGNATURE)
Name: Evrett W. Benton
Title: Executive Vice President,
General Counsel
and Secretary
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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
AMONG
GREEN,
GW ACQUISITION CORP.
AND
WHITECAP
DATED AS OF MAY 2, 1995
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TABLE OF CONTENTS
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PAGE
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ARTICLE I -- THE MERGER............................................................... A-1
1.1 The Merger.................................................................... A-1
1.2 Closing....................................................................... A-1
1.3 Effective Time................................................................ A-1
1.4 Effect of Merger.............................................................. A-1
1.5 Certificate of Incorporation and Bylaws....................................... A-2
1.6 Directors and Officers........................................................ A-2
ARTICLE II -- CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES...................... A-2
2.1 Share Consideration; Conversion or Cancellation of Shares in the Merger....... A-2
2.2 Payment for Shares in the Merger.............................................. A-3
2.3 Exchange Agent................................................................ A-4
2.4 Fractional Shares............................................................. A-4
2.5 Transfer of Shares After the Effective Time................................... A-5
2.6 Further Assurances............................................................ A-5
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF GREEN AND
MERGER SUB......................................................... A-5
3.1 Corporate Organization........................................................ A-5
3.2 Capitalization................................................................ A-5
3.3 Options or Other Rights....................................................... A-6
3.4 Authority Relative to this Agreement.......................................... A-6
3.5 Green Common Stock............................................................ A-6
3.6 No Violation.................................................................. A-6
3.7 Compliance with Laws.......................................................... A-7
3.8 Litigation.................................................................... A-7
3.9 Financial Statements and Reports.............................................. A-8
3.10 Absence of Certain Changes or Events.......................................... A-8
3.11 Employee Benefit Plans and Employment Matters................................. A-9
3.12 Labor Matters................................................................. A-9
3.13 Insurance..................................................................... A-10
3.14 Environmental Matters......................................................... A-10
3.15 Tax Matters................................................................... A-10
3.16 Intellectual Property......................................................... A-10
3.17 Related Party Transactions.................................................... A-11
3.18 No Undisclosed Material Liabilities........................................... A-11
3.19 No Default.................................................................... A-11
3.20 Title to Properties; Encumbrances............................................. A-11
3.21 Pooling of Interests.......................................................... A-11
3.22 Representations Complete...................................................... A-12
3.23 Brokers....................................................................... A-12
3.24 Opinion of Financial Advisors................................................. A-12
3.25 Whitecap Stock Ownership...................................................... A-12
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF WHITECAP.............................. A-12
4.1 Corporate Organization........................................................ A-12
4.2 Capital Stock................................................................. A-12
4.3 Options or Other Rights....................................................... A-13
</TABLE>
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<TABLE>
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4.4 Authority Relative to this Agreement.......................................... A-13
4.5 No Violation.................................................................. A-13
4.6 Compliance with Laws.......................................................... A-14
4.7 Litigation.................................................................... A-14
4.8 Financial Statements and Reports.............................................. A-15
4.9 Absence of Certain Changes or Events.......................................... A-15
4.10 Employee Benefit Plans and Employment Matters................................. A-15
4.11 Labor Matters................................................................. A-16
4.12 Insurance..................................................................... A-17
4.13 Environmental Matters......................................................... A-17
4.14 Tax Matters................................................................... A-17
4.15 Intellectual Property......................................................... A-17
4.16 Related Party Transactions.................................................... A-18
4.17 No Undisclosed Material Liabilities........................................... A-18
4.18 No Default.................................................................... A-18
4.19 Title to Properties; Encumbrances............................................. A-18
4.20 Pooling of Interests.......................................................... A-18
4.21 Representations Complete...................................................... A-19
4.22 Brokers....................................................................... A-19
4.23 Opinion of Financial Advisors................................................. A-19
4.24 Contracts..................................................................... A-19
ARTICLE V -- COVENANTS AND AGREEMENTS................................................. A-19
5.1 Joint Proxy Statement/Prospectus; Registration Statement; Shareholders'
Meeting....................................................................... A-19
5.2 Conduct of the Business of Whitecap Prior to the Effective Time............... A-21
5.3 Conduct of the Business of Green Prior to the Effective Time.................. A-22
5.4 Access to Properties and Records.............................................. A-23
5.5 No Solicitation of Transactions............................................... A-23
5.6 Employee Benefit Plans........................................................ A-25
5.7 Treatment of Options.......................................................... A-25
5.8 Settlement of Options and Rights.............................................. A-25
5.9 Existing Indemnification Agreements........................................... A-26
5.10 Confidentiality............................................................... A-26
5.11 Reasonable Best Efforts....................................................... A-26
5.12 Certification of Stockholder Vote............................................. A-27
5.13 Affiliate Letters............................................................. A-27
5.14 Listing Application........................................................... A-27
5.15 Supplemental Disclosure Schedules............................................. A-27
5.16 No Action..................................................................... A-27
5.17 Conduct of Business of Merger Sub............................................. A-27
5.18 Corporate Governance.......................................................... A-27
5.19 Restructuring of Merger....................................................... A-28
5.20 Cross Option Agreement........................................................ A-28
ARTICLE VI -- CONDITIONS PRECEDENT.................................................... A-28
6.1 Conditions to Each Party's Obligation to Effect the Merger.................... A-28
6.2 Conditions to the Obligation of Whitecap to Effect the Merger................. A-29
6.3 Conditions to the Obligations of Green and Merger Sub to Effect the Merger.... A-30
</TABLE>
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ARTICLE VII -- TERMINATION............................................................ A-31
7.1 Termination................................................................... A-31
7.2 Effects of Termination........................................................ A-32
ARTICLE VIII -- MISCELLANEOUS......................................................... A-33
8.1 Amendment..................................................................... A-33
8.2 Waiver........................................................................ A-33
8.3 Survival...................................................................... A-34
8.4 Expenses and Fees............................................................. A-34
8.5 Notices....................................................................... A-34
8.6 Headings...................................................................... A-34
8.7 Public Announcements.......................................................... A-35
8.8 Entire Agreement.............................................................. A-35
8.9 Assignment.................................................................... A-35
8.10 Counterparts.................................................................. A-35
8.11 Invalidity; Severability...................................................... A-35
8.12 Governing Law................................................................. A-35
</TABLE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Articles of Incorporation and Bylaws of Surviving Corporation
Exhibit B Form of Affiliate Letter
Exhibit C Confidentiality Agreement
Exhibit D Form of Cross Option Agreement
Exhibit E Form of Shareholder Voting Agreement
Exhibit F Form of Shareholder Voting Agreement
</TABLE>
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of May 2, 1995 among
GranCare, Inc., a California corporation ("Green"), GW Acquisition Corp., a
California corporation and a wholly-owned subsidiary of Green ("Merger Sub"),
and Evergreen Healthcare, Inc., a Georgia corporation ("Whitecap").
WHEREAS, the Boards of Directors of Green, Merger Sub and Whitecap deem
advisable, consistent with their respective long-term business strategies and in
the best interests of their respective shareholders the merger of Merger Sub
with and into Whitecap (the "Merger") upon the terms and conditions set forth
herein and in accordance with the California Corporation Code (the "CCC") and
the Georgia Business Corporation Code (the "GBCC") (Whitecap, following the
effectiveness of the Merger, being hereinafter sometimes referred to as the
"Surviving Corporation");
WHEREAS, the Boards of Directors of Green, Merger Sub and Whitecap have
approved the Merger pursuant to this Agreement, upon the terms and subject to
the conditions set forth herein;
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, it is intended that the Merger shall be accounted for as a pooling
of interests pursuant to opinion No. 16 of the Accounting Principles Board.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, agreements and conditions contained herein, and in order to set forth
the terms and conditions of the Merger and the method of carrying the same into
effect, the parties hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and conditions hereinafter set forth and in
accordance with the CCC and GBCC, at the Effective Time (as defined in Section
1.3), Merger Sub shall be merged with and into Whitecap and thereupon the
separate existence of Merger Sub shall cease, and Whitecap as the Surviving
Corporation, shall continue to exist under and be governed by the GBCC.
1.2 Closing. Subject to the terms and conditions of this Agreement, the
closing of the Merger (the "Closing") shall take place at the offices of Green
at One Ravinia Drive, Suite 1500, Atlanta, Georgia 30346 as promptly as
practicable after satisfaction or waiver of the conditions set forth in Article
VI, or at such other location, time or date as may be agreed to in writing by
the parties hereto. The date on which the Closing occurs is hereinafter referred
to as the "Closing Date."
1.3 Effective Time. If all the conditions to the Merger set forth in
Article VI shall have been satisfied or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article VII, the parties
hereto shall cause a Certificate of Merger meeting the requirements of the GBCC
and CCC ("Certificate of Merger") to be properly executed and filed in
accordance with such requirements on the Closing Date. The Merger shall become
effective at the time of filing of the Certificate of Merger with the Secretary
of State of the State of California in accordance with the CCC or at such other
time which the parties hereto shall have agreed upon and designated in such
filing as the effective time of the Merger (the "Effective Time").
1.4 Effect of Merger. After the Effective Time, pursuant to the CCC and
GBCC, the separate existence of Merger Sub will cease and the Surviving
Corporation shall succeed, without other transfer, to all the rights and
property of Merger Sub and shall be subject to all the debts and liabilities of
Merger Sub in the same manner as if the Surviving Corporation had itself
incurred them. All outstanding capital stock of Whitecap shall be automatically
converted into the right to receive shares of stock of Green (or cash for
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fractional shares) and all the shares of Merger Sub shall be converted into
shares of stock of Whitecap, as set forth in Article II hereof.
1.5 Certificate of Incorporation and Bylaws. At the Effective Time, the
Articles of Incorporation and the Bylaws attached as Exhibit A shall be the
Articles of Incorporation and Bylaws of the Surviving Corporation.
1.6 Directors and Officers. The persons who are directors of Merger Sub
immediately prior to the Effective Time shall, after the Effective Time, serve
as the directors of the Surviving Corporation, to serve until their successors
have been duly elected and qualified in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation. The persons who are
officers of Merger Sub immediately prior to the Effective Time shall, after the
Effective Time, serve as the officers of the Surviving Corporation at the
pleasure of the Board of Directors of the Surviving Corporation. The directors
of Green as of the Effective Time shall be as specified in Section 5.18.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
2.1 Share Consideration; Conversion or Cancellation of Shares in the
Merger. Subject to the provisions of this Article II, at the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof:
(a) Each issued and outstanding share of the common stock, $.01 par
value, of Whitecap (the "Whitecap Common Stock"), other than shares of
Whitecap Common Stock that are owned by Whitecap as treasury stock (the
"Treasury Shares"), shall be automatically converted into .775 shares (the
"Exchange Ratio") of the common stock, no par value, of Green (the "Green
Common Stock"). If prior to the Effective Time, Green or Whitecap should
split or combine their respective Common Stock, or pay a stock dividend or
other stock distribution in their respective Common Stock, or otherwise
change their respective Common Stock into any other securities, or make any
other dividend or distribution on their respective Common Stock, then the
Exchange Ratio will be appropriately adjusted to reflect such split,
combination, dividend or other distribution or change. The Exchange Ratio
shall, in each case, be rounded to the nearest ten-thousandth of a share.
(b) As a result of the Merger all of the shares of the Whitecap Common
Stock to be converted into Green Common Stock pursuant to Section 2.1(a)
(the "Whitecap Shares") shall cease to be outstanding, shall be cancelled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares shall thereafter cease to have any rights with
respect to such shares, except the right to receive for each of the shares,
upon the surrender of such certificate in accordance with Section 2.2(b),
the amount of the Green Common Stock specified above (the "Share
Consideration") and cash in lieu of fractional Green Common Stock as
contemplated by Section 2.4.
(c) The issued and outstanding shares of the common stock, no par
value, of Merger Sub (the "Merger Sub Common Stock") shall be converted
into one hundred (100) shares of fully paid and nonassessable shares of
common stock, no par value, of the Surviving Corporation ("Surviving
Corporation Common Stock").
(d) All shares of Whitecap Common Stock which are owned as Treasury
Shares shall be cancelled and retired and cease to exist, without any
conversion thereof or payment with respect thereto.
(e) Each outstanding option or warrant to purchase Whitecap Common
Stock (each a, "Whitecap Stock Option") shall be assumed by Green as
provided in Section 5.7.
As used in this Agreement, the term "Subsidiary" shall mean with respect to
any party any corporation of which at least a majority of the securities having
by their terms ordinary voting power to elect a majority of the Board of
Directors is directly or indirectly owned or controlled by such party or by any
one or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries; the term "Subsidiary" shall also include any
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unincorporated organization, including partnerships and joint ventures, of which
such party or any other Subsidiary of such party is a general partner (excluding
partnerships, the general partnership interests of which held by such party or
any Subsidiary of such party do not have a majority of the voting interests in
such partnership) or at least a majority of the voting interests in such
organization are directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries.
2.2 Payment for Shares in the Merger.
(a) At the Effective Time, Green shall make available to an exchange agent
selected by Green and reasonably acceptable to Whitecap as exchange agent for
the Whitecap Shares in accordance with this Article II (the "Exchange Agent"),
for the benefit of those persons who immediately prior to the Effective Time
were the holders of Whitecap Shares, a sufficient number of certificates
representing shares of Green Common Stock required to effect the delivery of the
aggregate Share Consideration required to be issued pursuant to Section 2.1 (the
certificates representing Green Common Stock comprising such aggregate Share
Consideration being hereinafter referred to as the "Exchange Fund"). The
Exchange Agent shall, pursuant to irrevocable instructions from Green, deliver
the shares of Green Common Stock contemplated to be issued pursuant to Section
2.1 and effect the sales provided for in Section 2.4 out of the Exchange Fund.
The Exchange Fund shall not be used for any other purpose.
(b) Promptly after the Effective Time, Green shall cause the Exchange Agent
to send a notice and transmittal form to each holder of record of the Whitecap
Shares immediately prior to the Effective Time advising such holder of the
effectiveness of the Merger and the procedure for surrendering to the Exchange
Agent (who may appoint forwarding agents with the approval of Green) the
certificate or certificates representing Whitecap Shares to be exchanged
pursuant to the Merger (the "Certificates"). Upon the surrender for exchange of
Certificates, together with such letter of transmittal duly completed and
properly executed in accordance with instructions thereto and such other
documents as may be reasonably required pursuant to such instructions, the
holder shall be paid promptly, without interest thereon and subject to any
required withholding of taxes, the Share Consideration to which such holder is
entitled hereunder, and such Certificates shall forthwith be cancelled. Until so
surrendered and exchanged, the Certificates shall represent solely the right to
receive the Share Consideration pursuant to Section 2.1 and cash in lieu of
fractional shares as contemplated by Section 2.4, subject to any required
withholding of taxes. If any payment for the Whitecap Shares is to be made to a
person other than the person in whose name the Certificates for such shares
surrendered are registered, it shall be a condition of the exchange that the
person requesting such exchange shall pay to the Exchange Agent any transfer or
other taxes required by reason of the delivery of such payment to a person other
than the registered owner of the Certificates surrendered or shall establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. Unless prohibited by law, former shareholders of record of Whitecap
shall be entitled to vote, after the Effective Time, at any meeting of Green
shareholders, the number of whole shares of Green Common Stock into which their
respective Whitecap Shares are converted, regardless of whether such holders
have exchanged their Certificates in accordance with this Section 2.2.
(c) No dividends or other distributions with respect to Green Common Stock
with a record date after the Effective Time shall be paid to the holders of any
unsurrendered Certificates with respect to the shares of Green Common Stock
represented thereby and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 2.4 until the surrender of such
Certificates in accordance with this Section 2.2. Subject to the effect of
applicable laws, following surrender of any such Certificates, there shall be
paid by Green or the Exchange Agent to the holder of the Certificates, in
addition to the Share Consideration to be issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of any cash payable in
lieu of a fractional share of Green Common Stock to which such holder is
entitled pursuant to Section 2.4 and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such Share Consideration, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and with a payment date subsequent to
such surrender payable with respect to such Share Consideration.
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(d) In the event any Certificates shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by Green, the
posting by such person of a bond in such amount, form and with such surety as
Green may reasonably direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the number of shares of
the Green Common Stock and cash in lieu of fractional shares deliverable (and
unpaid dividends and distributions) in respect thereof pursuant to this
Agreement.
(e) Green, as the sole shareholder of Merger Sub, shall, upon surrender to
the Surviving Corporation of certificates representing the Merger Sub Common
Stock, receive a certificate representing the number of shares of the Surviving
Corporation Common Stock into which such Merger Sub Common Stock shall have been
converted pursuant to Section 2.1.
(f) Certificates surrendered for exchange by any person constituting a Rule
145 Affiliate of Whitecap (as defined in Section 5.13) shall not be exchanged
for certificates representing Green Common Stock until Green has received a
written agreement from such person as provided in Section 5.13.
2.3 Exchange Agent. Green shall cause the Exchange Agent to agree, among
other things, that (i) the Exchange Agent shall maintain the Exchange Fund as a
separate fund to be held for the benefit of the holders of the Whitecap Shares,
which shall be promptly applied by the Exchange Agent to making the payments
provided for in Section 2.2, (ii) any portion of the Exchange Fund that has not
been paid to holders of the Whitecap Shares pursuant to Section 2.2 prior to
that date which is one year from the Effective Time shall be paid to Green, and
any holders of Whitecap Shares who shall not have theretofore complied with
Section 2.2 shall thereafter look only to Green for payment of the number of
shares of Green Common Stock and payments due pursuant to Section 2.2 hereof to
which they are entitled under this Agreement, (iii) the Exchange Fund shall not
be used for any purpose that is not provided for herein; and (iv) all expenses
of the Exchange Agent shall be paid directly by Green. Promptly following the
date which is one year from the Effective Time, the Exchange Agent shall return
to Green all cash, securities and any other instruments in its possession
relating to the transactions described in this Agreement, and the Exchange
Agent's duties shall terminate. Thereafter, each holder of Certificates may
surrender such Certificates to Green and (subject to applicable abandoned
property, escheat and similar laws) receive in exchange therefor the Share
Consideration, cash in lieu of fractional shares and other payments payable with
respect thereto pursuant to Sections 2.1, 2.2 and 2.4 hereof, without interest,
but shall have no greater rights against Green than may be accorded to general
creditors of Green under the CCC. The Exchange Agent shall not be entitled to
vote or exercise any rights of ownership with respect to the Green Common Stock
held by it from time to time hereunder.
2.4 Fractional Shares.
(a) No fractional shares of Green Common Stock shall be issued in the
Merger. In lieu of any such fractional securities, each holder of Whitecap
Shares who would otherwise have been entitled to a fractional share of Green
Common Stock upon surrender of Certificates for exchange pursuant to this
Article II will be paid an amount in cash (without interest) equal to such
holder's proportionate interest in the net proceeds from the sale or sales in
the open market by the Exchange Agent, on behalf of all such holders, of the
aggregate fractional shares of the Green Common Stock issued pursuant to this
Article II. As soon as practicable following the Effective Time, the Exchange
Agent shall determine the excess of (i) the number of full shares of the Green
Common Stock delivered to the Exchange Agent by Green over (ii) the aggregate
number of full shares of the Green Common Stock to be distributed to holders of
Whitecap Shares (such excess being herein called the "Excess Shares"), and the
Exchange Agent, as agent for the former holders of Whitecap Shares, shall sell
the Excess Shares at the prevailing prices on the New York Stock Exchange
("NYSE"). The sale of the Excess Shares by the Exchange Agent shall be executed
on the NYSE through one or more member firms of the NYSE and shall be executed
in round lots to the extent practicable. Green shall pay all commissions,
transfer taxes and other out-of-pocket transaction costs, including the expenses
and compensation of the Exchange Agent, incurred in connection with such sale of
Excess Shares. Until the net proceeds of such sale have been distributed to the
former shareholders of Whitecap, the Exchange Agent will hold such proceeds in
trust for such former shareholders (the "Fractional Securities Fund"). As soon
as
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practicable after the determination of the amount of cash to be paid to former
shareholders of Whitecap in lieu of any fractional interests, the Exchange Agent
shall make available in accordance with this Agreement such amounts to such
former shareholders.
(b) In lieu of establishing the Fractional Securities Fund pursuant to
Section 2.4(a), the Exchange Agent may, at the direction of Green, pay any cash
amounts due the former shareholders of Whitecap directly from cash made
available to the Exchange Agent by Green for such purpose.
2.5 Transfer of Shares After the Effective Time. No transfers of Whitecap
Shares shall be made on the stock transfer books of Whitecap after the close of
business on the day prior to the date of the Effective Time.
2.6 Further Assurances. If at any time after the Effective Time the
Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary, desirable or
proper (a) to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, the title to any property or right of Whitecap or Merger Sub
acquired or to be acquired by reason of, or as a result of, the Merger, or (b)
otherwise to carry out the purposes of this Agreement, Whitecap and Merger Sub
agree that the Surviving Corporation and its proper officers and directors shall
and will execute and deliver all such deeds, assignments and assurances in law
and do all acts necessary, desirable or proper to vest, perfect or confirm title
to such property or right in the Surviving Corporation and otherwise to carry
out the purposes of this Agreement, and that the proper officers and directors
of the Surviving Corporation are fully authorized in the name of Whitecap and
Merger Sub or otherwise to take any and all such action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GREEN AND MERGER SUB
Green and Merger Sub, jointly and severally, represent and warrant to
Whitecap that, except as set forth in the Disclosure Schedule delivered herewith
(the "Green Disclosure Schedule"):
3.1 Corporate Organization. Each of Green and its Subsidiaries (the "Green
Subsidiaries") is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, with all
requisite corporate power and authority to own, operate and lease its properties
and to carry on its business as it is now being conducted, and is qualified or
licensed to do business and is in good standing in each jurisdiction in which
the failure to be so qualified or licensed, individually or in the aggregate,
would have a material adverse effect on the financial condition, results of
operations, properties or business ("Material Adverse Effect") of Green and the
Green Subsidiaries taken as a whole (a "Material Adverse Effect on Green"). True
and complete copies of the Certificate of Incorporation and the Bylaws of Green
have been delivered to Whitecap. Such Certificate and Bylaws are in full force
and effect. The Green Disclosure Schedule contains a complete and accurate list
of all of the Green Subsidiaries. Neither Green nor any Green Subsidiary is in
violation of any provision of its Certificate of Incorporation or Bylaws which
could have a Material Adverse Effect on Green. Merger Sub has not engaged in any
business nor has it incurred any liabilities or obligations since it was
incorporated other than relating to this Agreement and the transactions
contemplated hereby. For the purposes of this Agreement the term "Significant
Subsidiaries" shall mean a Significant Subsidiary of Green or Whitecap, as
applicable, within the meaning of Rule 1-02 of Regulation S-X of the Commission.
