SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported)
July 11, 1996 and July 3, 1996, respectively
THE STANDISH CARE COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 0-19815 04-3069586
(State or other jurisdiction (Commission File (IRS Employer
of incorporation or Number) Identification Number)
organization)
Six New England Executive Park, Burlington, MA 01803
(Address of principal executive offices) (Zip Code)
(617) 270-4500
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changes since last report)
<PAGE>
THE STANDISH CARE COMPANY
Index
Item 1 Changes in control of the registrant
Exhibit 1 Merger Agreement
Exhibit 2 Press release dated July 5, 1996
Exhibit 3 Press release dated July 10, 1996
<PAGE>
Item 1. Changes in control of the registrant
On July 5, 1996, The Standish Care Company ("Standish") announced that
it had signed a merger agreement with CareMatrix Corporation ("CareMatrix") of
Needham, MA. Under the agreement, Standish will acquire all of the assets and
operations of CareMatrix and will issue 50 million shares of its common stock to
CareMatrix's stockholders and that the transaction was subject to the approval
of both companies' board of directors and shareholders.
On July 10, 1996, Standish and CareMatrix announced that their
respective boards of directors had approved the merger agreement. The
transaction is expected to close in October 1996 and is subject to the approval
of both companies' stockholders and other customary closing conditions.
At this time, audited financial statements and pro forma financial
information is not available. The Company will furnish this information no later
than sixty days from the date of this filing.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE STANDISH CARE COMPANY
(Registrant)
/S/ Michael J. Doyle
-----------------------------
Michael J. Doyle
Chairman and Chief Executive
Officer
Date: July 12, 1996
<PAGE>
EX-1
AGREEMENT AND PLAN OF MERGER
By and Among
THE STANDISH CARE COMPANY
STANDISH ACQUISITION 1, INC. STANDISH ACQUISITION 2, INC.
STANDISH ACQUISITION 3, INC. STANDISH ACQUISITION 4, INC.
STANDISH ACQUISITION 5, INC. STANDISH ACQUISITION 6, INC.
STANDISH ACQUISITION 7, INC. STANDISH ACQUISITION 8, INC.
STANDISH ACQUISITION 9, INC. STANDISH ACQUISITION 10, INC.
STANDISH ACQUISITION 11, INC. STANDISH ACQUISITION 12, INC.
and
CAREMATRIX OF MASSACHUSETTS, INC. CAREMATRIX OF AMBER LIGHTS, INC.
CAREMATRIX OF AMETHYST ARBOR, INC. CAREMATRIX OF EMERALD SPRINGS, INC.
CAREMATRIX OF CYPRESS STATION, INC. CCC OF MARYLAND, INC.
CAREMATRIX OF CRAGGANMORE, INC. CAREPLEX OF HOMESTEAD, INC.
CAREMATRIX OF DARIEN, INC. CAREPLEX OF MIAMI SHORES, INC.
CAREMATRIX OF ARI, INC. A.M.A. NEW JERSEY DEVELOPMENT, INC.
July 3, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
<S> <C> <C> <C>
ARTICLE I THE MERGER 1
1.1 Execution, Filing and Effective Time 1
1.2 Constituent and Surviving Corporations; Effect of Merger 2
1.3 Certificate of Incorporation and Bylaws 2
1.4 Officers and Boards of Directors 2
1.5 Conversion of Stock and Other Securities of the
Constituent Corporations 3
1.6 Exchange Agent 4
1.7 Exchange of Stock Certificates 5
1.8 Dissenting Shares 5
ARTICLE II CLOSING 6
2.1 The Closing Date 6
2.2 The Closing 6
2.3 Filing Certificate of Merger 6
ARTICLE III REPRESENTATIONS AND WARRANTIES
OF STANDISH 7
3.1 Organization and Qualification 7
3.2 The Subsidiaries of Standish 7
3.3 Capitalization 7
3.4 Corporate Power and Authority 8
3.5 No Violation 8
3.6 SEC Documents 9
3.7 Financial Statements 9
3.8 Absence of Undisclosed Liabilities 9
3.9 Conduct of Business Since the March Balance Sheet Date 10
3.10 Tangible Properties 12
3.11 Real Property 13
3.12 Licenses and Permits 17
3.13 Intellectual Property 17
3.14 Outstanding Commitments 18
3.15 Litigation 18
3.16 Compliance with Law 20
(i)
<PAGE>
3.17 Labor and Employee Relations 20
3.18 Certain Employees 20
3.19 Employee Benefits 21
3.20 Insurance 22
3.21 Transactions with Affiliates 22
3.22 Taxes 22
3.23 Brokers 23
3.24 Environmental Laws 23
3.25 Corporate Records 25
3.26 Accounts Receivable 25
3.27 Proxy Statement 25
3.28 Certain Practices 26
3.29 Disclosure 26
3.30 Contracts and Other Documents 26