3.2 Capitalization. The authorized capital stock of Green consists of
50,000,000 shares of Green Common Stock, and 2,000,000 shares of Preferred
Stock, no par value ("Green Preferred Stock"). As of the date of this Agreement,
13,818,057 shares of Green Common Stock are issued and outstanding, all of which
were validly issued, fully paid and nonassessable, and 200,000 shares of such
Common Stock are held in the treasury of Green. As of the date hereof, no shares
of Green Preferred Stock are issued and outstanding. As of the date of this
Agreement, 1,735,776 shares of Green Common Stock are reserved for future
issuance pursuant to employee stock options granted pursuant to Green's Amended
and Restated Stock Incentive Plan ("Stock Incentive Plan"), and 203,000 shares
are reserved for future issuance pursuant to stock options granted pursuant to
Green's 1994 Stock Option Plan ("1994 Plan") (any stock option issued under such
plans being a "stock option"). In addition to the foregoing, 2,210,351 shares of
Green Common Stock are reserved
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for issuance upon conversion of Green's $60,000,000 principal amount of
aggregate outstanding 6 1/2% Convertible Subordinated Debentures Due 2003, and
656,353 shares of Green Common Stock are reserved for issuance upon exercise of
outstanding warrants to purchase Green Common Stock. Green has heretofore
delivered to Whitecap, correct and complete copies of the Stock Incentive Plan,
the 1994 Plan, option agreements covering all outstanding stock options issued
thereunder and all outstanding warrants to purchase Green Common Stock, in each
case as currently in effect. Each option agreement sets forth for each stock
option holder (i) such holder's name, (ii) the date of grant of stock options to
such holder, (iii) the number of shares of Green Common Stock into which each
such grant is exercisable, (iv) the exercise price per share of Green Common
Stock with respect to each such grant, and (v) the periods during which such
stock options or portions thereof are exercisable by such holder. Except as set
forth in this Section 3.2 or in Schedule 3.2 of the Green Disclosure Schedule,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
Green or any Green Subsidiary or obligating Green or any Green Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in,
Green or any Green Subsidiary. All shares of Green Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. Except as set forth in this
Section 3.2, there are no outstanding contractual obligations of Green or any
Green Subsidiary to repurchase, redeem or otherwise acquire any shares of Green
Common Stock or any capital stock of any Green Subsidiary, or make any material
investment (in the form of a loan, capital contribution or otherwise) in, any
Green Subsidiary or any other person. Each outstanding share of capital stock of
each Green Subsidiary is duly authorized, validly issued, fully paid and
nonassessable and, except as set forth in Schedule 3.2 of the Green Disclosure
Schedule, each such share owned by Green or another Green Subsidiary is free and
clear of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on Green's or such other Green
Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever.
3.3 Options or Other Rights. Except as disclosed in Section 3.2, there is
no outstanding right, subscription, warrant, call, unsatisfied preemptive right,
option or other agreement or arrangement of any kind to purchase or otherwise to
receive from Green or any Green Subsidiary any of the outstanding authorized but
unissued, unauthorized or treasury shares of the capital stock or any other
security of Green or any Green Subsidiary, and there is no outstanding security
of any kind convertible into or exchangeable for such capital stock.
3.4 Authority Relative to this Agreement. Each of Green and Merger Sub has
full corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated on its part hereby. The execution and
delivery of this Agreement by each of Green and Merger Sub and the consummation
of the transactions contemplated on its part hereby have been duly authorized by
its Board of Directors, and, other than the approval of Green's shareholders as
provided in Section 5.1 hereof, no other corporate proceedings on the part of
Green or Merger Sub are necessary to authorize the execution and delivery of
this Agreement by Green or Merger Sub or the consummation of the transactions
contemplated on its part hereby. This Agreement has been duly executed and
delivered by each of Green and Merger Sub, and constitutes a legal, valid and
binding obligation of each of Green and Merger Sub, enforceable against each of
Green and Merger Sub in accordance with its terms, except to the extent that
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally or by general equity principles.
3.5 Green Common Stock. The shares of Green Common Stock to be issued in
connection with the Merger have been duly authorized and, when issued as
contemplated hereby at the Effective Time, will be validly issued, fully paid
and non-assessable, and not subject to any preemptive rights.
3.6 No Violation. The execution, delivery and performance of this
Agreement by each of Green and Merger Sub and the consummation by each of them
of the transactions contemplated hereby will not (i) violate or conflict with
any provision of any material law applicable to Green or any Green Subsidiary or
by which any of their property or assets are bound, (ii) require the consent,
waiver, approval, license or authorization of or any filing by Green or any
Green Subsidiary with any public authority (other than (a) the filing of a
pre-merger notification report under The Hart-Scott-Rodino Antitrust
Improvements Act of 1976,
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as amended, and the rules and regulations promulgated thereunder (the "HSR Act")
and the expiration of the applicable waiting period, (b) filings or
authorizations required in connection with or in compliance with the provisions
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Securities Act of 1933, as amended (the "Securities Act"), the CCC, the Bylaws
of the NYSE or the "takeover" or "blue sky" laws of various states and (c) any
other filings and approvals expressly contemplated by this Agreement), (iii)
require the consent, waiver, approval, license or authorization of any person or
entity other than as listed on Schedule 3.6 of the Green Disclosure Schedule or
(iv) violate, conflict with, or result in a breach of or the acceleration of any
obligation under, or constitute a default (or an event which with notice or the
lapse of time or both would become a default) under, or give to others any right
of, or result in any, termination, amendment, acceleration or cancellation of,
or loss of any benefit or creation of a right of first refusal or result in the
creation of a lien or other encumbrance on any property or asset of Green or any
Green Subsidiary pursuant to or under any provision of any charter or bylaw,
indenture, mortgage, lien, lease, license, agreement, contract, instrument,
order, judgment, ordinance, Green Permit (as defined below), law, regulation or
decree to which Green or any Green Subsidiary is subject or by which Green or
any Green Subsidiary or any of their property or assets are bound, except where
the failure to give such notice, make such filings, or obtain such
authorizations, consents, waivers, licenses or approvals, or where such
violations, conflicts, breaches, defaults, terminations, amendments,
accelerations, cancellations, loss of rights or liens, individually or in the
aggregate, would not have a Material Adverse Effect on Green or on Green's or
Merger Sub's ability to consummate the transactions contemplated hereby.
3.7 Compliance with Laws.
(a) Green and each Green Subsidiary hold all licenses, permits and other
authorizations necessary to conduct their respective businesses (collectively,
"Green Permits"), are certified as providers under all applicable Medicare and
Medicaid programs to the extent required to be so certified, and are in
compliance with all Green Permits and all federal, state and other laws, rules,
regulations, ordinances and orders governing their respective businesses,
including, without limitation, the requirements, guidelines, rules and
regulations of Medicare, Medicaid and other third-party reimbursement programs,
except where the failure to hold such licenses, permits and other authorizations
or to so comply, individually or in the aggregate, would not reasonably be
foreseen to have a Material Adverse Effect on Green.
(b) To Green's knowledge, all health care personnel employed by Green or
any Green Subsidiary are properly licensed to the extent required to perform the
duties of their employment in each jurisdiction where such duties are performed,
except where the failure to be so licensed, individually or in the aggregate,
would not have a Material Adverse Effect on Green.
(c) No action or proceeding is pending or, to Green's knowledge, threatened
that may result in the suspension, revocation or termination of any Green
Permit, the issuance of any cease-and-desist order, or the imposition of any
administrative or judicial sanction, and neither Green nor any Green Subsidiary
has received any notice from any governmental authority in respect of the
suspension, revocation or termination of any Green Permit, or any notice of any
intention to conduct any investigation or institute any proceeding, in any such
case where such suspension, revocation, termination, order, sanction,
investigation or proceeding would result, individually or in the aggregate, in a
Material Adverse Effect on Green.
(d) Neither Green nor any Green Subsidiary has received notice that
Medicare, Medicaid or any other third-party reimbursement program has any claims
for disallowance of costs against any of them which could result in offsets
against future reimbursement or recovery of prior payments, which offsets or
recoveries, individually or in the aggregate, would have a Material Adverse
Effect on Green.
(e) Green's and Green Subsidiary's pharmacy operations are in substantial
compliance with all applicable laws, rules and regulations, including but not
limited to, the Food, Drug and Cosmetic Act, the Prescription Drug Marketing Act
and the Comprehensive Drug Abuse Prevention and Control Act of 1970.
3.8 Litigation. Except as may be disclosed in the Green 10-K (as defined
below), there are no suits, arbitrations, mediations, actions, proceedings,
unfair labor practice complaints or grievances pending or, to Green's knowledge,
threatened, or, to Green's knowledge, investigations pending or threatened,
against Green
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or any Green Subsidiary or with respect to any property or asset of any of them
before any court, arbitrator, administrator or governmental or regulatory
authority or body which, individually or in the aggregate, would have a Material
Adverse Effect on Green. Neither Green nor any Green Subsidiary nor any property
or asset of any of them is subject to any order, judgment, injunction or decree
which, individually or in the aggregate, would have a Material Adverse Effect on
Green.
3.9 Financial Statements and Reports. Green has made available to Whitecap
true and complete copies of (a) its Annual Report on Form 10-K for the year
ended December 31, 1994 (the "Green 10-K") as filed with the Securities and
Exchange Commission (the "Commission"), for the year ended December 31, 1994,
(b) all registration statements filed by Green and declared effective under the
Securities Act (other than registration statements on Form S8), and (c) all
other reports, statements and registration statements (including Current Reports
on Form 8-K) filed by it with the Commission. The reports, statements and
registration statements referred to in the immediately preceding sentence
(including, without limitation, any financial statements or schedules or other
information, included or incorporated by reference therein) are referred to in
this Agreement as the "Green SEC Filings." As of the respective times such
documents were filed or, as applicable, became effective, the Green SEC Filings
complied as to form and content, in all material respects, with the requirements
of the Securities Act and the Exchange Act, as the case may be, and the rules
and regulations promulgated thereunder, except for such noncompliance which,
individually or in the aggregate, would not have a Material Adverse Effect on
Green, and did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Green included in the Green SEC
Filings were prepared in accordance with generally accepted accounting
principles (as in effect from time to time) applied on a consistent basis and
(except as may be indicated therein or in the notes thereto) present fairly the
consolidated financial position, consolidated results of operations and
consolidated cash flows of Green and the Green Subsidiaries as of the dates and
for the periods indicated subject, in the case of unaudited interim consolidated
financial statements, to normal recurring year-end adjustments and any other
adjustments described therein. No Green Subsidiary is required to file any form,
report or other document with the Commission.
3.10 Absence of Certain Changes or Events. Other than as disclosed in the
Green 10-K, in the Green SEC Filings filed with the Commission subsequent to
December 31, 1994, or otherwise disclosed in this Agreement, since December 31,
1994 and through the date hereof, the business of Green and of each of the Green
Subsidiaries has been conducted in the ordinary course, and there has not been
(i) any change in the financial condition, results of operations, properties or
business of Green and the Green Subsidiaries, taken as a whole that has resulted
in a Material Adverse Effect on Green; (ii) any material indebtedness incurred
by Green or any Green Subsidiary for money borrowed, except under credit
facilities disclosed in the SEC Filings; (iii) any material transaction or
commitment, except in the ordinary course of business or as contemplated by this
Agreement, entered into by Green or any of the Green Subsidiaries; (iv) any
damage, destruction or loss, whether covered by insurance or not, which,
individually or in the aggregate, would have a Material Adverse Effect on Green;
(v) any material change by Green in accounting principles or methods except
insofar as may be required by a change in generally accepted accounting
principles; (vi) any declaration, setting aside or payment of any dividend
(whether in cash, securities or property) with respect to the Green Common
Stock; or (vii) any material agreement to acquire any assets or stock or other
interests of any third-party; (viii) any increase in the compensation payable or
to become payable by Green or any Green Subsidiary to any employees, officers,
directors, or consultants or in any bonus, insurance, welfare, pension or other
employee benefit plan, payment or arrangement made to, for or with any such
employee, officer, director or consultant (other than as provided in employment
agreements, consulting agreements and welfare and benefit plans set forth on the
Green Disclosure Schedule, and except for increases consistent with past
practice); (ix) any material revaluation by Green or any Green Subsidiary of any
asset (including, without limitation, any writing down of the value of inventory
or writing off of notes or accounts receivable); (x) any mortgage or pledge of
any of the assets or properties of Green or any Green Subsidiary or the
subjection of any of the assets or properties of Green or any Green Subsidiary
to any material liens, charges, encumbrances, imperfections of title, security
interest, options or rights or claims of others with respect thereto; or (xi)
any assumption or guarantee by Green or a Green Subsidiary of the indebtedness
of any person or entity.
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3.11 Employee Benefit Plans and Employment Matters.
(a) The Green Disclosure Schedule lists all employee benefit plans,
collective bargaining agreements, labor contracts, and employment agreements not
otherwise disclosed in the Green 10-K which are not in the ordinary course of
business and which provide for the annual payment of more than $200,000 in which
Green or any Green Subsidiary participates, or by which any of them are bound,
including, without limitation, (i) any profit sharing, deferred compensation,
bonus, stock option, stock purchase, pension, welfare, and incentive plan or
agreement; (ii) any plan providing for "fringe benefits" to their employees,
including, but not limited to, vacation, sick leave, medical, hospitalization
and life insurance; (iii) any written employment agreement and any other
employment agreement not terminable at will; and (iv) any other "employee
benefit plan" (within the meaning of Section 3(3) of the Employment Retirement
Income Security Act of 1974 ("ERISA")) that is not exempted from the coverage of
ERISA by reason of the Department of Labor regulations. Green and the Green
Subsidiaries are in compliance in all material respects with the requirements
prescribed by all laws currently in effect applicable to employee benefit plans
and to any employment agreements, including, but not limited to, ERISA and the
Code. Green and the Green Subsidiaries have each performed all of its
obligations under all such employee benefit plans and employment agreements in
all material respects. There is no pending or, to the knowledge of Green,
threatened legal action, proceeding or investigation against or involving any
Green or Green Subsidiary employee benefit plan which could result in a material
amount of liability to such employee benefit plan or to Green.
(b) Neither Green nor the Green Subsidiaries sponsor or participate in, and
have not sponsored or participated in, any employee benefit pension plan to
which Section 4021 of ERISA applies that would create a material amount of
liability to Green under Title IV of ERISA.
(c) Neither Green nor the Green Subsidiaries sponsor or participate in, and
have not sponsored or participated in, any employee benefit pension plan that is
a "multiemployer plan" (within the meaning of Section 3(37) of ERISA).
(d) All group health plans of Green and the Green Subsidiaries have been
operated in compliance with the group health plan continuation coverage
requirements of Section 4980B of the Code in all material respects, to the
extent such requirements are applicable.
(e) There have been no acts or omissions by Green or the Green Subsidiaries
or by any fiduciary, disqualified person or party in interest with respect to an
employee benefit plan of Green or any Green Subsidiaries that have given rise to
or may give rise to a material amount of fines, penalties, taxes, or related
charges under Sections 502(c), 502(i) or 4071 of ERISA or under Chapter 43 of
the Code.
(f) No "reportable event," as defined in ERISA Section 4043, other than
those events with respect to which the Pension Benefit Guaranty Corporation has
waived the notice requirement, has occurred with respect to any of the employee
benefit plans of Green.
(g) The Green Disclosure Schedule sets forth the name of each director,
officer or employee of Green or any Green Subsidiary entitled to receive any
material amount of benefit or payment under any existing employment agreement,
severance plan or other benefit plan solely as a result of the consummation of
any transaction contemplated by this Agreement, and with respect to each such
person, the nature of such benefit or the amount of such payment, the event
triggering the benefit or payment, and the date of, and parties to, such
employment agreement, severance plan or other benefit plan.
(h) Green has furnished Whitecap with true and correct copies of all plan
documents and employment agreements referred to on the Green Disclosure
Schedule, including all amendments thereto, and all related summary plan
descriptions to the extent that one is required by law.
(i) For purposes of this Section 3.11, any reference to "Green" shall be
deemed to include a reference to any entity that is aggregated with Green under
the provisions of Section 414 of the Code, to the extent that those aggregation
rules apply.
3.12 Labor Matters. Except as disclosed on Schedule 3.12 of the Green
Disclosure Schedule, neither Green nor any Green Subsidiary is a party to any
collective bargaining agreement with respect to any of their
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employees. None of the employees of Green or any Green Subsidiary is represented
by any labor union. To the knowledge of Green, there is no activity involving
any employees of Green or the Green Subsidiaries seeking to certify a collective
bargaining unit or engaging in any other organizational activity.
3.13 Insurance. Green and the Green Subsidiaries maintain insurance
against such risks and in such amounts as Green reasonably believes are
necessary to conduct its business. Green and the Green Subsidiaries are not in
default with respect to any provisions or requirements of any such policy, nor
have any of them failed to give notice or present any claim thereunder in a due
and timely fashion, except for defaults or failures which, individually or in
the aggregate, would not have a Material Adverse Effect on Green. Neither Green
nor any Green Subsidiary has received any notice of cancellation or termination
in respect of any of its insurance policies. Green's captive insurance
subsidiary is adequately capitalized to insure against such risks as Green
reasonably believes necessary to conduct its business, in accordance with
industry standards.
3.14 Environmental Matters. Except as disclosed on Schedule 3.14 of the
Green Disclosure Schedule, Green and the Green Subsidiaries are in compliance
with all environmental laws, and have obtained all necessary licenses and
permits required to be issued pursuant to any environmental law, except where
the failure to so comply or to obtain such licenses or permits, individually or
in the aggregate, would not have a Material Adverse Effect on Green. Neither
Green nor any Green Subsidiary has received notice or communication from any
governmental agency with, respect to (i) any hazardous substance relative to its
operations, property or assets or (ii) any investigation, demand or request
pursuant to enforcing any environmental law relating to it or its operations,
and no such investigation is pending or, to the knowledge of Green threatened,
in any case, which would lead to a Material Adverse Effect on Green.
3.15 Tax Matters. Green has paid, or made adequate provision for on its
balance sheet at December 31, 1994 included in the Green 10-K, all federal,
state, local, foreign or other governmental income, franchise, payroll,
F.I.C.A., unemployment, withholding, real property, personal property, sales,
payroll, disability and all other taxes imposed on Green or any Green Subsidiary
or with respect to any of their respective properties, or otherwise payable by
them, including interest and penalties, if any, in respect thereof
(collectively, "Green Taxes"), for the Green taxable period ended December 31,
1994 and all fiscal periods of Green prior thereto, except such nonpayment, or
failure to make adequate provision, which, individually or in the aggregate,
would not have a Material Adverse Effect on Green. Green Taxes paid and/or
incurred from December 31, 1994 until the Closing Date shall include only Green
Taxes incurred in the ordinary course of business determined in the same manner
as in the taxable period ended December 31, 1994. Green and each of the Green
Subsidiaries have timely filed all income tax, excise tax, sales tax, use tax,
gross receipts tax, franchise tax, employment and payroll related tax, property
tax, and all other tax returns which Green and/or such Green Subsidiary (as the
case may be) are required to file ("Green Tax Returns"), and have paid or
provided for all the amounts shown to be due thereon, except where such failure
to make such timely filings, individually or in the aggregate, would not have a
Material Adverse Effect on Green, and except for the nonpayment of such amounts
which, individually or in the aggregate, would not have a Material Adverse
Effect on Green. Neither Green nor any Green Subsidiary (i) has filed or entered
into, or is otherwise bound by, any election, consent or extension agreement
that extends any applicable statute of limitations with respect to taxable
periods of Green, (ii) is a party to any contractual obligation requiring the
indemnification or reimbursement of any person with respect to the payment of
any Green Taxes, other than among Green and the Green Subsidiaries, or (iii) has
received any claim by an authority in a jurisdiction where neither Green nor any
Green Subsidiary files Green Tax Returns that they are or may be subject to
Green Taxes by that jurisdiction, except for any such claims as, individually or
in the aggregate, would not have a Material Adverse Effect on Green. No action
or proceeding is pending or, to Green's knowledge, threatened by any
governmental authority for any audit, examination, deficiency, assessment or
collection from Green or any Green Subsidiary of any Green Taxes, no unresolved
claim for any deficiency, assessment or collection of any Green Taxes has been
asserted against Green or any Green Subsidiary, and all resolved assessments of
Green Taxes have been paid or are reflected on the Green balance sheet at
December 31, 1994, except for any of the foregoing which, individually or in the
aggregate, would not have a Material Adverse Effect on Green.
3.16 Intellectual Property. Except as disclosed on Schedule 3.16 of the
Green Disclosure Schedule, Green and the Green Subsidiaries own, possess or have
the right to use all franchises, patents, trademarks,
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service marks, tradenames, licenses and authorizations (collectively, "Green
Intellectual Property Rights") which are necessary, to the conduct of their
respective businesses. To the knowledge of Green, neither Green nor any Green
Subsidiary is infringing or otherwise violating intellectual property rights of
any person which infringement or violation would subject Green or any Green
Subsidiary to liabilities which, individually or in the aggregate, would have a
Material Adverse Effect on Green or which would prevent Green or any Green
Subsidiary from conducting their respective businesses substantially in the
manner in which they are now being conducted. No claim has been made or, to
Green's knowledge, threatened against Green or any Green Subsidiary alleging any
such violation.
3.17 Related Party Transactions. Except as disclosed in the Green SEC
Filings, there have been no material transactions between Green or any Green
Subsidiary on the one hand, and any (i) officer or director of Green or any
Green Subsidiary, (ii) record or beneficial owner of five percent or more of the
voting securities of Green, or (iii) affiliate (as such term is defined in
Regulation 12b-2 promulgated under the Exchange Act) of any such officer,
director or beneficial owner, on the other hand, other than payment of
compensation for services rendered to Green or the Green Subsidiaries or the
grant of stock options to purchase shares of Green Common Stock.
3.18 No Undisclosed Material Liabilities. Except as disclosed in the Green
10-K, neither Green nor any of the Green Subsidiaries has incurred any
liabilities of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, that, individually or in the aggregate,
would have a Material Adverse Effect on Green other than (i) liabilities
incurred in the ordinary course of business consistent with past practice since
December 31, 1994, (ii) liabilities that have been repaid, discharged or
otherwise extinguished, and (iii) liabilities under or contemplated by this
Agreement.
3.19 No Default. Neither Green nor any of the Green Subsidiaries is in
default or violation (and no event has occurred which with notice or the lapse
of time or both would constitute a default or violation) of any term, condition
or provision of (a) its charter or By-Laws, (b) any note, bond, mortgage,
indenture, license, agreement, contract, lease, commitment or other obligation
to which Green or any of the Green Subsidiaries is a party or by which they or
any of their properties or assets may be bound, or (c) any order, writ,
injunction, decree, statute, rule or regulation applicable to Green or any of
the Green Subsidiaries, except in the case of clauses (b) and (c) above for
defaults or violations which would not have a Material Adverse Effect on Green.
3.20 Title to Properties; Encumbrances. Except as disclosed in the Green
10-K or the Green SEC Filings and as described in clause (ii) below: (i) each of
Green and the Green Subsidiaries has good, valid and marketable title to, or a
valid leasehold interest in, all of its properties and assets (real, personal
and mixed, tangible and intangible), including, without limitation, all the
properties and assets reflected in the consolidated balance sheet of Green and
the Green Subsidiaries at December 31, 1994 included in the Green 10-K (except
for properties and assets disposed of in the ordinary course of business and
consistent with past practices since December 31, 1994) and (ii) none of such
properties or assets are subject to any liability, obligation, claim, lien,
mortgage, pledge, security interest, conditional sale agreement, charge or
encumbrance of any kind (whether absolute, accrued, contingent or otherwise),
except for liens for taxes not yet due and payable and minor imperfections of
title and encumbrance, if any, which are not substantial in amount, do not
materially detract from the value of the property or assets subject thereto and
do not impair the operations of Green and the Green Subsidiaries. Except as
would not cause a Material Adverse Effect on Green, all of the properties and
assets of Green and the Green Subsidiaries are, in all material respects, in
good operating condition and repair, and maintenance thereon has not been
deferred beyond industry standards, and are suitable for the purposes for which
they are presently being used.
3.21 Pooling of Interests. Neither Green nor any of the Green Subsidiaries
nor, to the knowledge of Green, any of their respective directors, officers or
shareholders has taken any action which would interfere with the parties'
ability to account for the Merger as a pooling of interests in accordance with
Accounting Principles Board Opinion No. 16, the interpretive releases issued
pursuant thereto, and the pronouncements of the Commission.
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3.22 Representations Complete. None of the representations or warranties
made by Green or Merger Sub herein, or certificate furnished by Green or Merger
Sub pursuant to this Agreement, when all such documents are read together in
their entirety, contains or will contain at the Effective Time, to Green or
Merger Sub's knowledge, any untrue statement of a material fact, or omits or
will omit at the Effective Time to state any material fact necessary in order to
make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
3.23 Brokers. Neither Green nor any Green Subsidiary has paid or is
obligated to pay any fee or commission to any broker, finder, investment banker
or other intermediary in connection with this Agreement, except that Green has
retained Salomon Brothers Inc and Smith Barney Inc. as its financial advisors
for the transactions contemplated hereby.
3.24 Opinion of Financial Advisors. Green has received the opinions of
each of Salomon Brothers Inc and Smith Barney Inc. to the effect that, as of the
date hereof, the Exchange Ratio is fair to Green, from a financial point of
view.
3.25 Whitecap Stock Ownership. Except as contemplated pursuant to the
terms of this Agreement and the transactions to be consummated hereby, neither
Green nor any of the Green Subsidiaries own any shares of Whitecap Common Stock
or rights to acquire or dispose of Whitecap Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WHITECAP
Whitecap represents and warrants to Green and Merger Sub that, except as
set forth in the Disclosure Schedule delivered herewith (the "Whitecap
Disclosure Schedule"):
4.1 Corporate Organization. Whitecap and each of its Subsidiaries (the
"Whitecap Subsidiaries") is a corporation or partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, with all requisite corporate or partnership power and authority to
own, operate and lease its properties and to carry on its business as it is now
being conducted, and is qualified or licensed to do business and is in good
standing in each jurisdiction in which the failure to be so qualified or
licensed, individually or in the aggregate, would have a Material Adverse Effect
on Whitecap (a "Material Adverse Effect on Whitecap"). True and complete copies
of the Articles of Incorporation and the Bylaws together with all amendments
thereto of Whitecap and the Articles of Incorporation or Certificates of Limited
Partnership of the Whitecap Subsidiaries, together with all amendments thereto
have been made available to Green. Such charter, Bylaws and certificates are in
full force and effect. The Whitecap Disclosure Schedule 4.1 contains a complete
and accurate list of all of the Whitecap Subsidiaries. Neither Whitecap nor any
Whitecap Subsidiary is in violation of any provision of its charter or Bylaws or
certificate of limited partnership which could have a Material Adverse Effect on
Whitecap.
4.2 Capital Stock. As of the date hereof, the authorized capital stock of
Whitecap consists in its entirety of (i) 25,000,000 shares of common stock, $.01
par value, and (ii) 1,000,000 shares of Special Stock, $1.00 par value, none of
which are issued and outstanding. As of March 31, 1995, (i) 12,481,040 shares of
Whitecap Common Stock were issued and outstanding, (ii) options and warrants to
acquire 347,315 shares of Whitecap Common Stock were outstanding under the
Whitecap Option Plans (as hereinafter defined) and (iii) 572,800 shares of
Whitecap Common Stock were reserved for issuance under all of the Whitecap
Option Plans. Except as set forth on Schedule 4.1 (such Schedule 4.1 to also
include a list of all partners of any Limited Partnership of which Whitecap is a
general partner), all of the outstanding shares of capital stock of each of the
Whitecap Subsidiaries are owned beneficially and of record by Whitecap or a
Whitecap Subsidiary free and clear of all liens, charges, encumbrances, options,
rights of first refusal or limitations or agreements regarding voting rights of
any nature. All of the outstanding shares of capital stock of Whitecap and each
of the Whitecap Subsidiaries have been validly issued and are fully paid and
nonassessable. Whitecap has heretofore delivered to Green, correct and complete
copies of the Stock Option Plans and warrants to purchase Whitecap Common Stock,
in each case as currently in effect. Each option agreement sets forth for each
stock option holder (i) such holder's name, (ii) the date of grant of stock
options to such holder, (iii) the
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number of shares of Whitecap Common Stock into which each such grant is
exercisable, (iv) the exercise price per share of Whitecap Common Stock with
respect to each such grant, and (v) the periods during which such stock options
or portions thereof are exercisable by such holder. Except as set forth in this
Section 4.2 or in Schedule 4.2 of the Whitecap Disclosure Schedule, there are no
options, warrants or other rights, agreements, arrangements or commitments of
any character relating to the issued or unissued capital stock of Whitecap or
any Whitecap Subsidiary or obligating Whitecap or any Whitecap Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in,
Whitecap or any Whitecap Subsidiary. All shares of Whitecap Common Stock subject
to issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. Except as set forth in this
Section 4.2, there are no outstanding contractual obligations of Whitecap or any
Whitecap Subsidiary to repurchase, redeem or otherwise acquire any shares of
Whitecap Common Stock or any capital stock of any Whitecap Subsidiary, or make
any material investment (in the form of a loan, capital contribution or
otherwise) in, any Whitecap Subsidiary or any other person. Each outstanding
share of capital stock of each Whitecap Subsidiary is duly authorized, validly
issued, fully paid and nonassessable and, except as set forth in Section 4.2 of
the Whitecap Disclosure Schedule, each such share owned by Whitecap or another
Whitecap Subsidiary is free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on Whitecap's
or such other Whitecap Subsidiary's voting rights, charges and other
encumbrances of any nature whatsoever.
4.3 Options or Other Rights. Except as disclosed in Section 4.2 or in the
Whitecap 10-K (hereinafter defined), there is no outstanding right,
subscription, warrant, call, unsatisfied preemptive right, option or other
agreement or arrangement of any kind to purchase or otherwise to receive from
Whitecap or any Whitecap Subsidiary any of the outstanding, authorized but
unissued, unauthorized or treasury shares of the capital stock or any other
security of Whitecap or any Whitecap Subsidiary and there is no outstanding
security of any kind convertible into or exchangeable for such capital stock.
There are no agreements or understandings among Whitecap or any Whitecap
Subsidiary on the one hand and any other person on the other hand concerning the
registration of any security of Whitecap or a Whitecap Subsidiary under the
Securities Act. Except as set forth on Schedule 4.3 of the Whitecap Disclosure
Schedule, no options granted under the Whitecap Option Plans have provisions
which accelerate the vesting or right to exercise such options upon the
occurrence of certain events, including, but not limited to, the consummation of
the Merger.
4.4 Authority Relative to this Agreement. Whitecap has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated on its part hereby. The execution and delivery of this
Agreement by Whitecap and the consummation of the transactions contemplated on
its part hereby have been duly authorized by its Board of Directors, and, other
than the approval of Whitecap's shareholders as provided in Section 5.1 hereof,
no other corporate proceedings on the part of Whitecap are necessary to
authorize the execution and delivery of this Agreement by Whitecap or the
consummation of the transactions contemplated on its part hereby. This Agreement
has been duly executed and delivered by Whitecap, and constitutes legal, valid
and binding obligations of Whitecap, enforceable against Whitecap in accordance
with its terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general equity principles.
4.5 No Violation. The execution, delivery and performance of this
Agreement by Whitecap and the consummation by it of the transactions
contemplated hereby will not (i) violate or conflict with any provision of any
material law applicable to Whitecap or any Whitecap Subsidiary or by which any
property or assets are bound, (ii) require the consent, waiver, approval,
license or authorization of or any filing by Whitecap or any Whitecap Subsidiary
with any public authority (other than (a) the filing of a Pre-Merger
Notification Report under the HSR Act and the expiration of the applicable
waiting period, (b) filings or authorizations required in connection or in
compliance with the provisions of the Exchange Act, the Securities Act, the
GBCC, the Bylaws of the NYSE or the "takeover" or "blue sky" laws of various
states and (c) any other filings and approvals expressly contemplated by this
Agreement), (iii) require the consent, waiver, approval, license or
authorization of any person or entity other than as listed on Schedule 4.5 of
the Whitecap Disclosure Schedule or, (iv) violate, conflict with or result in a
breach of or the acceleration of any obligation under, or
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constitute a default (or an event which with notice or the lapse of time or both
would become a default) under, or give to others any right of, or result in any,
termination, amendment, acceleration or cancellation of, or loss of any benefit
or creation of a right of first refusal or result in the creation of a lien or
other encumbrance on any property or asset of Whitecap or any Whitecap
Subsidiary pursuant to or under any provision of any charter or bylaw,
indenture, mortgage, lien, lease, license, agreement, contract, instrument,
order, judgment, ordinance, Whitecap Permit (as defined below), law, regulation
or decree to which Whitecap or Whitecap Subsidiary is subject or by which
Whitecap or any Whitecap Subsidiary or any of their property or assets are
bound, except where the failure to give such notice, make such filings, or
obtain such authorizations, consents, waivers, licenses or approvals, or where
such violations, conflicts, breaches, defaults, terminations, amendments,
accelerations, cancellations, loss of rights or liens, individually or in the
aggregate, would not have a Material Adverse Effect on Whitecap or on Whitecap's
ability to consummate the transactions contemplated hereby.
4.6 Compliance with Laws.
(a) Whitecap and each Whitecap Subsidiary hold all licenses, permits and
other authorizations necessary to conduct its business (collectively, "Whitecap
Permits"), are certified as providers under all applicable Medicare and Medicaid
programs to the extent required to be so certified, and are in compliance with
all Whitecap Permits and all federal, state and other laws, rules, regulations,
ordinances and orders governing its business, including, without limitation, the
requirements, guidelines, rules and regulations of Medicare, Medicaid and other
third-party reimbursement programs, except where the failure to hold such
licenses, permits and other authorizations or to so comply, individually or in
the aggregate, would not reasonably be foreseen to have a Material Adverse
Effect on Whitecap.
(b) To Whitecap's knowledge, all health care personnel employed by Whitecap
or any Whitecap Subsidiary are properly licensed to the extent required to
perform the duties of their employment in each jurisdiction where such duties
are performed, except where the failure to be so licensed, individually or in
the aggregate, would not have a Material Adverse Effect on Whitecap.
(c) No action or proceeding is pending or, to Whitecap's knowledge,
threatened that may result in suspension, revocation or termination of any
Whitecap Permit, the issuance of any cease-and-desist order, or the imposition
of any administrative or judicial sanction, and neither Whitecap nor any
Whitecap Subsidiary has received any notice from any governmental authority in
respect of the suspension, revocation or termination of any Whitecap Permit, or
any notice of any intention to conduct any investigation or institute any
proceeding, in any such case where such suspension, revocation, termination,
order, sanction, investigation, or proceeding would result, individually or in
the aggregate, in a Material Adverse Effect on Whitecap. There are no deficiency
notices pending as of April 30, 1995 with respect to Whitecap's Permits which
are not set forth in Schedule 4.6(c) of the Whitecap Disclosure Schedule and
which would result in a Material Adverse Effect on Whitecap.
(d) Neither Whitecap nor any Whitecap Subsidiary has received notice that
Medicare, Medicaid or any other third-party reimbursement program has any claims
for disallowance of costs against any of them which could result in offsets
against future reimbursement or recovery of prior payments, which offsets or
recoveries, individually or in the aggregate, would have a Material Adverse
Effect on Whitecap.
4.7 Litigation. Except as may be disclosed in the Whitecap SEC Filings (as
defined below) or in the audit letters delivered to Green, there are no suits,
arbitrations, mediations, actions, proceedings, unfair labor practice complaints
or grievances pending or, to Whitecap's knowledge, threatened or, to Whitecap's
knowledge, investigations pending or threatened, against Whitecap or any
Whitecap Subsidiary or with respect to any property or asset of any of them
before any court, arbitrator, administrator or governmental or regulatory
authority or body which, individually or in the aggregate, would have a Material
Adverse Effect on Whitecap. Neither Whitecap nor any Whitecap Subsidiary nor any
property or asset of any of them is subject to any order, judgment, injunction
or decree which, individually or in the aggregate, would have a Material Adverse
Effect on Whitecap.
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4.8 Financial Statements and Reports. Whitecap has made available to Green
true and complete copies of (i) its Annual Report on Form 10-K for the year
ended June 30, 1994 (the "Whitecap 10-K"), as filed with the Commission, (ii)
its proxy statement relating to the annual meetings of its shareholders held on
February 16, 1995, (iii) all registration statements filed by Whitecap and
declared effective under the Securities Act (other than registration statements
on Form S-8) and (iv) all other reports, statements and registration statements
(including Current Reports on Form 8-K) filed by it with the Commission. The
reports, statements and registration statements referred to in the immediately
preceding sentence (including, without limitation, any financial statements or
schedules or other information included or incorporated by reference therein)
are referred to in this Agreement as the "Whitecap SEC Filings." As of the
respective times such documents were filed or, as applicable, became effective,
the Whitecap SEC Filings complied as to form and content, in all material
respects, with the requirements of the Securities Act and the Exchange Act, as
the case may be, and the rules and regulations promulgated thereunder, except
for such noncompliance which, individually or in the aggregate, would not have a
Material Adverse Effect on Whitecap, and did not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of Whitecap
included in the Whitecap SEC Filings were prepared in accordance with generally
accepted accounting principles (as in effect from time to time) applied on a
consistent basis and (except as may be indicated therein or in the notes
thereto) present fairly the consolidated financial position, consolidated
results of operations and consolidated cash flows of Whitecap and the Whitecap
Subsidiaries as of the dates and for the periods indicated subject, in the case
of unaudited interim consolidated financial statements, to normal recurring
year-end adjustment and any other adjustment described therein.
4.9 Absence of Certain Changes or Events. Other than as disclosed in the
Whitecap 10-K or in the Whitecap SEC Filings filed with the Commission
subsequent to June 30, 1994 or otherwise disclosed in this Agreement or on the
Whitecap Disclosure Schedule, since December 31, 1994 and through the date
hereof, the business of Whitecap and of each of the Whitecap Subsidiaries has
been conducted in the ordinary course, and there has not been (i) any change in
the financial condition, results of operations, properties or business of
Whitecap and the Whitecap Subsidiaries, taken as a whole that has resulted in a
Material Adverse Effect on Whitecap; (ii) any material indebtedness incurred by
Whitecap or any Whitecap Subsidiary for money borrowed, except under credit
facilities disclosed in the Whitecap SEC Filings; (iii) any material transaction
or commitment, except in the ordinary course of business or as contemplated by
this Agreement, entered into by Whitecap or any of the Whitecap Subsidiaries;
(iv) any damage, destruction or loss, whether covered by insurance or not,
which, individually or in the aggregate, would have a Material Adverse Effect on
Whitecap; (v) any declaration, setting aside or payment of any dividend (whether
in cash, securities or property) with respect to the Whitecap Common Stock (vi)
any material agreement to acquire any assets or stock or other interests of any
third-party; (vii) any increase in the compensation payable or to become payable
by Whitecap or any Whitecap Subsidiary to any employees, officers, directors, or
consultants or in any bonus, insurance, welfare, pension or other employee
benefit plan, payment or arrangement made to, for or with any such employee,
officer, director or consultant (other than as provided in employment
agreements, consulting agreements and welfare and benefit plans set forth on the
Whitecap Disclosure Schedule, and except for increases consistent with past
practice); (viii) any material revaluation by Whitecap or any Whitecap
Subsidiary of any asset (including, without limitation, any writing down of the
value of inventory or writing off of notes or accounts receivable); (ix) any
material change by Whitecap in accounting principles or methods except insofar
as may be required by a change in generally accepted accounting principles; (x)
any mortgage or pledge of any of the assets or properties of Whitecap or any
Whitecap Subsidiary or the subjection of any of the assets or properties of
Whitecap or any Whitecap Subsidiary to any material liens, charges,
encumbrances, imperfections of title, security interest, options or rights or
claims of others with respect thereto; or (xi) any assumption or guarantee by
Whitecap or a Whitecap Subsidiary of the indebtedness of any person or entity.
4.10 Employee Benefit Plans and Employment Matters.
(a) The Whitecap Disclosure Schedule lists all employee benefit plans,
collective bargaining agreements, labor contracts, and employment agreements not
otherwise disclosed in the Whitecap SEC Filings,
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which provide for the annual payment of more than $200,000 in which Whitecap or
any Whitecap Subsidiary participates, or by which any of them are bound,
including, without limitation, (i) any profit sharing, deferred compensation,
bonus, stock option, stock purchase, pension, welfare, and incentive plan or
agreement; (ii) any plan providing for "fringe benefits" to their employees,
including, but not limited to, vacation, sick leave, medical, hospitalization
and life insurance; (iii) any written employment agreement and any other
employment agreement not terminable at will; and (iv) any other "employee
benefit plan" (within the meaning of Section 3(3) of ERISA) that is not exempted
from the coverage of ERISA by reason of the Department of Labor regulations.
Whitecap and the Whitecap Subsidiaries are in compliance in all material
respects with the requirement prescribed by all laws currently in effect
applicable to employee benefit plans and to any employment agreement, including,
but not limited to, ERISA and the Code. Whitecap and the Whitecap Subsidiaries
have each performed all of its obligations under all such employee benefit plans
and employment agreements in all material respects. There is no pending or, to
the knowledge of Whitecap, threatened legal action, proceeding or investigation
against or involving any Whitecap or Whitecap Subsidiary employee benefit plan
which could result in a material amount of liability to such employee benefit
plan or to Whitecap.
(b) Neither Whitecap nor the Whitecap Subsidiaries sponsor or participate
in, and have not sponsored or participated in, any employee benefit pension plan
to which Section 4021 of ERISA applies that would create a material amount of
liability to Whitecap under Title IV of ERISA.
(c) Neither Whitecap nor the Whitecap Subsidiaries sponsor or participate
in, and have not sponsored or participated in, any employee benefit pension plan
that is a "multiemployer plan" (within the meaning of Section 3(37) of ERISA).
(d) All group health plans of Whitecap and the Whitecap Subsidiaries have
been operated in compliance with the group health plan continuation coverage
requirements of Section 4980B of the Code in all material respects, to the
extent such requirements are applicable.
(e) There have been no acts or omissions by Whitecap or any Whitecap
Subsidiary or by any fiduciary, disqualified person or party in interest with
respect to an employee benefit plan of Whitecap or any Whitecap Subsidiaries
that have given rise to or may give rise to a material amount of fines,
penalties, taxes, or related charges under Sections 502(c), 502(i) or 4071 of
ERISA or under Chapter 43 of the Code.
(f) No "reportable event," as defined in ERISA Section 4043, other than
those events with respect to which the Pension Benefit Guaranty Corporation has
waived the notice requirement, has occurred with respect to any of the employee
benefit plans of Whitecap.
(g) The Whitecap Disclosure Schedule sets forth the name of each director,
officer or employee of Whitecap or any Whitecap Subsidiary entitled to receive
any material amount of benefit or payment under any existing employment
agreement, severance plan or other benefit plan solely as a result of the
consummation of any transaction contemplated by this Agreement, and with respect
to each such person, the nature of such benefit or the amount of such payment,
the event triggering the benefit or payment, and the date of, and parties to,
such employment agreement, severance plan or other benefit plan.
(h) Whitecap has furnished Green with true and correct copies of all plan
documents and employment agreements referred to on the Whitecap Disclosure
Schedule, including all amendments thereto, and all related summary plan
descriptions to the extent that one is required by law.
(i) For purposes of this Section 4.10, any reference to "Whitecap" shall be
deemed to include a reference to any entity that is aggregated with Whitecap
under the provisions of Section 414 of the Code, to the extent that those
aggregation rules apply.
4.11 Labor Matters. Neither Whitecap nor any Whitecap Subsidiary is a
party to any collective bargaining agreement with respect to any of their
employees. None of the employees of Whitecap or any Whitecap Subsidiary is
represented by any labor union. To the knowledge of Whitecap, there is no
activity involving any employees of Whitecap or the Whitecap Subsidiaries
seeking to certify a collective bargaining unit or engaging in any other
activity.
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4.12 Insurance. Whitecap and the Whitecap Subsidiaries maintain insurance
against such risks and in such amounts as Whitecap reasonably believes are
necessary to conduct its business. Whitecap and the Whitecap Subsidiaries are
not in default with respect to any provisions or requirements of any such policy
nor have any of them failed to give notice or present any claim thereunder in a
due and timely fashion, except for defaults or failures which, individually or
in the aggregate, would not have a Material Adverse Effect on Whitecap. Neither
Whitecap nor any Whitecap Subsidiary has received any notice of cancellation or
termination in respect of any of its insurance policies.
4.13 Environmental Matters. Whitecap and the Whitecap Subsidiaries are in
compliance with all environmental laws, and have obtained all necessary licenses
and permits required to be issued pursuant to any environmental law, except
where the failure to so comply or to obtain such licenses or permits,
individually or in the aggregate, would not have a Material Adverse Effect on
Whitecap. Neither Whitecap nor any Whitecap Subsidiary has received notice or
communication from any governmental agency with respect to (i) any hazardous
substance relative to its operations, property or assets or (ii) any
investigation, demand or request pursuant to enforcing any environmental law
relating to it or its operations, and no such investigation is pending or, to
the knowledge of Whitecap threatened, in any case, which would lead to a
Material Adverse Effect on Whitecap.
4.14 Tax Matters. Whitecap has paid, or made adequate provision for on its
June 30, 1994 balance sheet, all federal, state, local, foreign or other
governmental income, franchise, payroll, F.I.C.A., unemployment, withholding,
real property, personal property, sales, payroll, disability and all other taxes
imposed on Whitecap or any Whitecap Subsidiary or with respect to any of their
respective properties, or otherwise payable by them, including interest and
penalties, if any, in respect thereof (collectively, "Whitecap Taxes"), for the
Whitecap taxable period ended June 30, 1994 and all fiscal periods of Whitecap
prior thereto, except such nonpayment, or failure to make adequate provision,
which, individually or in the aggregate, would not have a Material Adverse
Effect on Whitecap. Whitecap Taxes paid and/or incurred from June 30, 1994 until
the Closing Date shall include only Whitecap Taxes incurred in the ordinary
course of business determined in the same manner as in the taxable period ending
on June 30, 1994. Whitecap and each of the Whitecap Subsidiaries have timely
filed all income tax, excise tax, sales tax, use tax, gross receipts tax,
franchise tax, employment and payroll related tax, property tax, and all other
tax returns which Whitecap and/or such Whitecap Subsidiary (as the case may be)
are required to file ("Whitecap Tax Returns"), and have paid or provided for all
the amounts shown to be due thereon, except where such failure to make such
timely filings, individually or in the aggregate, would not have a Material
Adverse Effect on Whitecap, and except for the nonpayment of such amounts which,
individually or in the aggregate, would not have a Material Adverse Effect on
Whitecap. Neither Whitecap nor any Whitecap Subsidiary (i) has filed or entered
into, or is otherwise bound by, any election, consent or extension agreement
that extends any applicable statute of limitations with respect to taxable
periods of Whitecap, (ii) is a party to any contractual obligation requiring the
indemnification or reimbursement of any person with respect to the payment of
any Whitecap Taxes, other than among Whitecap and the Whitecap Subsidiaries,
(iii) has elected to be treated as a consenting corporation under Section 341(f)
of the Code, or (iv) has received any claim by an authority in a jurisdiction
where neither Whitecap nor any Whitecap Subsidiary files Whitecap Tax Returns
that they are or may be subject to Whitecap Taxes by that jurisdiction, except
for any such claims as, individually or in the aggregate, would not have a
Material Adverse Effect on Whitecap. No action or proceeding is pending or, to
Whitecap's knowledge, threatened by any governmental authority for any audit,
examination, deficiency, assessment or collection from Whitecap or any Whitecap
Subsidiary of any Whitecap Taxes, no unresolved claim for any deficiency,
assessment or collection of any Whitecap Taxes has been asserted against
Whitecap or any Whitecap Subsidiary, and all resolved assessments of Whitecap
Taxes have been paid or are reflected on the Whitecap balance sheet at June 30,
1994 included in its Annual Report on Form 10-K for the period ended on such
date, except for any of the foregoing which, individually or in the aggregate,
would not have a Material Adverse Effect on Whitecap.
4.15 Intellectual Property. Whitecap and the Whitecap Subsidiaries own,
possess or have the right to use all franchises, patents, trademarks, service
marks, tradenames, licenses and authorizations (collectively, "Whitecap
Intellectual Property Rights") which are necessary to the conduct of their
respective businesses.
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To the knowledge of Whitecap, neither Whitecap nor any Whitecap Subsidiary is
infringing or otherwise violating the intellectual property rights of any person
which infringement or violation would subject Whitecap or any Whitecap
Subsidiary to liabilities which, individually or in the aggregate, would have a
Material Adverse Effect on Whitecap or which would prevent Whitecap or any
Whitecap Subsidiary from conducting their respective businesses substantially in
the manner in which they are now being conducted. No claim has been made or, to
Whitecap's knowledge, threatened against Whitecap or any Whitecap Subsidiary
alleging any such violation.
4.16 Related Party Transactions. Except as disclosed in the Whitecap SEC
Filings, there have been no material transactions between Whitecap or any
Whitecap Subsidiary on the one hand, and any (i) officer or director of Whitecap
or any Whitecap Subsidiary, (ii) record or beneficial owner of five percent or
more of the voting securities of Whitecap or (iii) affiliate (as such term is
defined in Regulation 12b-2 promulgated under the Exchange Act) of any such
officer, director or beneficial owner, on the other hand, other than payment of
compensation for services rendered to Whitecap or the Whitecap Subsidiaries.
4.17 No Undisclosed Material Liabilities. Except as disclosed in the
Whitecap SEC Filings, neither Whitecap nor any of the Whitecap Subsidiaries has
incurred any liabilities of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, that, individually or in the
aggregate, would have a Material Adverse Effect on Whitecap other than (i)
liabilities incurred in the ordinary course of business consistent with past
practice since December 31, 1994, (ii) liabilities that have been repaid,
discharged or otherwise extinguished and (iii) liabilities under this Agreement.
4.18 No Default. Neither Whitecap nor any of the Whitecap Subsidiaries is
in default or violation (and no event has occurred which with notice or the
lapse of time or both would constitute a default or violation) of any term,
condition or provision of (a) its charter or By-Laws, (b) any note, bond,
mortgage, indenture, license, agreement, contract, lease, commitment or other
obligation to which Whitecap or any of the Whitecap Subsidiaries is a party or
by which they or any of their properties or assets may be bound, or (c) any
order, writ, injunction, decree, statute, rule or regulation applicable to
Whitecap or any of the Whitecap Subsidiaries, except in the case of clauses (b)
and (c) above for defaults or violations which would not have a Material Adverse
Effect on Whitecap.
4.19 Title to Properties; Encumbrances. Schedule 4.19 of the Whitecap
Disclosure Schedule sets forth all real property owned or leased by Whitecap and
the Whitecap Subsidiaries (the "Real Property"), indicating which facilities are
owned and which are leased. Except as disclosed in the Whitecap SEC Filings and
as described in clause (ii) below: (i) each of Whitecap and the Whitecap
Subsidiaries has good, valid and marketable title to, or a valid leasehold
interest in, as applicable, all of its properties and assets (real, personal and
mixed, tangible and intangible), including, without limitation, all Real
Property and all the other properties and assets reflected in the consolidated
balance sheet of Whitecap and the Whitecap Subsidiaries at December 31, 1994
(except for properties and assets disposed of in the ordinary course of business
and consistent with past practices since December 31, 1994) and (ii) none of
such properties or assets are subject to any liability, obligation, claim, lien,
mortgage, pledge, security interest, conditional sale agreement, charge or
encumbrance of any kind (whether absolute, accrued, contingent or otherwise),
except for liens for taxes not yet due and payable and minor imperfections of
title and encumbrance, if any, which are not substantial in amount, do not
materially detract from the value of the property or assets subject thereto and
do not impair the operations of Whitecap and the Whitecap Subsidiaries. A true
and complete copy of each of the Whitecap real property leases has been made
available to Merger Sub and Green. Each of the leases is in full force and
effect and there is no default by landlord or tenant existing thereunder (and no
event has occurred which, with notice and the passage of time or both, would
constitute a default under such Lease) which would have a Material Adverse
Effect on Whitecap. Except as would not cause a Material Adverse Effect on
Whitecap, all of the properties and assets of Whitecap and the Whitecap
Subsidiaries are, in all material respects, in good operating condition and
repair, and maintenance thereon has not been deferred beyond industry standards,
and are suitable for the purposes for which they are presently being used.
4.20 Pooling of Interests. Neither Whitecap nor any of the Whitecap
Subsidiaries nor, to the knowledge of Whitecap, any of their respective
directors, officers or shareholders has taken any action which
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would interfere with the parties' ability to account for the Merger as a pooling
of interests in accordance with Accounting Principles Board Opinion No. 16, the
interpretive releases issued pursuant thereto, and the pronouncements of the
Commission.
4.21 Representations Complete. None of the representations or warranties
made by Whitecap herein or in any Schedule hereto, including the Whitecap
Disclosure Schedule, or certificate furnished by Whitecap pursuant to this
Agreement, or the Whitecap SEC Filings, when all such documents are read
together in their entirety, contains or will contain at the Effective Time, to
Whitecap's knowledge, any untrue statement of a material fact, or omits or will
omit at the Effective Time to state any material fact necessary in order to make
the statements contained herein or therein, in the light of the circumstances
under which made, not misleading.
4.22 Brokers. Neither Whitecap nor any Whitecap Subsidiary has paid or is
obligated to pay any fee or commission to any broker, finder, investment banker
or other intermediary in connection with this Agreement, except that Whitecap
has retained The Chicago Dearborn Company and McDonald & Co. Securities, Inc. as
its financial advisors for the transactions contemplated hereby.
4.23 Opinion of Financial Advisors. Whitecap has received the opinions of
each of The Chicago Dearborn Company and McDonald & Company Securities, Inc. to
the effect that, as of the date hereof, the Merger is fair to the holders of
Whitecap Common Stock, from a financial point of view.
4.24 Contracts. Except as set forth in Schedule 4.24 of the Whitecap
Disclosure Schedule, neither Whitecap nor any Whitecap Subsidiary has entered
into any agreement for pharmacy services, which agreement is not terminable upon
30 days notice, which agreements separately or in the aggregate are material to
Whitecap and the Whitecap Subsidiaries, taken as a whole.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 Joint Proxy Statement/Prospectus; Registration Statement;
Shareholders' Meeting.
(a) Each of Green and Whitecap agree that this Agreement shall be submitted
to their respective shareholders for approval at a meeting (the "Meeting") duly
called and held pursuant to applicable state law. As soon as practicable after
the date of this Agreement, each of Whitecap and Green shall take all action, to
the extent necessary in accordance with applicable law and their respective
charters and Bylaws, to convene each Meeting promptly to consider and vote upon
the approval of the Merger and such other matters as may be necessary or
desirable to consummate the Merger and the transactions contemplated hereby. As
soon as practicable after the date of this Agreement, Whitecap and Green shall
jointly prepare and file with (i) the Commission, subject to the prior approval
of the other party, which approval shall not be unreasonably withheld,
preliminary joint proxy materials relating to each Meeting as required by the
Exchange Act, and a registration statement on Form S-4 (as amended or
supplemented, the "Registration Statement") relating to the registration under
the Securities Act of the shares of Green Common Stock issuable to the holders
of the Whitecap Shares, and (ii) state securities administrators, such
registration statements or other documents as may be required under applicable
blue sky laws to qualify or register the shares of Green Common Stock issuable
to the holders of the Whitecap Shares (the "Blue Sky Filings"). Whitecap, Merger
Sub and Green will use their reasonable best efforts to cause the Registration
Statement to become effective as soon as practicable. Promptly after the
Registration Statement has become effective and all applicable blue sky laws
have been complied with, Whitecap and Green shall mail the joint proxy
statement/prospectus included in the Registration Statement to their respective
shareholders. Such joint proxy statement/prospectus at the time it initially is
mailed to the shareholders of Whitecap and the shareholders of Green and all
duly filed amendments or revisions made thereto, if any, similarly mailed are
hereinafter referred to as the "Proxy Statement." Notice of the Whitecap Meeting
shall be mailed to the shareholders of Whitecap and notice of the Green Meeting
shall be mailed to the shareholders of Green along with the Proxy Statement.
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(b) Each party represents and warrants that the information supplied or to
be supplied by it for and included or incorporated by reference in the
Registration Statement, the Blue Sky Filings, the Proxy Statement and any other
documents to be filed with the Commission or any regulatory agency in connection
with the transactions contemplated, or any amendments thereto, hereby will, at
the respective times such documents are filed or, as applicable, declared
effective and, as of the Effective Time, and, with respect to the Proxy
Statement, when first published, sent or given to the shareholders of Whitecap
and the shareholders of Green and at the time of the Meetings, not be false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading.
(c) Each party covenants and agrees that (i) if, at any time prior to the
Effective Time, any event relating to it or any of its affiliates, officers or
directors is discovered that should be set forth in an amendment to the
Registration Statement or Blue Sky Filings or a supplement to the Proxy
Statement, such party will promptly inform the other parties, and such amendment
or supplement will be promptly filed with the Commission and appropriate state
securities administrators and disseminated to the shareholders of Whitecap and
Green, to the extent required by applicable federal and state securities laws,
and (ii) documents which either party files or is responsible for filing with
the Commission and any regulatory agency in connection with the Merger
(including, without limitation, the Proxy Statement) will comply as to form and
content in all material respects with the provisions of applicable law.
Notwithstanding the foregoing, no party makes any representations or warranties
with respect to any information that has been supplied by the other party or by
its auditors, attorneys, financial advisors, other consultants or advisors
specifically for use in the Registration Statement, Blue Sky Filing, the Proxy
Statement, or any other documents to be filed with the Commission or any
regulatory agency in connection with the transactions contemplated hereby.
(d) Whitecap hereby represents that its Board of Directors has, (i)
determined that the Merger is fair to and in the best interests of Whitecap's
shareholders, (ii) approved the Merger and (iii) resolved to and will recommend
in the Proxy Statement adoption of this Agreement and authorization of the
Merger by the shareholders of Whitecap; provided, however, that such
determination, approval or recommendation may be amended, modified or withdrawn
to the extent required by the fiduciary obligations of Whitecap's Board of
Directors under applicable law, as advised as to legal matters by outside
counsel. Green hereby represents that its Board of Directors has (i) determined
that the Merger is fair to and in the best interests of Green's shareholders,
(ii) approved the Merger and (iii) resolved to and will recommend in the Proxy
Statement adoption of this Agreement and authorization of the Merger by the
shareholders of Green, provided, however, that such determination, approval or
recommendation may be amended, modified or withdrawn to the extent required by
the fiduciary obligations of Green's Board of Directors under applicable law, as
advised as to legal matters by outside counsel.
(e) Whitecap shall use all reasonable efforts to cause to be delivered to
Green a letter of KPMG Peat Marwick, Whitecap's independent accountants, dated a
date within two (2) business days before the date on which the Registration
Statement shall become effective and addressed to Green, of the kind
contemplated by the Statement of Auditing Standards with respect to Letters to
Underwriters promulgated by the American Institute of Certified Public
Accountants (the "AICPA Statement"), in form and substance reasonably
satisfactory to Green and customary in scope and substance for letters delivered
by independent public accountants in connection with registration statements
similar to the Registration Statement. Green shall use all reasonable efforts to
cause to be delivered to Whitecap a letter of Ernst & Young LLP, Green's
independent accountants, dated a date within two (2) business days before the
date on which the Registration Statement shall become effective and addressed to
Whitecap, of the kind contemplated by the AICPA Statement, in form and substance
reasonably satisfactory to Whitecap and customary in scope and substance for
letters delivered by independent public accountants in connection with
registration statements similar to the Registration Statement. Whitecap shall,
and shall cause KPMG Peat Marwick and its other representatives to, fully
cooperate with Green, Ernst & Young LLP and its other representatives in seeking
to obtain confirmation from the Commission that the Merger can be accounted for
as a "pooling of interests."
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5.2 Conduct of the Business of Whitecap Prior to the Effective Time. Prior
to the Effective Time, except as set forth on Schedule 5.2 of the Whitecap
Disclosure Schedules or otherwise consented to or approved in writing by Green,
which consent shall not be unreasonably withheld, or expressly permitted by, or
required to consummate the transactions contemplated by, this Agreement:
(a) Whitecap and the Whitecap Subsidiaries shall conduct their
respective businesses in the ordinary course and consistent in all material
respects with past practice and shall use all reasonable efforts to
preserve substantially intact their respective business organizations, to
keep available the services of their present officers, employees and
consultants and to preserve their present relationships with customers,
suppliers, payors and other persons with whom they have a significant
business relationship; provided, however, that the loss of any officer,
employee, consultant, customer, payor or supplier prior to the Effective
Time shall not constitute a breach of this covenant;
(b) Neither Whitecap nor any Whitecap Subsidiary shall (i) amend its
charter or Bylaws, (ii) declare, set aside or pay any dividend or other
distribution or payment in cash, securities or property in respect of
shares of the Whitecap Common Stock, (iii) make any direct or indirect
redemption, retirement, purchase or other acquisition of any of its capital
stock (except if required by written agreement existing as of the date
hereof) or (iv) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly any of its outstanding shares
of capital stock;
(c) Neither Whitecap nor any Whitecap Subsidiary shall, directly or
indirectly, (i) issue, grant, sell or pledge or agree or propose to issue,
grant, sell or pledge any shares of, or rights or securities of any kind to
acquire any shares of, the capital stock of Whitecap or such Whitecap
Subsidiary, except that Whitecap may grant stock options to employees and
consultants under the Whitecap Option Plans (as defined in Section 5.7) and
may issue shares of Whitecap Common Stock upon the exercise of stock
options outstanding on the date hereof pursuant to the terms thereof
existing as of the date hereof or issued hereafter in accordance herewith,
(ii) other than in the ordinary course of business and consistent with past
practices incur any material indebtedness for borrowed money, except under
credit facilities existing as of the date hereof and as they may be amended
from time to time or pursuant to a substitute credit facility on terms
comparable to such existing credit facilities, (iii) waive, release, grant
or transfer any rights of material value, except in the ordinary course of
business, (iv) except as provided in clause (v) below, merge or consolidate
with any person or adopt a plan of liquidation or dissolution, (v) acquire
(or enter into an agreement to acquire) any assets, stock or other
interests of a third-party except for cash transactions involving total
cash consideration in any individual transaction not in excess of $25
million or taking all such acquisitions in the aggregate, involving
consideration not in excess of $25 million, and which are of a nature so as
not to require a merger or consolidation with Whitecap or to cause the
Registration Statement or the Proxy Statement to need to be amended by
Green, (vi) transfer, lease, license, sell or dispose of a material portion
of assets or any material assets, other than in the ordinary course of
business and consistent with past practices, (vii) change any accounting
principles or methods except insofar as may be required by changes in
generally accepted accounting principles or (viii) mortgage or pledge any
of their assets or properties or subject any of their assets or properties
to any material liens, charges, encumbrances, imperfections of title,
security interests, options or rights or claims of others with respect
thereto (and shall maintain such assets in good condition, reasonable wear
and tear excepted);
(d) Neither Whitecap nor any Whitecap Subsidiary will, directly or
indirectly, (i) increase the cash compensation payable or to become payable
by it to any of its employees, officers, consultants or directors (except
in accordance with employment or consulting agreements, and welfare and
benefit plans set forth on the Whitecap Disclosure Schedule, and except for
increases consistent with past practice and which are otherwise reasonably
necessary for the operation of the business of Whitecap and the Whitecap
Subsidiaries), (ii) enter into, adopt or amend any stock option, stock
purchase, profit sharing, pension, retirement, deferred compensation,
restricted stock or severance plan, agreement or arrangement for the
benefit of employees, officers, directors or consultants of Whitecap or any
Whitecap Subsidiary, (iii) enter into or amend any employment or consulting
agreement, except in the ordinary course of business, or (iv) make any loan
or advance to, or enter into any written contract, lease or commitment
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with, any officer, employee, consultant or director of Whitecap or any
Whitecap Subsidiary, except in the ordinary course of business;
(e) Neither Whitecap nor any Whitecap Subsidiary shall, directly or
indirectly, assume, guarantee, endorse or otherwise become responsible for
the obligations of any other individual, corporation or other entity, or
make any loans or advances to any individual, corporation or other entity
except in the ordinary course of business and consistent with past
practices;
(f) Neither Whitecap nor any Whitecap Subsidiary shall take any action
which would interfere with the parties' abilities to account for the merger
as a pooling of interests; and
(g) Neither Whitecap nor any Whitecap Subsidiary shall authorize or
enter into any agreement to do any of the things described in clauses (a)
through (f) of this Section 5.2.
5.3 Conduct of the Business of Green Prior to the Effective Time. Prior to
the Effective Time, except as otherwise consented to or approved in writing by
Whitecap, which consent shall not be unreasonably withheld, or expressly
permitted by, or required to consummate the transactions contemplated by this
Agreement:
(a) Green and the Green Subsidiaries shall conduct their respective
businesses in the ordinary course and consistent in all material respects
with past practice and shall use all reasonable efforts to preserve
substantially intact their respective business organizations, to keep
available the services of their present officers, employees and consultants
and to preserve their present relationships with customers, suppliers and
other persons with whom they have a significant business relationship;
provided, however, that the loss of any officer, employee, consultant,
customer or supplier prior to the Effective Time shall not constitute a
breach of this covenant;
(b) Neither Green nor any Green Subsidiary shall (i) amend its charter
or Bylaws, (ii) declare, set aside or pay any dividend or other
distribution or payment in cash, securities or property in respect of
shares of the Green Common Stock, (iii) make any direct or indirect
redemption, retirement, purchase or other acquisition of any of its capital
stock, except if required by a written agreement existing as of the date
hereof, or (iv) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly any of its outstanding shares
of capital stock;
(c) Neither Green nor any Green Subsidiary shall, directly or
indirectly, (i) issue, grant, sell or pledge or agree or propose to issue,
grant, sell or pledge any shares of, or rights or securities of any kind to
acquire any shares of, the capital stock of Green, except that Green may
grant stock options to employees under the Stock Incentive Plan and the
1994 Plan and may issue shares of Green Common Stock upon the exercise of
stock options outstanding on the date hereof or issued hereinafter in
accordance herewith (ii) other than in the ordinary course of business and
consistent with past practice, incur any material indebtedness for borrowed
money, except under credit facilities existing as of the date hereof and as
they may be amended from time to time or pursuant to a substitute credit
facility on terms comparable to such existing credit facilities, (iii)
waive, release, grant or transfer any rights of material value, except in
the ordinary course of business, (iv) except as provided in clause (vii)
below, merge or consolidate with any person or adopt a plan of liquidation
or dissolution, (v) transfer, lease, license, sell or dispose of any
material assets other than in the ordinary course of business and
consistent with past practice, (vi) change any accounting principles or
methods except insofar as may be required by changes in generally accepted
accounting principles, (vii) without the consent of the Whitecap Directors
(hereinafter defined), acquire (or enter into an agreement to acquire) any
assets, stock or other interests of a third-party except for cash
transactions involving total cash consideration in any individual
transaction not in excess of $25 million or taking all such acquisitions in
the aggregate, involving consideration not in excess of $25 million, and
which are of a nature so as not to require a merger or consolidation with
Green or to cause the Registration Statement or the Proxy Statement to need
to be amended by Green, or (viii) mortgage or pledge any of their assets or
properties or subject any of their assets or properties to any material
liens, charges, encumbrances, imperfections of title, security interests,
options or rights or claims of others with respect thereto (and shall
maintain such assets in good condition, reasonable wear and tear excepted);
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(d) Neither Green nor any Green Subsidiary shall take any action which
would interfere with the parties' abilities to account for the merger as a
pooling of interests;
(e) Neither Green nor any Green Subsidiary will, directly or
indirectly, (i) increase the cash compensation payable or to become payable
by it to any of its employees, officers, consultants or directors (except
in accordance with employment or consulting agreements, and welfare and
benefit plans set forth on the Green Disclosure Schedule, and except for
increases consistent with past practice and which are otherwise reasonably
necessary for the operation of the business of Green and the Green
Subsidiaries), (ii) enter into, adopt or amend any stock option, stock
purchase, profit sharing, pension, retirement, deferred compensation,
restricted stock or severance plan, agreement or arrangement for the
benefit of employees, officers, directors or consultants of Green or any
Green Subsidiary, (iii) enter into or amend any employment or consulting
agreement, except in the ordinary course of business, or (iv) make any loan
or advance to, or enter into any written contract, lease or commitment
with, any officer, employee, consultant or director of Green or any Green
Subsidiary, except in the ordinary course of business;
(f) Neither Green nor any Green Subsidiary shall, directly or
indirectly, assume, guarantee, endorse or otherwise become responsible for
the obligations of any other individual, corporation or other entity, or
make any loans or advances to any individual, corporation or other entity
except in the ordinary course of business and consistent with past
practices; and
(g) Neither Green nor any Green Subsidiary shall enter into an
agreement to do any of the things described in clauses (a) through (f) of
this Section 5.3.
5.4 Access to Properties and Records. Each party shall afford to the other
and their respective accountants, counsel and representatives ("Respective
Representatives"), reasonable access during normal business hours throughout the
period prior to the Effective Time to all of their respective properties
(including, without limitation, books, contracts, commitments and written
records) and shall make reasonably available their respective officers and
employees to answer fully and promptly questions put to them thereby; provided,
however, that no investigation pursuant to this Section 5.4 shall alter any
representation or warranty of any party hereto or the conditions to the
obligations of the parties hereto.
5.5 No Solicitation of Transactions. (a) None of Whitecap or any Whitecap
Subsidiary shall, directly or indirectly, through any officer, director, agent
or otherwise, initiate or solicit or knowingly encourage (including by way of
furnishing non-public information or assistance), or take any other action to
facilitate knowingly, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Third Party
Transaction (as such term is defined below in this Section 5.5), or enter into
or maintain or continue discussions or negotiate with any person or entity in
furtherance of such inquiries or to obtain a Third Party Transaction, or agree
to or endorse any Third Party Transaction, or authorize or permit any of the
officers, directors or employees of Whitecap or any Whitecap Subsidiary or any
investment banker, financial advisor, attorney, accountant or other
representative retained by Whitecap or any Whitecap Subsidiary to take any such
action, and Whitecap shall notify Green orally (within one business day) and in
writing (as promptly as practicable) of all relevant details relating to all
inquiries and proposals which it or any Whitecap Subsidiary or any such officer,
director, employee, investment banker, financial advisor, attorney, accountant
or other representative may receive relating to any of such matters and if such
inquiry or proposal is in writing, Whitecap shall forthwith deliver to Green a
copy of such inquiry or proposal; provided, however, that nothing contained in
this Section 5.5 shall prohibit the Board of Directors of Whitecap from (i)
furnishing information to, or entering into discussions or negotiations with,
any person or entity that makes an unsolicited inquiry or expression of interest
to acquire Whitecap pursuant to a merger, consolidation, share exchange,
business combination, tender or exchange offer or other similar transaction, if,
and only to the extent that (A) the Board of Directors of Whitecap, determines
in its good faith judgment, based as to legal matters on the advice of legal
counsel, that such action is required for the Board of Directors of Whitecap to
comply with its fiduciary duties to shareholders under applicable law and (B)
prior to furnishing such information to, or entering into discussions or
negotiations with, such person or entity, Whitecap (x) provides reasonable
notice to Green to the effect that it is furnishing information to, or entering
into discussions or negotiations with, such person or entity and (y) receives
from such person or entity an executed confidentiality agreement in
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reasonably customary form on terms not more favorable to such person or entity
than the terms contained in the Confidentiality Agreement, (ii) complying with
Rule 14e-2 promulgated under the Exchange Act with regard to a tender or
exchange offer or (iii) failing to make or withdrawing or modifying its
recommendation referred to in Section 5.1(d) if there exists a Third Party
Transaction and the Board of Directors of Whitecap determines, in its good faith
judgment, based as to legal matters on the advice of legal counsel, that such
action is required for the Board of Directors of Whitecap to comply with its
fiduciary duties to shareholders under applicable law.
(b) None of Green or any Green Subsidiary shall, directly or indirectly,
through any officer, director, agent or otherwise, initiate or solicit or
knowingly encourage (including by way of furnishing non-public information or
assistance), or take any other action to facilitate knowingly, any inquiries or
the making of any proposal that constitutes, or may reasonably be expected to
lead to, any Third Party Transaction (as such term is defined below in this
Section 5.5), or enter into or maintain or continue discussions or negotiate
with any person or entity in furtherance of such inquiries or to obtain a Third
Party Transaction, or agree to or endorse any Third Party Transaction, or
authorize or permit any of the officers, directors or employees of Green or any
Green Subsidiary or any investment banker, financial advisor, attorney,
accountant or other representative retained by Green or any Green Subsidiary to
take any such action, and Green shall notify Whitecap orally (within one
business day) and in writing (as promptly as practicable) of all relevant
details relating to all inquiries and proposals which it or any Green Subsidiary
or any such officer, director, employee, investment banker, financial advisor,
attorney, accountant or other representative may receive relating to any of such
matters and if such inquiry or proposal is in writing, Green shall forthwith
deliver to Whitecap a copy of such inquiry or proposal; provided, however, that
nothing contained in this Section 5.5 shall prohibit the Board of Directors of
Green from (i) furnishing information to, or entering into discussions or
negotiations with, any person or entity that makes an unsolicited inquiry or
expression of interest to acquire Green pursuant to a merger, consolidation,
share exchange, business combination, tender or exchange offer or other similar
transaction, if, and only to the extent that (A) the Board of Directors of
Green, determines in its good faith judgment, based as to legal matters on the
advice of legal counsel, that such action is required for the Board of Directors
of Green to comply with its fiduciary duties to shareholders under applicable
law and (B) prior to furnishing such information to, or entering into
discussions or negotiations with, such person or entity, Green (x) provides
reasonable notice to Whitecap to the effect that it is furnishing information
to, or entering into discussions or negotiations with, such person or entity and
(y) receives from such person or entity an executed confidentiality agreement in
reasonably customary form on terms not more favorable to such person or entity
than the terms contained in the Confidentiality Agreement, (ii) complying with
Rule 14e-2 promulgated under the Exchange Act with regard to a tender or
exchange offer or (iii) failing to make or withdrawing or modifying its
recommendation referred to in Section 5.1(d) if there exists a Third Party
Transaction and the Board of Directors of Green determines, in its good faith
judgment, based as to legal matters on the advice of legal counsel, that such
action is required for the Board of Directors of Green to comply with its
fiduciary duties to shareholders under applicable law.
(c) For purposes of this Agreement, "Third Party Transaction" shall mean
with respect to a party hereto any of the following (other than transactions
between Green, Merger Sub and Whitecap contemplated hereby): (i) any merger,
consolidation, share exchange, business combination, or other similar
transaction involving such party; (ii) any sale, exchange, transfer or other
disposition of 20% or more of the assets of such party and its Subsidiaries,
taken as a whole, in a single transaction or series of transactions; (iii) any
sale of or tender offer or exchange offer for 20% or more of the outstanding
shares of capital stock of such party or the filing of a registration statement
under the Securities Act in connection therewith; (iv) any person acquiring
beneficial ownership or the right to acquire beneficial ownership of, or any
"group" (as such term is defined under Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder) having been formed for the purpose
of effecting a Third Party Transaction referred to in Sections 5.5(c)(i), (ii)
or (iii) which beneficially owns or has the right to acquire beneficial
ownership of, 20% or more of the then outstanding shares of capital stock of
such party; or (v) any public announcement by such party of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of the
foregoing with respect to such party.
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5.6 Employee Benefit Plans. Except as otherwise provided in this
Agreement, the Whitecap employee benefit plans listed on the Whitecap Disclosure
Schedule which are in effect at the date of this Agreement shall remain in
effect immediately following the Effective Time. Green and Whitecap shall
cooperate in coordinating their respective benefit plans, and any Whitecap
employee benefit plan may be terminated after the Effective Time, to the extent
reasonably comparable benefits, considered in the aggregate, are made available
to employees of Whitecap under one or more employee benefits plans of Green or
any Green Subsidiary.
5.7 Treatment of Options.
(a) Each Whitecap Stock Option issued pursuant to Whitecap's warrants or
Whitecap's stock option plans (collectively, the "Whitecap Option Plans") set
forth in the Whitecap Disclosure Schedule, whether or not vested or exercisable,
shall be assumed by Green and shall constitute an option to acquire, on the same
terms and conditions as were applicable under such assumed Whitecap Stock
Option, a number of shares of Green Common Stock equal to the product of the
Exchange Ratio and the number of shares of Whitecap Common Stock subject to such
Whitecap Stock Option, at a price per share equal to the aggregate exercise
price for the shares of Whitecap Common Stock subject to such Whitecap Stock
Option divided by the number of full shares of Green Common Stock deemed to be
purchasable pursuant to such Whitecap Stock Option; provided, however, that (i)
subject to the provisions of clause (ii) below, the shares of Green Common Stock
that may be purchased upon exercise of such Whitecap Stock Option shall not
include any fractional shares and, upon the last such exercise of such Whitecap
Stock Option, a cash payment shall be made for any fractional shares based upon
the per share average of the highest and lowest sale price of the Green Common
Stock as reported on the NYSE on the date of such exercise, and (ii) in the case
of any Whitecap Stock Option to which Section 421 of the Code applies by reason
of its qualification under Section 422 or Section 423 of the Code ("Qualified
Stock Options"), the option price, the number of shares purchasable pursuant to
such Whitecap Stock Option and the terms and conditions of exercise of such
Whitecap Stock Option shall be determined in order to comply with Section 424 of
the Code. As soon as practicable after the Effective Time, Green shall deliver
to holders of Whitecap Stock Options appropriate option agreements representing
the right to acquire shares of Green Common Stock on the same terms and
conditions as contained in the outstanding Whitecap Stock Options (subject to
any adjustments required by the preceding sentence), upon surrender of the
outstanding Whitecap Stock Options. Green shall comply with the terms of the
Whitecap Option Plans as they apply to the Whitecap Stock Options assumed as set
forth above including, but not limited to, provisions regarding changes of
control that may apply with respect to the Merger.
(b) Green shall take all corporate action necessary to reserve for issuance
a sufficient number of shares of Green Common Stock for delivery upon exercise
of the Whitecap Stock Options assumed in accordance with this Section 5.7. Green
shall file a registration statement on Form S-8 (or any successor form) or
another appropriate form, effective as of the Effective Time, with respect to
shares of Green Common Stock subject to such Whitecap Stock Options and shall
use all reasonable efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such Whitecap Stock
Options remain outstanding. With respect to those individuals who subsequent to
the Merger will be subject to the reporting requirements under Section 16(a) of
the Exchange Act, Green shall administer the Whitecap Option Plans assumed
pursuant to this Section 5.7 in a manner that complies with rule 16b-3
promulgated under the Exchange Act to the extent the applicable Whitecap Option
Plan complied with such rule prior to the Merger.
5.8 Settlement of Options and Rights. To the extent not already provided
for in the Whitecap Option Plans, Whitecap shall cause the holders of at least
95 percent of the options granted under the Whitecap Option Plans to have
entered into binding agreements with Whitecap and/or Green on the terms set
forth in paragraph (a) of Section 5.7 of this Agreement prior to the Effective
Time. Whitecap shall cause any other options, rights or agreements of any kind
to acquire the Whitecap Common Stock or other securities of Whitecap to have
been either cancelled, terminated, modified or exchanged on terms and conditions
reasonably satisfactory to Green prior to the Effective Time.
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5.9 Existing Indemnification Agreements. Green and the Surviving
Corporation, jointly and severally, shall insure and guaranty that the
provisions with respect to indemnification by Whitecap and the Whitecap
Subsidiaries or with respect to director liability to Whitecap or any Whitecap
Subsidiary now existing in favor of any present or former director, officer,
employee or agent (and their respective heirs and assigns) of Whitecap or any
Whitecap Subsidiary, respectively (the "Indemnified Parties"), as set forth in
their respective charters or Bylaws or pursuant to other agreements (including
any insurance policies), shall survive the Merger, shall not be amended,
repealed or modified in any manner as to adversely affect the rights of such
Indemnified Parties and shall continue in full force and effect for a period of
at least six years from the Effective Time; provided, however, that Green and
the Surviving Corporation shall be required to maintain or obtain such insurance
coverage only (i) if it is available for an annual premium not in excess of two
times the last annual premium paid by Whitecap or the Whitecap Subsidiaries
prior to the date of this Agreement, and (ii) for three years after the
Effective Time. This Section 5.9 shall survive the closing of all of the
transactions contemplated hereby, is intended to benefit the officers and
employees of Whitecap and of the Whitecap Subsidiaries at the Effective Time and
each of the Indemnified Parties (each of which shall be entitled to enforce this
Section 5.9 against Green and the Surviving Corporation, as the case may be, as
a third-party beneficiary of this Agreement), and shall be binding on all
successors and assigns of Green and the Surviving Corporation.
5.10 Confidentiality. The Confidentiality Agreements, each dated May 2,
1995 (collectively, the "Confidentiality Agreement") between Whitecap and Green
(copies of which are attached hereto as Exhibit C) and the letter agreement
between Whitecap and Green dated February 22, 1995 are hereby affirmed by Green
and Whitecap and the terms thereof are herewith incorporated herein by reference
and shall continue in full force and effect until the Effective Time shall have
occurred, and if this Agreement is terminated or if the Effective Time shall not
have occurred for any reason whatsoever, the Confidentiality Agreement (or the
letter agreement) shall thereafter remain in full force and effect in accordance
with its terms; provided, however, to the extent there are any provisions in the
Confidentiality Agreement (or the letter agreement) inconsistent with the terms
of this Agreement, the terms of this Agreement shall control. Each of Green and
Whitecap agrees that it will not, and will cause its Respective Representatives
not to, use any information obtained pursuant to Section 5.4 for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement. Subject to the requirements of law, each party hereto will keep
confidential, and will cause its Respective Representatives to keep
confidential, all information and documents obtained pursuant to Section 5.4
except as otherwise consented to by the other party and except for such
information which is at the time of disclosure or later becomes generally known
to the public (other than as a result of disclosure by a party hereto in
violation of this Section 5.10); provided, however, that neither Green nor
Whitecap shall be precluded from making any disclosure which it deems required
by law in connection with the Merger. In the event that any party is required to
disclose any information or documents pursuant to the immediately preceding
sentence, such party shall promptly give written notice of such disclosure that
is proposed to be made to the other party so that the parties can work together
to limit the disclosure to the greatest extent possible and, in the event that
either party is legally compelled to disclose any information, to seek a
protective order or other appropriate remedy or both. Upon any termination of
this Agreement, each of Green and Whitecap will collect and deliver to the other
party or destroy all documents obtained pursuant to Section 5.4 or otherwise
from such party or its Respective Representatives by it or any of its Respective
Representatives then in their possession and any copies thereof.
5.11 Reasonable Best Efforts. Subject to the terms and conditions herein
provided, the parties hereto shall: (i) promptly make their respective filings
and thereafter make any other required submissions under the HSR Act with
respect to the Merger; (ii) use all reasonable efforts to cooperate with one
another in (A) determining which filings are required to be made prior to the
Effective Time with, and which consents, approvals, permits or authorizations
("Third Party Consents") are required to be obtained prior to the Effective Time
from governmental or regulatory authorities of the United States and the several
states in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (B) timely making all
such filings and timely seeking all such Third Party Consents; and (iii) use all
reasonable efforts to take, or cause to be taken, all other action and do, or
cause to be done, all other things necessary, proper or appropriate to
consummate and make effective the transactions contem-
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plated by this Agreement. If, at any time after the Effective Time, any further
action is necessary or desirable to carry out the purpose of this Agreement, the
proper officers and directors of the parties hereto shall take all such
necessary action. No party hereto shall (i) take any action for the purpose of
delaying, impairing or impeding the receipt of any Third Party Consent, or the
making of any required filing or registration, (ii) take any action that could
reasonably have the effect of preventing Green and Whitecap from accounting for
the Merger as a pooling of interests or (iii) subject to compliance with
mandatory disclosure requirements under applicable securities laws, take any
action (or fail to take any action) that could reasonably be expected to have an
adverse effect on the price of the Green Common Stock. Each of Green and
Whitecap shall use reasonable best efforts to obtain the executed Shareholder
Voting Agreements contemplated by Sections 6.2(h) and 6.3(j), respectively,
subject to applicable proxy regulations under the Exchange Act.
5.12 Certification of Stockholder Vote. At or prior to the Closing of the
transactions contemplated by this Agreement, Whitecap and Green shall deliver to
each other a certificate of their respective Secretary setting forth the number
of shares of Whitecap Common Stock or Green Common Stock, as the case may be,
voted in favor of adoption of this Agreement and consummation of the Merger and
the number of shares of Whitecap Common Stock or Green Common Stock voted
against adoption of this Agreement and consummation of the Merger.
5.13 Affiliate Letters. At least 30 days prior to the Closing Date,
Whitecap shall deliver to Green a list of names and addresses of those persons
who were, in Whitecap's reasonable judgment, at the record date for the Whitecap
Meeting, "affiliates" (each such person a "Rule 145 Affiliate") of Whitecap
within the meaning of Rule 145 of the rules and regulations promulgated under
the Securities Act. Whitecap shall provide Green such information and documents
as Green shall reasonably request for purposes of reviewing such list. Whitecap
shall cause to be delivered to Green, prior to the Closing Date, from each of
the Rule 145 Affiliates of Whitecap identified in the foregoing list, an
Affiliate Letter in the form attached hereto as Exhibit B. Green shall be
entitled to place legends as specified in such Affiliate Letters on the
certificates evidencing any Green Common Stock to be received by such Rule 145
Affiliates pursuant to the terms of this Agreement, consistent with the terms of
such Affiliate Letters. Green shall promptly and as soon as practicable publish
financial results reflecting at least 30 days of post-Merger combined
operations, as contemplated by the Affiliate Letter.
5.14 Listing Application. Green shall promptly prepare and submit to the
NYSE a listing application covering the shares of Green Common Stock issuable in
the Merger, and shall use its best efforts to obtain, prior to the Effective
Time, approval for the listing of such Green Common Stock, subject to official
notice of issuance.
5.15 Supplemental Disclosure Schedules. Each of Green and Whitecap shall
supplement their respective Disclosure Schedules delivered in connection with
this Agreement as of the Effective Time to the extent necessary to reflect
matters permitted by, or consented to by, the other party under this Agreement.
In addition, from time to time prior to the Effective Time, each of Green and
Whitecap will promptly deliver to the other party such amended or supplemental
Disclosure Schedules as may be necessary to make the Schedules accurate and
complete in all material respects as of the Effective Time; provided, however,
that no such disclosure shall have any effect for the purpose of determining the
satisfaction of the conditions set forth in Article VI of this Agreement.
5.16 No Action. Except as contemplated by this Agreement, no party hereto
will, nor will either such party permit any of its Subsidiaries to, take or
agree or commit to take any action that is reasonably likely to make any of its
representations or warranties hereunder inaccurate in any material respect at
the date made (to the extent so limited), or as of the Effective Time.
5.17 Conduct of Business of Merger Sub. Merger Sub shall not conduct any
business from the date of this Agreement, other than to consummate the Merger
and the transactions contemplated by this Agreement.
5.18 Corporate Governance.
(a) Immediately prior to the Effective Time, the Board of Directors of
Green shall take all action necessary (including any necessary amendments of the
Bylaws of Green) to implement the provisions of this
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Section 5.18 and to cause the full Board of Directors of Green, at and
immediately after the Effective Time, to consist of the following nine
directors: Gene E. Burleson, Charles M. Blalack, Robert L. Parker, Antoinette
Hubenette, M.D., Joel S. Kanter, Ronald G. Kenny, William G. Petty, Jr., Edward
V. Regan and Gary U. Rolle. If any of Robert L. Parker, Ronald G. Kenny or
William G. Petty, Jr. are unable or unwilling to serve as a director of Green at
the Effective Time, such individual or individuals shall be replaced by an
individual or individuals designated by the Board of Directors of Whitecap and
approved by the Board of Directors of Green, such approval not to be
unreasonably withheld, and if any of the remaining individuals named above are
unable or unwilling to serve, such individual or individuals shall be replaced
by an individual or individuals designated by the Board of Directors of Green.
(b) Following the Effective Time and continuing through the 1997 Annual
Meeting of Shareholders of Green, any vacancy on the Board of Directors of Green
arising among Robert L. Parker, Ronald G. Kenny or William G. Petty, Jr. (or any
other individual or individuals selected by the Board of Directors of Whitecap
as a replacement director pursuant to Section 5.19(a) or by the foregoing
individuals or their successors) and any nominee selected to fill a director
position occupied by any of the foregoing individuals (the "Whitecap Directors")
shall be nominated on behalf of the Green Board of Directors, filled or selected
by a majority vote of the remaining Whitecap Directors and approved by the Board
of Directors of Green, such approval not to be unreasonably withheld. At the
1996 and 1997 Annual Meetings of Shareholders of Green, the Board of Directors
of Green shall use good faith efforts to cause the Board of Directors to consist
of no more than eight members, including the three Whitecap Directors.
(c) Immediately prior to the Effective Time, the Board of Directors of
Green shall take all action necessary to cause the committees of the Board of
Directors of Green to consist of the members set forth herein. William G. Petty,
Jr. shall be appointed to serve as a member of the Nominating Committee. William
G. Petty, Jr. and Ronald G. Kenny shall be appointed to serve as members of the
Audit Committee. Robert L. Parker shall be appointed to serve as a member of the
Compensation Committee.
(d) Immediately prior to the Effective Time, the Board of Directors of
Green shall take all actions necessary to cause William G. Petty to be elected
as Vice Chairman of the Board of Green.
5.19 Restructuring of Merger. Upon the mutual agreement of Whitecap and
Green expressed in an amendment of this Agreement approved by their respective
boards, the Merger may be restructured (i) in the form of a merger of Whitecap
into Green, with Green being the surviving corporation, or (ii) in the form of a
reverse triangular merger of a wholly owned subsidiary of Whitecap into Green,
with Green being the surviving corporation, or (iii) in the form of a merger of
Green into Whitecap, with Whitecap being the surviving corporation, or (iv) in
the form of a merger of both Whitecap and Green into a subsidiary of Whitecap or
Green, with such subsidiary being the surviving corporation. In any such event
this Agreement shall be deemed appropriately modified to reflect such form of
merger. If the Merger is restructured as specified in clause (ii) or clause
(iii) above, the provisions of Article II shall be modified to provide that
shares of Green Common Stock shall be converted into shares of Whitecap Common
Stock on a basis consistent with the Exchange Ratio.
5.20 Cross Option Agreement. Simultaneously with the execution of this
Agreement, each of Green, Merger Sub and Whitecap have executed and delivered
the Cross Option Agreement in the form attached hereto as Exhibit D (the "Cross
Option Agreement").
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) The Registration Statement shall have been declared effective, and
no stop order suspending the effectiveness of the Registration Statement
shall have been issued by the Commission or shall be
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continuing to be in effect, and no proceedings for that purpose shall have
been initiated or threatened by the Commission. All state securities laws
or "blue sky" permits and authorizations (or shall otherwise have available
an exemption from the requirements of such laws) necessary to issue the
Share Consideration and other securities of Green pursuant to the Merger
and the transactions contemplated hereby shall have been received.
(b) This Agreement and the Merger contemplated hereby and any other
action necessary to consummate the transactions contemplated hereby shall
have been approved and adopted by the requisite vote of (i) the holders of
the outstanding shares of the Whitecap Common Stock entitled to vote
thereon at the Whitecap Meeting and (ii) the holders of the outstanding
shares of Green Common Stock entitled to vote thereon at the Green Meeting.
(c) No governmental authority or other agency, commission or court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and has the effect
of making the Merger illegal or otherwise prohibiting consummation of the
transactions contemplated by this Agreement; provided, however, that, prior
to invoking this condition, each party hereto shall use all reasonable
efforts to have such statute, rule, regulation, injunction or order
vacated.
(d) Any waiting period applicable to the Merger under the HSR Act
shall have expired or been terminated without action by the Justice
Department or the Federal Trade Commission to prevent consummation of the
Merger.
(e) The shares of Green Common Stock issuable to Whitecap's
shareholders and option holders in the Merger or thereafter shall have been
authorized for listing on the NYSE, upon official notice of issuance.
(f) All material federal, state, local and foreign governmental
consents, approvals and filings required to permit the Merger and the
consummation of the transactions contemplated by this Agreement shall have
been received or made and any applicable waiting period shall have expired
or been terminated without the imposition of conditions that are or would
become applicable to Whitecap or the Whitecap Subsidiaries or Green or the
Green Subsidiaries and which would reasonably be anticipated to have a
Material Adverse Effect on the financial condition, results of operations,
properties, business or immediate prospects of Whitecap and the Whitecap
Subsidiaries, taken as a whole, or Green and the Green Subsidiaries, taken
as a whole.
(g) There shall not have been instituted or pending any action or
proceeding by or before any court or governmental authority or other
regulatory or administrative agency or commission, domestic or foreign, nor
shall there be any determination by any government, governmental authority,
regulatory or administrative agency or commission which, in either case,
would require either party to take any action or do anything in connection
with the foregoing which would compel Green to dispose of all or a material
portion of the business or assets of Green and the Green Subsidiaries,
taken as a whole, or Whitecap and the Whitecap Subsidiaries, taken as a
whole.
(h) Green and Whitecap shall have received a letter from each of Ernst
& Young LLP and KPMG Peat Marwick, dated as of the Effective Time, in form
and substance reasonably satisfactory to them, to the effect that the
Merger qualifies for "pooling of interests" treatment for financial
reporting purposes and that such accounting treatment is in accordance with
generally accepted accounting principles.
6.2 Conditions to the Obligation of Whitecap to Effect the Merger. The
obligation of Whitecap to effect the Merger shall be subject to the fulfillment
or waiver by Whitecap at or prior to the Effective Time of the following
additional conditions:
(a) Each of Green and Merger Sub shall have performed in all material
respects its obligations under this Agreement required to be performed by
it on or prior to the Effective Time pursuant to the terms hereof.
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(b) All representations or warranties of Green and Merger Sub in this
Agreement which are qualified with respect to a Material Adverse Effect on
Green or materiality shall be true and correct, and all such
representations or warranties that are not so qualified shall be true and
correct in all material respects, in each case as if such representation or
warranty was made as of the Effective Time, except to the extent that any
such representation or warranty is made as of a specified date, in which
case such representation or warranty shall have been true and correct as of
such specified date and, with respect to Section 3.3, to the extent it is
permitted to change by the provisions of this Agreement.
(c) From the date hereof through the Effective Time, there shall have
been no material adverse change (or development involving a prospective
change) in the financial condition, results of operations, properties,
business, or prospects of Green and the Green Subsidiaries taken as a
whole.
(d) Each of Green and Merger Sub shall have delivered a certificate of
its President or Vice President and its Chief Financial Officer certifying
the fulfillment (or waiver by Whitecap) of the conditions set forth in
clauses (a), (b), (c) and (e) of this Section 6.2 and, as to Green and
Merger Sub, the conditions set forth in Section 6.1.
(e) Green and Merger Sub shall have obtained all Third Party Consents
(applicable to Green, any Green Subsidiary or Merger Sub) contemplated by
subsection (ii) of Section 5.11, except for such Third Party Consents
which, if not obtained, would not, individually or in aggregate, reasonably
be anticipated to have a Material Adverse Effect on the financial
condition, results of operations, properties, business or prospects of
Green and the Green Subsidiaries, taken as a whole.
(f) Whitecap shall have received from Brobeck, Phleger & Harrison,
counsel to Green, an opinion or opinions dated as of the Effective Time
covering such matters as shall be reasonably agreed upon by Whitecap and
Green.
(g) Whitecap shall have received the opinion of Rogers & Hardin dated
as of the Effective Time, to the effect that (i) the Merger will be treated
for federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code, (ii) that each of Green, Merger Sub and
Whitecap will be a party to the reorganization within the meaning of
Section 368(b) of the Code and (iii) that no gain or loss will be
recognized by a shareholder of Whitecap as a result of the Merger with
respect to the Whitecap Shares converted solely into shares of the Green
Common Stock.
(h) Whitecap shall have received Shareholder Voting Agreements, in
substantially the form attached hereto as Exhibit E, from the persons set
forth on Schedule 6.2(h) of the Green Disclosure Schedules.
6.3 Conditions to the Obligations of Green and Merger Sub to Effect the
Merger. The obligations of Green and Merger Sub to effect the Merger shall be
subject to the fulfillment or waiver by Green at or prior to the Effective Time
of the following additional conditions:
(a) Whitecap shall have performed in all material respects each of its
obligations under this Agreement required to be performed by it on or prior
to the Effective Time pursuant to the terms hereof.
(b) All representations or warranties of Whitecap in this Agreement
which are qualified with respect to a Material Adverse Effect on Whitecap
or materiality shall be true and correct, and all such representations or
warranties that are not so qualified shall be true and correct in all
material respects, in each case as if such representation or warranty were
made as of the Effective Time except to the extent that any such
representation or warranty is made as of a specified date, in which case
such representation or warranty shall have been true and correct as of such
specified date and with respect to Section 4.3, to the extent permitted to
change by the provisions of this Agreement.
(c) Whitecap shall have obtained all Third Party Consents (applicable
to Whitecap or any Whitecap Subsidiary) contemplated by subsection (ii) of
Section 5.11, except for such Third Party Consents which, if not obtained,
would not individually or in aggregate, reasonably be anticipated to have a
Material Adverse Effect on the financial condition, results of operations,
properties, business or prospects of Whitecap and the Whitecap
Subsidiaries, taken as a whole.
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(d) From the date hereof through the Effective Time, there shall have
been no material adverse change (or development involving a prospective
change) in the financial condition, results of operations, properties,
business or prospects of Whitecap and the Whitecap Subsidiaries taken as a
whole.
(e) Whitecap shall have delivered a certificate of its President or
Vice President and its Chief Financial Officer certifying the fulfillment
(or waiver by Green) of the conditions set forth in clauses (a), (b), (c)
and (d) of this Section 6.3 and, as to Whitecap, of the conditions set
forth in Section 6.1.
(f) Merger Sub shall have received letters of resignation addressed to
Whitecap from the members of Whitecap's board of directors, which
resignations shall be effective as of the Effective Time.
(g) Green shall have received from Rogers & Hardin, counsel to
Whitecap, an opinion or opinions dated as of the Effective Time covering
such matters as shall be reasonably agreed upon by Green and Whitecap.
(h) Green shall have received the opinion of Brobeck, Phleger &
Harrison, dated as of the Effective Time, to the effect that (i) the Merger
will be treated for federal income tax purposes as a reorganization within
the meaning of Section 368(a) of the Code, (ii) that each of Green, Merger
Sub and Whitecap will be a party to the reorganization within the meaning
of Section 368(b) of the Code and (iii) no gain or loss will be recognized
by Whitecap, Green or Merger Sub as a result of the Merger.
(i) Green shall have received the Affiliate Letters from each of the
Rule 145 Affiliates, as provided in Section 5.14.
(j) Green shall have received Shareholder Voting Agreements, in
substantially the form attached hereto as Exhibit F, from persons holding
in the aggregate in excess of 25% of the outstanding Whitecap Common Stock.
ARTICLE VII
TERMINATION
7.1 Termination.
(a) Termination by Mutual Consent. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, before or after
the approval of this Agreement by the shareholders of Green or Whitecap, by the
mutual consent of Green and Whitecap.
(b) Termination by Either Whitecap or Green. This Agreement may be
terminated and the Merger may be abandoned by action of the Board of Directors
of either Whitecap or Green if (i) the Merger shall not have been consummated by
September 30, 1995, or (ii) the approval of Green's shareholders required by
Section 6.1(b) shall not have been obtained at the Green Meeting or at any
adjournment thereof, or (iii) the approval of Whitecap's shareholders required
by Section 6.1(b) shall not have been obtained at the Whitecap Meeting or at any
adjournment thereof, or (iv) a United States federal or state court of competent
jurisdiction or United States federal or state governmental, regulatory or
administrative agency or commission shall have issued an order, decree or ruling
or taken any other action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and non-appealable;
provided, that the party seeking to terminate this Agreement pursuant to this
clause (iv) must have used all reasonable efforts to remove such injunction,
order or decree; provided further, in the case of a termination pursuant to
clause (i) above, that the terminating party shall not have breached in any
material respect its obligations under this Agreement in any manner that
proximately caused the occurrence of the failure referred to in said clause.
(c) Termination by Green. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, before or after the
adoption and approval by the shareholders of Green referred to in Section 6.1(b)
by action of the Board of Directors of Green, if (i) a proposal for a Third
Party Transaction involving Green has been made or received and such Board
determines, in the exercise of its good faith judgment (based on the advice of
independent legal counsel) that such termination is required for such
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<PAGE> 36
Board to comply with its fiduciary duties to the Green shareholders, (ii) there
has been a breach by Whitecap of any representation or warranty contained in
this Agreement which would have or would be reasonably likely to have a Material
Adverse Effect on Whitecap, (iii) there has been a material breach of any of the
covenants or agreements set forth in this Agreement on the part of Whitecap,
which breach is not curable or, if curable is not cured within 15 days after
written notice of such breach is given by Green to Whitecap, (iv) following the
receipt of a proposal of a Third Party Transaction by Whitecap, the Board of
Directors of Whitecap shall have altered its determination to recommend that the
shareholders of Whitecap approve this Agreement and the transactions
contemplated hereby, (v) following the receipt of a proposal for a Third Party
Transaction by Whitecap, Whitecap shall have failed to proceed to hold the
Whitecap Meeting of its shareholders as contemplated by Section 5.1, provided
Green gives Whitecap 24 hours' prior written notice of its election to terminate
under this clause (v), (vi) the conditions to Green's obligation to effect the
Merger pursuant to Sections 6.1 and 6.3 hereof shall not have been satisfied by
Whitecap or waived by Green on or before September 30, 1995 or (vii) the Average
Closing Price of the Green Common Stock is less than $14.50 per share; provided,
however, that for purposes of this Section 7.1(c), Third Party Transaction shall
refer only to those transactions described in Sections 5.5(c)(i), (ii) and (iii)
of this Agreement. The "Average Closing Price" is the average of the last sales
prices of Green Common Stock on the NYSE, as reported by the NYSE Composite
Tape, for any twenty consecutive trading day period commencing after May 15,
1995 and terminating at least two business days prior to the Closing.
(d) Termination by Whitecap. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, before or after
the approval by the shareholders of Whitecap referred to in Section 6.1(b), by
action of the Board of Directors of Whitecap, if (i) a proposal for a Third
Party Transaction involving Whitecap has been made and such Board determines, in
the exercise of its good faith judgment (based on the advice of independent
legal counsel) that such termination is required for such Board to comply with
its fiduciary duties to the Whitecap shareholders, (ii) there has been a breach
by Green of any representation or warranty contained in this Agreement which
would have or would be reasonably likely to have a Material Adverse Effect on
Green, (iii) there has been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of Green, which breach is not
curable, or, if curable, is not cured within 15 days after written notice of
such breach is given by Whitecap to Green, (iv) following the receipt of a
proposal of a Third Party Transaction by Green, the Board of Directors of Green
shall have altered its determination to recommend that the shareholders of Green
approve this Agreement and the transactions contemplated hereby, (v) following
the receipt of a proposal for a Third Party Transaction by Green, Green shall
have failed to proceed to hold the Green Meeting as contemplated by Section 5.1,
provided Whitecap gives Green 24 hours' prior written notice of its election to
terminate under this clause (v), (vi) the conditions to Whitecap's obligation to
effect the Merger pursuant to Sections 6.1 and 6.2 hereof shall not have been
satisfied by Green or waived by Whitecap on or before September 30, 1995 or
(vii) the Average Closing Price of the Green Common Stock is less than $14.50
per share; provided, however, that for purposes of this Section 7.1(d), Third
Party Transaction shall refer only to those transactions described in Sections
5.5(c)(i), (ii) and (iii) of this Agreement.
(e) If the Agreement shall be terminated by Green or Whitecap pursuant to
clause (ii) of Section 7.1(b) (other than in circumstances in which Section
7.2(a) applies, then, within two business days of such termination, Green shall
pay Whitecap by wire transfer in immediately available funds a fee of $500,000.
(f) If the Agreement shall be terminated by Whitecap or Green pursuant to
clause (iii) of Section 7.1(b) (other than in circumstances in which Section
7.2(b) applies), then, within two business days of such termination, Whitecap
shall pay Green by wire transfer in immediately available funds a fee of
$500,000.
7.2 Effects of Termination.
(a) If (A) Green terminates this Agreement pursuant to clause (i) of
Section 7.1(c), (B) Whitecap terminates this Agreement pursuant to clause (iv)
or (v) of Section 7.1(d) following receipt by Green of a proposal for a Third
Party Transaction, or (C) either Whitecap or Green terminates this Agreement
pursuant
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to clause (i) or (ii) of Section 7.1(b) and prior to any Green Meeting a
proposal for a Third Party Transaction was received by Green and such Third
Party Transaction (or any revised transaction based upon such proposal for a
Third Party Transaction) is consummated (including, in the case of a tender
offer, acceptance of shares upon the expiration of the tender offer) one year,
then, within two business days of such termination in the case of clauses (A)
and (B) or within two business days of such consummation in the case of clause
(C), Green (or the successor thereto) shall pay Whitecap by wire transfer in
immediately available funds a fee of $4.0 million; provided, however, that for
purposes of this Section 7.2(a), Third Party Transaction shall refer only to
those transactions described in Section 5.5(c)(i), (ii) and (iii) of this
Agreement.
(b) If (A) Whitecap terminates this Agreement pursuant to clause (i) of
Section 7.1(d), (B) Green terminates this Agreement pursuant to clause (iv) or
(v) of Section 7.1(c) following receipt by Whitecap of a proposal for a Third
Party Transaction, or (C) either Green or Whitecap terminates this Agreement
pursuant to clause (i) or (iii) of Section 7.1(b) provided that prior to any
Whitecap Meeting a proposal for a Third Party Transaction was received by
Whitecap and such Third Party Transaction (or any revised transaction based upon
such proposal for a Third Party Transaction) is consummated (including, in the
case of a tender offer, acceptance of shares upon the expiration of the tender
offer) one year, then, within two business days of such termination in the case
of clauses (A) and (B) or within two business days of such consummation in the
case of clause (C), Whitecap (or the successor thereto) shall pay Green by wire
transfer in immediately available funds a fee of $4.0 million; provided,
however, that for purposes of this Section 7.2(b), Third Party Transaction shall
refer only to those transactions described in Section 5.5(c)(i), (ii) and (iii)
of this Agreement.
(c) Except as provided in this Section 7.2 or Section 8.4, in the event of
the termination of this Agreement pursuant to Section 7.1, this Agreement shall
be void, there shall be no liability on the part of the parties or any of their
respective officers or directors to the other and all rights and obligations of
any party hereto shall cease; provided, however, that nothing herein shall
relieve any party from liability for the wilful breach of any of its
representations, warranties, covenants or agreements set forth in this
Agreement, or from any obligation under the Confidentiality Agreements;
provided, however, if either party has received the $4.0 million fee
contemplated by Section 7.2(a) or (b), the party receiving such fee shall not
assert or pursue in any manner, directly or indirectly, any claim or cause of
action (other than pursuant to the Cross Option Agreement) against the party
paying such fee or any of its officers or directors based in whole or in part
upon its or their receipt, consideration, recommendation or approval of a
proposal for a Third Party Transaction or the exercise of the right of the party
paying such fee to terminate this Agreement under clause (i) of Section 7.1(c)
or clause (i) of Section 7.1(d), as the case may be.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendment. Subject to the applicable provisions of state law, this
Agreement may be amended by the parties hereto solely by action taken by their
respective Boards of Directors at any time prior to the Effective Time. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
8.2 Waiver. At any time prior to the Effective Time, the parties hereto,
by action taken by their respective Boards of Directors, may (i) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties of the
other party contained herein or in any documents delivered pursuant hereto, and
(iii) waive compliance by the other party with any of the agreements or
conditions herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. No waiver by either party of any default with
respect to any provision, condition or requirement hereof shall be deemed to be
a waiver of any other provision, condition or requirement hereof; nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereunder.
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<PAGE> 38
8.3 Survival. All representations, warranties and agreements contained in
this Agreement or in any instrument delivered pursuant to this Agreement shall
terminate and be extinguished at the Effective Time or the earlier date of
termination of this Agreement pursuant to Section 7.1, as the case may be,
except that the agreements set forth in Article I and Article II and in Sections
5.6, 5.7, 5.9, 5.10, 8.4 and 8.7 will survive the Effective Time indefinitely
and those set forth in Sections 7.2 and 8.7 will survive the termination of this
Agreement indefinitely, and other than any covenant the breach of which has
resulted in the termination of this Agreement.
8.4 Expenses and Fees. Subject to Section 7.2, whether or not the Merger
is consummated, all costs and expenses incurred by the parties hereto in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses except as expressly provided herein
and except that (i) the filing fee in connection with the HSR Act filing, (ii)
the filing fee in connection with the filing of the Registration Statement or
Proxy Statement with the Commission and (iii) the expenses incurred in
connection with printing and mailing the Registration Statement and the Proxy
Statement, shall be shared equally by Green and Whitecap.
8.5 Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been given or made if in
writing and delivered personally or sent by registered or certified mail
(postage prepaid, return receipt requested) or by telecopier to the parties at
the following addresses:
If to Merger Sub or Green:
Green
One Ravinia Drive, Suite 1500
Atlanta, Georgia 30346
Attention: Everett W. Benton
Telecopier: (404) 393-8054
With copies to:
Brobeck, Phleger & Harrison
Suite 2300
550 South Hope Street
Los Angeles, California 90071
Attention: Mitchell L. Edwards, Esq.
Telecopier: (213) 239-1324
If to Whitecap:
Whitecap
184 Shuman Boulevard, Suite 200
Naperville, Illinois 60563
Attention: William G. Petty, Jr.
Telecopier: (708) 357-4020
With copies to:
Rogers & Hardin
2700 Cain Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Alan C. Leet, Esq.
Telecopier: (404) 525-2224
or at such other addresses as shall be furnished by the parties by like notice,
and such notice or communication shall be deemed to have been given or made as
of the date so delivered or mailed or sent by telecopier.
8.6 Headings. The headings contained in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
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<PAGE> 39
8.7 Public Announcements. Whitecap and Green shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement or the Transactions and shall not issue any such press
release or make any such public statement without the prior consent of the other
party, which shall not be unreasonably withheld; provided, however, that a party
may, without the prior consent of the other party, issue such press release or
make such public statement as may be required by law or any listing agreement
with a national securities exchange to which Whitecap or Green is a party if it
has used reasonable efforts to consult with the other party and to obtain such
party's consent but has been unable to do so in a timely manner.
8.8 Entire Agreement. This Agreement and the other agreements referred to
herein constitute the entire agreement among the parties and supersede all other
prior agreements and understandings, both written and oral, among the parties,
or any of them, with respect to the subject matter hereof.
8.9 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefits of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any of
the rights, interests or obligations shall be assigned by any of the parties
hereto without the prior written consent of the other parties. Except as set
forth in Section 5.9 hereof, this Agreement is not intended to confer upon any
other person any rights or remedies hereunder.
8.10 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
8.11 Invalidity; Severability. In the event that any provision of this
Agreement shall be deemed contrary to law or invalid or unenforceable in any
respect by a court of competent jurisdiction, the remaining provisions shall
remain in full force and effect to the extent that such provisions can still
reasonably be given effect in accordance with the intentions of the parties, and
the invalid and unenforceable provisions shall be deemed, without further action
on the part of the parties, modified, amended and limited solely to the extent
necessary to render the same valid and enforceable.
8.12 Governing Law. The validity and interpretation of this Agreement
shall be governed by the laws of the State of California, without reference to
the conflict of laws principles thereof.
IN WITNESS WHEREOF, GranCare, Merger Sub and Evergreen have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
<TABLE>
<S> <C>
EVERGREEN HEALTHCARE, INC. GRANCARE, INC.
By: By:
---------------------------- ----------------------------
Name: Name:
Title: Title:
GW ACQUISITION CORP.
By:
----------------------------
Name:
Title
</TABLE>
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<PAGE> 1
EXHIBIT B
CROSS OPTION AGREEMENT
This Cross Option Agreement (the "Agreement") is entered into May 2, 1995,
by and among Green, a California corporation ("Green"), GW Acquisition Corp., a
California corporation and a wholly-owned subsidiary of Green ("Merger Sub") and
Evergreen Healthcare, Inc., a Georgia corporation ("Whitecap").
RECITALS
WHEREAS, concurrently with the execution of this Agreement, Green, Merger
Sub and Whitecap are entering into an Agreement and Plan of Merger of even date
herewith (the "Merger Agreement") (capitalized terms used but not defined herein
shall have the same meaning assigned to such terms in the Merger Agreement),
pursuant to which Green proposes to acquire Whitecap by means of a merger (the
"Merger") of Merger Sub with and into Whitecap in which (a) each issued and
outstanding share of common stock, $.01 par value, of Whitecap (the "Whitecap
Common Stock"), other than shares of Whitecap Common Stock that are owned by
Whitecap as treasury stock, shall automatically be converted into the right to
receive .775 shares (the "Exchange Ratio") of the common stock, no par value, of
Green; (b) the issued and outstanding shares of the common stock, no par value,
of Merger Sub shall be converted into one hundred (100) shares of fully paid and
nonassessable shares of common stock, no par value, of the Surviving
Corporation; and (c) each outstanding option to purchase Whitecap Common Stock
shall be assumed by Green as provided in Section 5.7 of the Merger Agreement;
and
WHEREAS, as a condition to the willingness of the parties to enter into the
Merger Agreement and incur expenses and expend time and effort in connection
with the Merger Agreement and transactions contemplated thereby, Green and
Merger Sub have required that Whitecap agree, and Whitecap has agreed, among
other things, to grant to Green an option to purchase 19.9% of the outstanding
shares of Whitecap Common Stock immediately prior to the exercise of such
option, and Whitecap has required that Green agree, and Green has agreed, among
other things, to grant to Whitecap an option to purchase 19.9% of the
outstanding shares of Green Common Stock immediately prior to the exercise of
such option in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
ARTICLE I
THE WHITECAP STOCK OPTION
1.1 Grant of Whitecap Stock Option. Whitecap hereby grants to Green an
irrevocable option (the "Whitecap Stock Option") to purchase newly issued shares
of Whitecap Common Stock in an amount equal to 19.9% of the outstanding Whitecap
Common Stock immediately prior to the exercise of the Whitecap Stock Option (the
"Whitecap Option Shares") at a purchase price of $13 1/8 per Whitecap Option
Share (the "Whitecap Stock Purchase Price"). The Whitecap Common Stock Purchase
Price shall equal the last sales price per share of the Whitecap Common Stock on
the date hereof, as such price is reported on the New York Stock Exchange
composite tape ("NYSE").
1.2 Exercise of Whitecap Stock Option.
(a) The Whitecap Stock Option may be exercised by Green, in whole but not
in part, at any time or from time to time after the Merger Agreement becomes
terminable or is terminated by Green or Whitecap under circumstances which could
entitle Green to termination fees under Section 7.2(b) of the Merger Agreement
(regardless of whether the Merger Agreement is actually terminated or whether
there occurs a closing of any Third Party Transaction), any such event by which
the Merger Agreement becomes terminable or is terminated being referred to
herein as a "Green Triggering Event." In the event Green wishes to exercise
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<PAGE> 2
the Whitecap Stock Option, Green shall deliver to Whitecap a written notice (a
"Green Exercise Notice") notifying Whitecap of its exercise of the Whitecap
Stock Option. The closing of such exercise of the Whitecap Stock Option (the
"Whitecap Option Closing") shall occur at a place, and on a date and at a time
designated by Green in the Green Exercise Notice delivered at least two days
prior to the date of the Whitecap Option Closing. The Whitecap Stock Option
shall terminate upon the earlier of: (i) the Effective Time; (ii) the
termination of the Merger Agreement in accordance with its terms (other than
upon or during the continuance of a Green Triggering Event) or (iii) 365 days
following any termination of the Merger Agreement upon or during the
continuation of a Green Triggering Event (or, if, at the expiration of such 365
day period the Whitecap Stock Option cannot be exercised by reason of any
applicable judgment, decree, order, law or regulation, ten business days after
such impediment to exercise shall have been removed or shall have become final
and not subject to appeal, but in no event under this clause (iii) later than
September 30, 1996). Notwithstanding the foregoing, the Whitecap Stock Option
may not be exercised if Green is in material breach of any of its material
representations or warranties, or a material breach of any of its covenants or
agreements, contained in this Agreement or in the Merger Agreement.
(b) Upon receipt of a Green Exercise Notice, Whitecap shall be obligated to
deliver to Green a certificate or certificates evidencing the Whitecap Option
Shares, in accordance with the terms of this Agreement, on the later of (i) the
date specified in the Green Exercise Notice or (ii) the first business day on
which the conditions specified in Section 1.3 shall be satisfied.
1.3 Conditions to Delivery of the Whitecap Option Shares. The obligation
of Whitecap to deliver the Whitecap Option Shares upon any exercise of the
Whitecap Stock Option is subject to the following conditions:
(a) Such delivery would not in any material respect violate, or
otherwise cause the material violation of, any material law, including,
without limitation,the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR Act")
applicable to such exercise of the Whitecap Stock Option and the delivery
of the Whitecap Option Shares; and
(b) There shall be no preliminary or permanent injunction or other
order by any court of competent jurisdiction preventing or prohibiting such
exercise of the Whitecap Stock Option or the delivery of the Whitecap
Option Shares in respect of such exercise.
1.4 Closings. At the Closing, Whitecap will deliver to Green a certificate
or certificates evidencing the Whitecap Option Shares in the denominations
specified in the Green Exercise Notice, and Green will purchase such Whitecap
Option Shares from Whitecap at the Whitecap Stock Purchase Price. All payments
made by Green to Whitecap pursuant to this Section 1.4 shall be made, at the
option of Green, either by wire transfer of immediately available funds in the
amount of the Whitecap Stock Purchase Price for the Whitecap Option Shares, or
by delivery to Whitecap of a certified or bank check or checks payable to or on
the order of Whitecap in an amount equal to the Whitecap Stock Purchase Price.
1.5 Adjustments Upon Share Issuances, Changes in Capitalization, etc. In
the event of any change in Whitecap Common Stock or in the number of outstanding
shares of Whitecap Common Stock by reason of a stock dividend, split-up,
recapitalization, combination, exchange of shares or similar transaction or any
other change in the corporate or capital structure of Whitecap (including,
without limitation, the declaration or payment of an extraordinary dividend or
cash, securities or other property), the type and number of shares or securities
to be issued by Whitecap upon exercise of the Whitecap Stock Option shall be
adjusted appropriately, and proper provision shall be made in the agreements
governing such transaction, so that Green shall receive upon exercise of the
Whitecap Stock Option the number, and class of shares and voting power
represented thereby or other securities or property that Green would have
received in respect of Whitecap Common Stock if the Whitecap Stock Option had
been exercised immediately prior to such event, or the record date therefor, as
applicable, and elected to the fullest extent it would have been permitted to
elect, to receive such securities, cash or other property.
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<PAGE> 3
ARTICLE II
THE GREEN STOCK OPTION
2.1 Grant of Green Stock Option. Green hereby grants to Whitecap an
irrevocable option (the "Green Stock Option") to purchase newly issued Shares of
Green Common Stock in an amount equal to 19.9% of the outstanding Green Common
Stock immediately prior to the exercise of the Green Stock Option (the "Green
Option Shares") at a purchase price of $16 5/8 per Green Option Share (the
"Green Stock Purchase Price"). The Green Stock Purchase Price shall equal the
last sales price per share of the Green Common Stock on the date hereof, as such
price is reported on the NYSE composite tape.
2.2 Exercise of Green Stock Option.
(a) The Green Stock Option may be exercised by Whitecap, in whole but not
in part, at any time or from time to time after the Merger Agreement becomes
terminable or is terminated by Whitecap or Green under circumstances which could
entitle Whitecap to termination fees under Section 7.2(a) of the Merger
Agreement (regardless of whether the Merger Agreement is actually terminated or
whether there occurs a closing of any Third Party Transaction), any such event
by which the Merger Agreement becomes terminable or is terminated being referred
to herein as a "Whitecap Triggering Event." In the event Whitecap wishes to
exercise the Green Stock Option, Whitecap shall deliver to Green a written
notice (a "Whitecap Exercise Note") notifying Green of its exercise of the Green
Stock Option. The closing of such exercise of the Green Stock Option (the "Green
Option Closing") shall occur at a place, and on a date and at a time designated
by Whitecap in the Whitecap Exercise Notice delivered at least two days prior to
the date of the Green Option Closing. The Green Stock Option shall terminate
upon the earlier of: (i) the Effective Time; (ii) the termination of the Merger
Agreement in accordance with its terms (other than upon or during the
continuance of a Whitecap Triggering Event) or (iii) 365 days following any
termination of the Merger Agreement upon or during the continuation of a
Whitecap Triggering Event (or, if, at the expiration of such 365 day period the
Green Stock Option cannot be exercised by reason of any applicable judgment,
decree, order, law or regulation, ten business days after such impediment to
exercise shall have been removed or shall have become final and not subject to
appeal, but in no event under this clause (iii) later than September 30, 1996).
Notwithstanding the foregoing, the Green Stock Option may not be exercised if
Whitecap is in material breach of any of its material representations or
warranties, or a material breach of any of its covenants or agreements,
contained in this Agreement or in the Merger Agreement.
(b) Upon receipt of a Whitecap Exercise Notice, Green shall be obligated to
deliver to Whitecap a certificate or certificates evidencing the Green Option
Shares, in accordance with the terms of this Agreement, on the later of (i) the
date specified in the Whitecap Exercise Notice or (ii) the first business day on
which the conditions specified in Section 2.3 shall be satisfied.
2.3 Conditions to Delivery of the Green Option Shares. The obligation of
Green to deliver the Green Option Shares upon any exercise of the Green Stock
Option is subject to the following conditions:
(a) Such delivery would not in any material respect violate, or
otherwise cause the material violation of, any material law, including,
without limitation,the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR Act")
applicable to such exercise of the Green Stock Option and the delivery of
the Green Option Shares; and
(b) There shall be no preliminary or permanent injunction or other
order by any court of competent jurisdiction preventing or prohibiting such
exercise of the Green Stock Option or the delivery of the Green Option
Shares in respect of such exercise.
2.4 Closings. At the Closing, Green will deliver to Whitecap a certificate
or certificates evidencing the Green Option Shares in the denominations
specified in the Whitecap Exercise Notice, and Whitecap will purchase such Green
Option Shares from Green at the Green Stock Purchase Price. All payments made by
Whitecap to Green pursuant to this Section 2.4 shall be made, at the option of
Whitecap, either by wire transfer of immediately available funds in the amount
of the Green Stock Purchase Price for the Green Option
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Shares, or by delivery to Green of a certified or bank check or checks payable
to or on the order of Green in an amount equal to the Green Stock Purchase
Price.
2.5 Adjustments Upon Share Issuances, Changes in Capitalization, etc. In
the event of any change in Green Common Stock or in the number of outstanding
shares of Green Common Stock by reason of a stock dividend, split-up,
recapitalization, combination, exchange of shares or similar transaction or any
other change in the corporate or capital structure of Green (including, without
limitation, the declaration or payment of an extraordinary dividend or cash,
securities or other property), the type and number of shares or securities to be
issued by Green upon exercise of the Green Stock Option shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction, so that Whitecap shall receive upon exercise of the Green
Stock Option the number, class of shares and voting power represented thereby or
other securities or property that Green would have received in respect of Green
Common Stock if the Green Stock Option had been exercised immediately prior to
such event, or the record date therefor, as applicable, and elected to the
fullest extent it would have been permitted to elect, to receive such
securities, cash or other property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF WHITECAP
Whitecap hereby represents and warrants to each of Green and Merger Sub as
follows:
3.1 Authority Relative to This Agreement. Whitecap has all necessary power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Whitecap and the consummation by Whitecap of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of Whitecap, and no other corporate proceedings on the
part of Whitecap are necessary to authorize this Agreement or to consummate such
transactions. This Agreement has been duly and validly executed and delivered by
Whitecap and, assuming the due authorization, execution and delivery by each of
Green and Merger Sub, constitutes a legal, valid and binding obligation of
Whitecap, enforceable against Whitecap in accordance with its terms.
3.2 Authority to Issue Shares. Whitecap has taken all necessary corporate
action to authorize and reserve and permit it to issue, and at all times from
the date hereof until the Whitecap Stock Option shall no longer be exercisable,
shall have reserved, all the Whitecap Option Shares issuable pursuant to this
Agreement, and Whitecap will take all necessary corporate action to authorize
and reserve and permit it to issue all additional shares of Whitecap Common
Stock or other securities which may be issued pursuant to Section 1.5, all of
which, upon their issuance and delivery in accordance with the terms of this
Agreement, shall be duly authorized, validly issued, fully paid and
nonassessable, shall be delivered free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on Green's and Merger Sub's voting rights, charges and other
encumbrances of any nature whatsoever (other than this Agreement) and shall not
be subject to any preemptive rights.
3.3 Consents, No Conflict. The execution and delivery of this Agreement by
Whitecap does not, and the performance of this Agreement by Whitecap will not,
(i) require any consent, approval, authorization or permit of, or filing with or
notification to (other than pursuant to the HSR Act) any governmental or
regulatory authority, (ii) conflict with or violate the Articles of
Incorporation or Bylaws of Whitecap or, (iii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Whitecap or by which
any property or asset of Whitecap or any Whitecap Subsidiary or by which any
property or asset of Whitecap or any Whitecap Subsidiary is bound or affected,
or (iv) result in any breach of or constitute a default (or any event which with
notice or lapse of time or both would become a default) under, or give to others
any right of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or other encumbrance of any nature whatsoever on any
property or asset of Whitecap or any Whitecap Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Whitecap or any Whitecap
Subsidiary or any property or asset of Whitecap or any Whitecap subsidiary is
bound or affected.
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ARTICLE IV
COVENANTS OF WHITECAP
Whitecap hereby covenants and agrees as follows:
4.1 Listing; Other Action. (a) Whitecap shall, at its expense, use
reasonable best efforts to cause the Whitecap Option Shares to be approved for
listing on the NYSE, subject to notice of issuance, as promptly as practicable
following the date the Whitecap Stock Option first becomes exercisable pursuant
to Section 1.2 hereof, and will provide prompt notice to the NYSE of the
issuance of each Whitecap Option Share.
(b) Whitecap shall use its reasonable best efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereunder,
including, without limitation, using its reasonable best efforts to obtain all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental entities. Without limiting the generality of the
foregoing, Whitecap shall, when required in order to effect the transactions
contemplated hereunder, make all filings and submissions under the HSR Act as
promptly as practicable.
4.2 Registration. Upon the request of Green at any time and from time to
time within three (3) years of the Whitecap Option Closing, Whitecap agrees (i)
to effect, as promptly as practicable, up to three registrations under the
Securities Act of 1933, as amended (the "Securities Act"), covering any part or
all (as may be requested by Green) of the securities that have been acquired by
or are issuable to Green upon exercise of the Whitecap Stock Option, and to use
its best efforts to qualify such Whitecap Option Shares or other securities
under any applicable state securities laws and (ii) to include any part or all
of the Whitecap Option Shares or such other securities in any registration
statement for common stock filed by Whitecap under the Securities Act in which
such inclusion is permitted under applicable rules and regulations and to use
its best efforts to keep each such registration described in clauses (i) and
(ii) effective for a period of not less than six (6) months. If the managing
underwriter of a proposed offering of securities by Whitecap shall advise
Whitecap in writing that, in the reasonable opinion of the managing underwriter,
the distribution of the Whitecap Option Shares requested by Green to be included
in a registration statement concurrently with securities being registered for
sale by Whitecap would adversely affect the distribution of such securities by
Whitecap, then Whitecap shall either (i) include such Whitecap Option Shares in
the registration statement, but Green shall agree to delay the offering and sale
for such period of time as the managing underwriter may reasonably request
(provided that Green may at any time withdraw its request to include the
Whitecap Option Shares in such offering) or (ii) include such portion of the
Whitecap Option Shares in the registration statement as the managing underwriter
advises may be included for sale simultaneously with sales by Whitecap. The
registrations effected under this Section 4.2 shall be effected at Whitecap's
expense except for underwriting commissions allocable to the Whitecap Option
Shares and the fees and disbursements of Green's counsel. Whitecap shall
indemnify and hold harmless Green, its affiliates and controlling persons and
their respective officers, directors, agents and representatives from and
against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, all out-of-pocket expenses, investigation
expenses, expenses incurred with respect to any judgment and fees and
disbursements of counsel and accountants) arising out of or based upon any
statements contained in, or omissions or alleged omissions from, each
registration statement (and related prospectus) filed pursuant to this Section
4.2; provided, however, that Whitecap shall not be liable in any such case to
Green or any affiliate or controlling person of Green or any of their respective
officers, directors, agents or representatives to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or omission or alleged
omission made in such registration statement or prospectus in reliance upon, and
in conformity with, written information furnished to Whitecap with respect to
Green, specifically for use in the preparation thereof by Green.
4.3 Distribution. Whitecap shall acquire the Green Option Shares for
investment purposes only and not with a view to any distribution thereof in
violation of the Securities Act, and shall not sell any Green Option Shares
purchased pursuant to this Agreement except in compliance with the Securities
Act.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF GREEN AND MERGER SUB
Each of Green and Merger Sub hereby represents and warrants to Whitecap as
follows:
5.1 Authority Relative to this Agreement. Each of Green and Merger Sub has
full legal right, power and authority to enter into and perform all of its
obligations under this Agreement. The execution and delivery of this Agreement
by Green and Merger Sub will not violate any other agreement to which Green or
Merger Sub is a party. This Agreement has been duly and validly executed and
delivered by each of Green and Merger Sub and,assuming the due authorization,
execution and delivery by Whitecap, constitutes a legal, valid and binding
agreement of Green and Merger Sub, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in effect,
affecting creditors' rights and remedies generally or general principles of
equity.
5.2 Authority to Issue Shares. Green has taken all necessary corporate
action to authorize and reserve and permit it to issue, and at all times from
the date hereof until the Green Stock option shall no longer be exercisable,
shall have reserved, all the Green Option Shares issuable pursuant to this
Agreement, and Green will take all necessary corporate action to authorize and
reserve and permit it to issue all additional shares of Green Common Stock or
other securities which may be issued pursuant to Section 2.5 all of which, upon
their issuance and delivery in accordance with the terms of this Agreement,
shall be duly authorized, validly issued, fully paid and nonassessable, shall be
delivered free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on Whitecap's voting
rights, charges and other encumbrances of any nature whatsoever (other than this
Agreement) and shall not be subject to any preemptive rights.
5.3 Consents, No Conflict. The execution and delivery of this Agreement by
Green and Merger Sub does not, and the performance of this Agreement by Green
and Merger Sub will not, (i) require any consent, approval, authorization or
permit of, or filing with or notification to (other than pursuant to the HSR
Act) any governmental or regulatory authority, (ii) conflict with or violate the
Articles of Incorporation or Bylaws of Green or Merger Sub or, (iii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to Green or Merger Sub or by which any property or asset of Green or Merger Sub
or any Green Subsidiary or by which any property or asset of Green or Merger Sub
or any Green Subsidiary is bound or affected, or (iv) result in any breach of or
constitute a default (or any event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance of any nature whatsoever on any property or asset of Green
or Merger Sub or any Green Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Green or any Green Subsidiary or any property
or asset of Green or any Green subsidiary is bound or affected.
ARTICLE VI
COVENANT OF GREEN
Green hereby covenants and agrees as follows:
6.1 Listing; Other Action. (a) Green shall, at its expense, use reasonable
best efforts to cause the Green Option Shares to be approved for listing on the
NYSE, subject to notice of issuance, as promptly as practicable following the
date the Green Stock Option first becomes exercisable pursuant to Section 2.2
hereof, and will provide prompt notice to the NYSE of the issuance of each Green
Option Share.
(b) Green shall use its reasonable best efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereunder,
including, without limitation, using its reasonable best efforts to obtain all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental entities. Without limiting the generality of the
foregoing, Green shall, when required in
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order to effect the transactions contemplated hereunder, make all filings and
submissions under the HSR Act as promptly as practicable.
6.2 Registration. Upon the request of Whitecap at any time and from time
to time within three (3) years of the Green Option Closing, Green agrees (i) to
effect, as promptly as practicable, up to three registrations under the
Securities Act of 1933, as amended (the "Securities Act"), covering any part or
all (as may be requested by Whitecap) of the securities that have been acquired
by or are issuable to Whitecap upon exercise of the Green Stock Option, and to
use its best efforts to qualify such Green Option Shares or other securities
under any applicable state securities laws and (ii) to include any part or all
of the Green Option Shares or such other securities in any registration
statement for common stock filed by Green under the Securities Act in which such
inclusion is permitted under applicable rules and regulations and to use its
best efforts to keep each such registration described in clauses (i) and (ii)
effective for a period of not less than six (6) months. If the managing
underwriter of a proposed offering of securities by Green shall advise Green in
writing that, in the reasonable opinion of the managing underwriter, the
distribution of the Green Option Shares requested by Whitecap to be included in
a registration statement concurrently with securities being registered for sale
by Green would adversely affect the distribution of such securities by Green,
then Green shall either (i) include such Green Option Shares in the registration
statement, but Whitecap shall agree to delay the offering and sale for such
period of time as the managing underwriter may reasonably request (provided that
Whitecap may at any time withdraw its request to include the Green Option Shares
in such offering) or (ii) include such portion of the Green Option Shares in the
registration statement as the managing underwriter advises may be included for
sale simultaneously with sales by Green. The registrations effected under this
Section 6.2 shall be effected at Green's expense except for underwriting
commissions allocable to the Green Option Shares and the fees and disbursements
of Whitecap's counsel. Green shall indemnify and hold harmless Whitecap, its
affiliates and controlling persons and their respective officers, directors,
agents and representatives from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, all out-of-pocket
expenses, investigation expenses, expenses incurred with respect to any judgment
and fees and disbursements of counsel and accountants) arising out of or based
upon any statements contained in, or omissions or alleged omissions from, each
registration statement (and related prospectus) filed pursuant to this Section
6.2; provided, however, that Green shall not be liable in any such case to
Whitecap or any affiliate or controlling person of Whitecap or any of their
respective officers, directors, agents or representatives to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or omission or
alleged omission made in such registration statement or prospectus in reliance
upon, and in conformity with, written information furnished to Green with
respect to Whitecap, specifically for use in the preparation thereof by
Whitecap.
6.3 Distribution. Green shall acquire the Whitecap Option Shares for
investment purposes only and not with a view to any distribution thereof in
violation of the Securities Act, and shall not sell any Whitecap Option Shares
purchased pursuant to this Agreement except in compliance with the Securities
Act.
ARTICLE VII
MISCELLANEOUS
7.1 Expenses. Except as provided in Section 7.11, each party hereto will
pay all of its expenses in connection with the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of its counsel
and other advisors.
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7.2 Notices. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall be
deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
If to Green or Merger Sub:
300 Corporate Pointe, Suite 400
Culver City, California 90230
Attn: Evrett W. Benton
Telecopier: (310) 645-1609
With copies to:
Brobeck, Phleger & Harrison
550 South Hope Street
Los Angeles, California 90071-2604
Attn: Mitchell L. Edwards, Esq.
Telecopier: (213) 239-1324
If to Whitecap:
184 Shuman Boulevard, Suite 200
Naperville, Illinois 60563
Attn: Mr. William G. Petty
With copies to:
Rogers & Hardin
2700 Cain Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attn: Alan C. Leet, Esq.
Telecopier: (404) 525-2224
7.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
7.4 Assignment. This Agreement shall not be assigned by operation of law
or otherwise.
7.5 Governing Law. This Agreement, and all matters relating hereto, shall
be governed by, and construed in accordance with the laws of the State of
California without giving effect to the principles of the laws thereof.
7.6 Injunctive Relief. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of any
provision of this Agreement, the aggrieved party may elect to institute and
prosecute proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach of such provision, as well as to
obtain damages for breach of this Agreement. By seeking or obtaining such
relief, the aggrieved party will not be precluded from seeking or obtaining any
other relief to which it may be entitled.
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
7.8 Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If
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any provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
7.9 Further Assurances. Each party hereto will execute and deliver all
such further documents and instruments and take all such further action as may
be necessary in order to consummate the transactions contemplated by this
Agreement.
7.10 Third Party Beneficiaries. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto any
legal or equitable right, remedy or claim under or by reason of this Agreement
or any provision contained herein.
7.11 Legal Expenses. In the event any legal proceeding is commenced by any
party to this Agreement to enforce or recover damages for any breach of the
provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorney's fees.
7.12 Amendment and Modification. This Agreement may be amended, modified
and supplemented only by a written document executed by Green, Merger Sub and
Whitecap.
IN WITNESS WHEREOF, Green, Merger Sub and Whitecap have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
GRANCARE, INC.
By:
---------------------------------
Name:
Title:
GW ACQUISITION CORP.
By:
---------------------------------
Name:
Title:
EVERGREEN HEALTHCARE, INC.
By:
---------------------------------
Name:
Title:
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EXHIBIT C
ARTICLES OF INCORPORATION
OF
GW ACQUISITION CORP.
I.
The name of the corporation is GW Acquisition Corp. (the "Corporation").
II.
The Corporation shall have authority to issue one thousand (1,000) shares
of common stock, which common stock shall have unlimited voting rights and shall
receive the net assets of the Corporation upon dissolution.
III.
The address of the initial registered office of the Corporation shall be
One Ravinia Drive, Suite 1500, Atlanta, DeKalb County, Georgia 30346. The
initial registered agent of the Corporation at such address shall be M. Henry
Day, Jr.
IV.
The address of the initial principal office of the Corporation shall be One
Ravinia Drive, Suite 1500, Atlanta, DeKalb County, Georgia 30346.
V.
The name and address of the incorporator is:
M. Henry Day, Jr., Esq.
One Ravinia Drive
Suite 1500
Atlanta, Georgia 30346
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VI.
The initial Board of Directors of the Corporation shall consist of three
(3) members, whose names and addresses are as follows:
M. Scott Athans
One Ravinia Drive
Suite 1500
Atlanta, Georgia 30346
Evrett W. Benton
One Ravinia Drive
Suite 1500
Atlanta, Georgia 30346
Jerry A. Schneider
One Ravinia Drive
Suite 1500
Atlanta, Georgia 30346
IN WITNESS WHEREOF, the undersigned incorporator executes these Articles of
Incorporation this day of May, 1995.
---------------------------
M. Henry Day, Jr.
Incorporator
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<PAGE> 1
EXHIBIT D
BYLAWS
OF
GW ACQUISITION CORP.
ARTICLE I
SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the shareholders for the
election of directors and for the transaction of such other business as may
properly come before the meeting shall be held at such place, either within or
without the State of Georgia, on such date and at such time as the President or
the Board of Directors by resolution may provide. The Board of Directors may
specify by resolution prior to any special meeting of shareholders held within
the year that such meeting shall be in lieu of the annual meeting.
SECTION 2. Special Meeting. Special meetings of the shareholders may be
called at any time by the Board of Directors, by the President, or by the
holders of at least twenty-five percent (25%) of the outstanding common stock of
the Corporation if such holders sign, date, and deliver to the Secretary one or
more written demands for the meeting describing the purpose of purposes for
which it is to be held. Such written request shall specify the time and purpose
of the proposed meeting. Such meetings shall be held either within or without
the State of Georgia at the place stated in the notice of the meeting.
SECTION 3. Notice of Meetings. Written notice of each meeting of
shareholders, stating the date, time, and place of the meeting, and the purpose
or purposes of any special meeting, shall be mailed to each shareholder entitled
to vote at such meeting at his address shown on the books of the Corporation not
less than ten (10) nor more than sixty (60) days prior to such meeting unless
such shareholder waives notice of the meeting. A shareholder shall have waived
notice of a meeting if he or she: (1) executes a waiver of notice, in person or
by proxy, either before or after the meeting, or (2) attends the meeting in
person or by proxy and does not object at the beginning of the meeting to the
holding of the meeting or the transacting of business at the meeting. Neither
the business transacted at, nor the purpose of, any meeting need be stated in
the waiver of notice of such meeting, except that, with respect to a waiver of
notice of a meeting at which is considered an amendment to the Articles of
Incorporation, a plan of merger or share exchange, a sale of all or
substantially all the Corporation's assets or any other action which would
entitle shareholders of the Corporation to dissent pursuant to the Georgia
Business Corporation Code, information as required by the Georgia Business
Corporation Code must be delivered to the shareholder prior to his execution of
the waiver of notice, or the waiver itself must expressly waive the right to
such information.
Notice of any meeting may be given by the President, the Secretary or by
any other person authorized by the Board of Directors to give notice of such
meeting. Unless the Board of Directors chooses or is required to fix a new
record date, no notice need be given of the date, time and place of reconvening
of any adjourned meeting if the date, time and place to which the meeting is
adjourned are announced at the meeting prior to adjournment.
SECTION 4. List of Shareholders. The officer or agent having charge of the
stock transfer books for shares of the Corporation shall make a complete list of
the shareholders entitled to vote at a meeting of shareholders or any
adjournment thereof, arranged in alphabetical order by voting groups, and within
each voting group, by class or series of shares, with the address of and the
number of shares held by each shareholder shown. Such list shall be available
for inspection by any shareholder, his or her agent or attorney at the time and
place of the meeting.
SECTION 5. Quorum; Required Shareholder Vote. A quorum for action on a
matter at any annual or special meeting of shareholders shall exist as to a
particular voting group when the holders of a majority of the votes entitled to
be cast on that matter by that voting group are represented either in person or
by proxy at such meeting. If a quorum is present, the vote of the majority of
the votes cast on the matter shall be the act of the shareholders, unless a
greater vote is required by law, by the Articles of Incorporation or by these
Bylaws,
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and except in the election of directors, for which a plurality of the votes cast
shall be the act of the shareholders. Once a share is represented for any
purpose at a meeting other than solely to object to holding the meeting, it is
deemed present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting. The holders of a majority of the voting shares represented at
a meeting, whether or not a quorum is present, may adjourn such meeting from
time to time.
SECTION 6. Proxies. A shareholder may vote either in person or by a proxy
appointed pursuant to an appointment of proxy that such shareholder has duly
executed in writing. No appointment of proxy shall be valid after eleven (11)
months from the date of its execution unless a longer period is expressly
provided in the appointment.
SECTION 7. Action of Shareholders Without Meeting. Any action required or
permitted to be taken at a meeting of the shareholders may be taken without a
meeting if all of the shareholders entitled to vote on such action execute one
or more written consents setting forth the action or actions so taken and such
written consents are delivered to the Corporation for inclusion in the minutes
of the shareholders or filing with the corporate records; provided, however,
that, with respect to any action for which the Corporation would have otherwise
been required to send the shareholders materials along with and in addition to
the notice of the meeting at which such action would be voted on, including, but
not limited to, materials relating to dissenters' rights, the Corporation must
deliver such materials to the shareholders prior to their execution of the
consent, or the consent must expressly waive the right to receive such
materials. Such consents shall have the same force and effect as a unanimous
vote of the shareholders at a meeting and may be described as such in any
document.
ARTICLE II
DIRECTORS
SECTION 1. Power of Directors. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the Corporation shall
be managed under the direction of, the Board of Directors, subject to any
restrictions imposed by law, by the Articles of Incorporation, by a provision in
these Bylaws if approved by the shareholders or by any agreement among the
shareholders which is otherwise lawful.
SECTION 2. Composition of the Board. The Board of Directors of the
Corporation shall consist of between (1) one and nine (9) natural persons of the
age of eighteen (18) years or over. The exact number of directors within the
specified minimum and maximum shall be fixed by resolution of the Board of
Directors or by resolution of the shareholders from time to time, but no
decrease in the number of directors shall shorten the term of any incumbent
director. Directors need not be residents of the State of Georgia or
shareholders of the Corporation. At each annual meeting, the shareholders shall
elect the directors, who shall serve until their successors are elected and
qualified, or until such directors' earlier resignation, removal from office or
death. At any shareholders' meeting with respect to which notice of such purpose
has been given, the entire Board of Directors or any individual director may be
removed, with or without cause, by the affirmative vote of a majority of the
votes cast on the matter.
SECTION 3. Meetings of the Board; Notice of Meetings; Waiver of Notice. The
annual meeting of the Board of Directors for the purpose of electing officers
and transacting such other business as may be brought before the meeting shall
be held each year immediately following the annual meeting of shareholders. The
Board of Directors may by resolution provide for the time and place of other
regular meetings and no notice of such regular meetings need be given. Special
meetings of the Board of Directors may be called by the President or by an
director, and written notice of the date, time, and place of such meetings shall
be given to each director by first class or air mail or by telephone, telegraph,
cablegram or in person at least two (2) days before the meeting. A director
shall have waived notice of a meeting if he or she: (1) executes a written
waiver of notice either before or after the meeting and delivers such waiver to
the Corporation for inclusion in the minutes of the Board of Directors or filing
with the corporate records, or (2) attends the meeting and does not
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object at the beginning of the meeting or promptly upon his or her arrival at
the meeting to the holding of the meeting or the transacting of business at the
meeting and does not afterward vote for or assent to any action taken at the
meeting. Neither the business to be transacted at, nor the purpose of, any
meeting of the Board of Directors need be stated in the notice or waiver of
notice of such meeting. Any meeting may be held at any place within or without
the State of Georgia.
SECTION 4. Quorum; Vote Requirement. A majority of the number of directors
prescribed shall continue a quorum for the transaction of business at any
meeting, except that when a board consists of only one director as authorized in
Article II, Section 2 hereof, then one director shall constitute a quorum. When
a quorum is present, the vote of a majority of the directors present and voting
shall be the act of the Board of Directors, unless a greater vote is required by
law, by the Articles of Incorporation or by these Bylaws.
SECTION 5. Action of Board Without Meeting. Any action required or
permitted to be taken at a meeting of the Board of Directors or any committee
thereof may be taken without a meeting if all of the members of the Board or
committee execute one or more written consents setting forth the action so
taken, and such written consents are delivered to the Corporation for filing
with the corporate records or for inclusion in the minutes of the proceedings of
the Board or committee meeting. Such consents shall have the same force and
effect as a unanimous affirmative vote of the Board of Directors or committee
members at a meeting, as the case may be, and may be described as such in any
document.
SECTION 6. Vacancies. Any vacancy occurring on the Board of Directors,
including a vacancy resulting from an increase in the number of directors, may
be filled by the shareholders, by the remaining directors or, if the remaining
directors constitute less than a quorum, by the affirmative vote of a majority
of the remaining directors. A director elected to fill a vacancy shall serve for
the unexpired term of his predecessor in office, or, if such vacancy occurs by
reason of an amendment to these Bylaws increasing the number of directors, until
the next election of directors by the shareholders and the election and
qualification of the successor.
SECTION 7. Committees. The Board of Directors may create one or more
committees and appoint members of the Board of Directors to serve on them. Each
committee may have one or more members. Each committee shall be authorized to
exercise such powers of the Board of Directors as the Board of Directors may
specify, except that in no event shall a committee have the power to (i) approve
or propose to the shareholders any action required by law to be approved by the
shareholders; (ii) fill vacancies on the Board of Directors or any committee;
(iii) amend the Articles of Incorporation; (iv) adopt, amend or repeal bylaws;
or (v) approve a plan of merger not requiring shareholder approval.
SECTION 8. Telephone Conference Meetings. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors or committee by means of
telephone conference or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section 8 shall constitute presence in person at such
meeting.
SECTION 9. Shareholder Agreements Affecting Voting Rights of Directors. If
the shareholders enter into an agreement that provides that any director shall
have more or less than one vote on any matter, and if such agreement complies
with the law, then every reference in these Bylaws to a majority or other
proportion of directors shall refer to a majority or other proportion of the
votes of directors.
ARTICLE III
OFFICERS
SECTION 1. Executive Structure of the Corporation. The officers of the
Corporation shall be elected by the Board of Directors and shall include a
President and may also include a Secretary, a Treasurer and such other officers
or assistant officers, including Vice Presidents, as may be elected by the Board
of Directors or appointed by the duly elected President of the Corporation. Each
officer shall hold office for the term for which such officer has been elected
or appointed and until such officer's successor has been elected or
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appointed and has qualified, or until such officer's earlier resignation,
removal from office or death. Any two or more offices may be held by the same
person.
SECTION 2. President. The President shall be the chief executive officer of
the Corporation and shall give general supervision and direction to the affairs
of the Corporation, subject to the direction of the Board of Directors. The
President shall preside at all meetings of the shareholders. The President shall
also have all of the responsibilities and duties of the Secretary, if no
Secretary is elected or if the office of Secretary is otherwise vacant, and
Treasurer, if no Treasurer is elected or if the office of Treasurer is otherwise
vacant.
SECTION 3. Vice President. Any Vice President may act in the case of
absence or disability of the President.
SECTION 4. Secretary. The Secretary shall keep the minutes of the
proceedings of the shareholders and of the Board of Directors, shall
authenticate records of the Corporation and shall have custody of and attest the
seal of the Corporation.
SECTION 5. Treasurer. The Treasurer shall be responsible for the
maintenance of proper financial books and records of the Corporation.
SECTION 6. Other Duties and Authority. Each officer, employee and agent of
the Corporation shall have such other duties and authority as may be conferred
upon such officer, employee or agent by the Board of Directors or delegated to
such officer, employee or agent by the President.
SECTION 7. Removal of Officers. Any officer may be removed at any time by
the Board of Directors, with or without cause, and such vacancy may be filled by
the Board of Directors. This provision shall not prevent the making of a
contract of employment for a definite term with any officer and shall have no
effect upon any cause of action any officer may have as a result of such
officer's removal in breach of a contract of employment.
SECTION 8. Compensation. The salaries of the officers shall be fixed from
time to time by the Board of Directors or by the President. No officer shall be
prevented from receiving such salary by reason of the fact that such officer is
also a director of the Corporation.
ARTICLE IV
STOCK
SECTION 1. Stock Certificates. The shares of stock of the Corporation shall
be represented by certificates in such form as may be approved by the Board of
Directors; provided that, each such certificate when issued shall state on its
face at a minimum the following: (1) the name of the Corporation and that it is
organized under Georgia law, (2) the number and class of shares and the
designation if the series, if any, the certificate represents, and (3) the name
of the person to whom the certificate is issued. Stock certificates shall be
issued to the shareholders of the Corporation in numerical order from the stock
book of the Corporation and, when issued, shall be signed by the President or a
Vice President and the Secretary or an Assistant Secretary of the Corporation
and shall be sealed with the seal of the Corporation. No share certificate shall
be issued until the consideration for the shares represented thereby has been
received by the Corporation.
SECTION 2. Transfer of Stock. In addition to any other restrictions that
may be imposed by law, the Articles of Incorporation, or these Bylaws, or that
may otherwise be validly imposed, shares of stock of the Corporation shall be
transferred only on the books of the Corporation upon surrender to the
Corporation of the certificate or certificates representing the shares to be
transferred accompanied by an assignment in writing of such shares properly
executed by the shareholder of record or such shareholder's duly authorized
attorney-in-fact and with all taxes on the transfer having been paid. The
Corporation may refuse any requested transfer until furnished evidence
satisfactory to it that such transfer is proper. Upon the surrender of a
certificate for transfer of stock, such certificate shall at once be
conspicuously marked on its face "Canceled" and filed with the permanent stock
records of the Corporation. The Board of Directors may make such additional
rules concerning the issuance, transfer and registration of stock and
requirements regarding the establishment of
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lost, destroyed or wrongfully taken stock certificates (including any
requirements of an indemnity bond prior to issuance of any replacement
certificate) as it deems appropriate.
SECTION 3. Registered Shareholders. The Corporation may deem and treat the
holder of record of any stock as the absolute owner for all purposes and shall
not be required to take any notice of any right or claim of right of any other
person except for any rights that a beneficial owner of any stock may have to
inspect the records of the Corporation pursuant to the Georgia Business
Corporation Code.
SECTION 4. Record Date. For the purpose of determining shareholders
entitled to notice of or entitled to vote at any meeting of shareholders, or
shareholders entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other purpose, the Board of Directors of
the Corporation may fix in advance a date as the record date for any such
determination, such date not to be more than seventy (70) days prior to the
meeting date or the date of the action requiring a determination of
shareholders. A determination of shareholders entitled to notice of or to vote
at any meeting of shareholders is effective for any adjournment of the meeting
unless the Board of Directors fixes a new record date, which it must do if the
meeting is adjourned to a date more than one hundred twenty (120) days after the
date fixed for the original meeting.
ARTICLE V
DEPOSITORIES, SIGNATURES AND SEAL
SECTION 1. Depositories. All funds of the Corporation shall be deposited in
the name of the Corporation in such bank, banks, or other financial institutions
as the Board of Directors may from time to time designate and shall be drawn out
on checks, drafts or other orders signed on behalf of the Corporation by such
person or persons as the Board of Directors may from time to time designate.
SECTION 1. Contracts and Deeds. All contracts, deeds and other instruments
shall be signed on behalf of the Corporation by the President or by such other
officer, officers, agent or agents as the Board of Directors may from time to
time by resolution provide.
SECTION 1. Seal. The seal of the Corporation shall be in such from as the
Board of Directors may from time to time authorize. If no form of the seal is
authorized, then the seal of the Corporation shall consist of two concentric
circles, in between which shall be printed the name of the Corporation and the
year of incorporation and in the center of which shall be printed the word
"SEAL."
If the seal is affixed to a document, the signature of the Secretary or an
Assistant Secretary shall attest the seal. The seal and its attestation may be
lithographed or otherwise printed on any document and shall have, to the extent
permitted by law, the same force and effect as if it had been affixed and
attested manually.
ARTICLE VI
INDEMNITY
Any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, formal or informal (including any
action by or in the right of the Corporation), by reason of the fact that such
person is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, shall be indemnified by the Corporation against expenses
(including reasonable attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in a manner he believed in
good faith to be in or not opposed to the best interests of the Corporation (and
with respect to any criminal action or proceeding, if such person had no
reasonable cause to believe such person's conduct was unlawful), to the maximum
extent permitted by, and in the manner provided by, the Georgia Business
Corporation Code.
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ARTICLE VII
AMENDMENT OF BYLAWS
The Board of Directors shall have the power to alter, amend or repeal the
Bylaws or adopt new bylaws, but any bylaws adopted by the Board of Directors may
also be altered, amended or repealed and new bylaws may be adopted by the
shareholders. The shareholders may prescribe that any bylaw or bylaws adopted by
them shall not be altered, amended or repealed by the Board of Directors. Action
by the directors with respect to the Bylaws shall be taken by an affirmative
vote of a majority of all of the directors then in office. Action by the
shareholders with respect to the Bylaws shall be taken by an affirmative vote of
a majority of all shares cast of each voting group entitled to vote thereon.
IN WITNESS WHEREOF, the undersigned Secretary does hereby attest under his
hand and seal that the foregoing Bylaws were adopted as the Bylaws of the
Corporation by action of the Board of Directors of the Corporation as of the
day of , 199 .
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Secretary
(SEAL)
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