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF CAREMATRIX 26
4.1 Organization and Qualification 26
4.2 The Subsidiaries of CareMatrix 26
4.3 Capitalization 27
4.4 Corporate Power and Authority 27
4.5 No Violation 27
4.6 Financial Statements 28
4.7 Absence of Undisclosed Liabilities 28
4.8 Conduct of Business Since the May Balance Sheet Date 28
4.9 Tangible Properties 30
4.10 Real Property 31
4.11 Licenses and Permits 34
4.12 Intellectual Property 34
4.13 Outstanding Commitments 35
4.14 Litigation 35
4.15 Compliance with Law 36
4.16 Labor and Employee Relations 37
4.17 Certain Employees 37
4.18 Employee Benefits 37
4.19 Insurance 38
4.20 Transactions with Affiliates 39
4.21 Taxes 39
4.22 Brokers 40
4.23 Environmental Laws 40
4.24 Corporate Records 41
(ii)
<PAGE>
4.25 Accounts Receivable 41
4.26 Proxy Statement 41
4.27 Certain Practices 42
4.28 Disclosure 42
4.29 Contracts and Other Documents 42
ARTICLE V REPRESENTATIONS AND WARRANTIES
OF ACQUISITION 42
5.1 Organization 42
5.2 Power and Authority 42
5.3 No Violation 43
5.4 Broker 43
5.5 Disclosure 43
ARTICLE VI COVENANTS OF STANDISH AND ACQUISITION 43
6.1 Best Efforts Cooperation 43
6.2 Access 43
6.3 Insurance 44
6.4 Compliance with Laws 44
6.5 Keeping of Books and Records 44
6.6 Conduct of Business 44
6.7 Litigation 46
6.8 Continued Effectiveness of Representations and Warranties 46
6.9 No Negotiations 46
6.10 Monthly Statements 47
6.11 Further Assurances 47
6.12 Certain Agreements 48
ARTICLE VII COVENANTS OF CAREMATRIX 48
7.1 Best Efforts Cooperation 48
7.2 Access 48
7.3 Insurance 48
7.4 Compliance with Laws 48
7.5 Keeping of Books and Records 49
7.6 Conduct of Business 49
7.7 Litigation 50
7.8 Continued Effectiveness of Representations and Warranties 50
7.9 Standstill 50
7.10 Monthly Statements 51
(iii)
<PAGE>
7.11 Further Assurances 51
7.12 Certain Agreements 52
7.13 Stockholder Approval 52
7.14 Restrictive Covenant 53
ARTICLE VIII MUTUAL COVENANTS 52
8.1 General Covenants 52
8.2 Proxy Statement and Fairness Opinion 53
8.3 Stockholder Approval 54
8.4 Public Announcements 54
8.5 Confidentiality 54
8.6 Hart-Scott-Rodino Filing 55
ARTICLE IX CONDITIONS TO CAREMATRIX'S OBLIGATIONS 56
9.1 Representations and Warranties True 56
9.2 Performance 56
9.3 Consents 56
9.4 [Omitted] 56
9.5 HSR Act Requirements 57
9.6 No Material Adverse Change 57
9.7 No Actions, Suits or Proceedings 57
9.8 No Material Adverse Economic Event 57
9.9 Opinion of Counsel 57
9.10 Accountants 57
9.11 Closing Documents 58
9.12 Dissenting Standish Stockholders 58
9.13 [Omitted] 58
9.14 [Omitted] 58
9.15 Employment Agreements 59
9.16 Approval of CareMatrix and its Counsel 59
9.17 Board Approval 60
ARTICLE X CONDITIONS TO STANDISH'S AND ACQUISITION'S
OBLIGATIONS 59
10.1 Representations and Warranties to be True and Correct 59
10.2 Performance 59
10.3 Consents 59
10.4 Stockholder Approval and Conditions Precedent 60
10.5 HSR Act Requirements 60
(iv)
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10.6 No Material Adverse Change 60
10.7 No Actions, Suits or Proceedings 60
10.8 Opinion of CareMatrix's Counsel 60
10.9 Fairness Opinion 60
10.10 Acquisition Corporations 61
10.11 Closing Documents 61
10.13 [Omitted] 61
10.14 Employment Agreements 61
10.15 Approval of Standish, Acquisition and their Counsel 61
10.16 Board Approval 62
ARTICLE XI SURVIVAL 62
ARTICLE XII TERMINATION 62
12.1 Termination 62
12.2 Effect of Termination 63
ARTICLE XIII MISCELLANEOUS 64
13.1 Notices 64
13.2 Entire Agreement 66
13.3 Modifications and Amendments 66
13.4 Waivers and Consents 66
13.5 Assignment 67
13.6 Parties in Interest 67
13.7 Governing Law 67
13.8 Jurisdiction and Service of Process 67
13.9 Severability 68
13.10 Interpretation 68
13.11 Headings and Captions 68
13.12 Choice of Remedies and Enforcement 68
13.13 Expenses 69
13.14 Counterparts 69
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(v)
<PAGE>
EXHIBITS
1.1 - Certificate of Merger
1.5(a) - Allocation of Shares
1.5(d) - Affiliates
9.9 - Opinion of Standish's Counsel
10.5 - Opinion of CareMatrix's Counsel
(vi)
<PAGE>
STANDISH DISCLOSURE SCHEDULE
3.2 - Subsidiaries
3.3 - Options and Warrants
3.5 - No Violation
3.8 - Liabilities
3.9 - Conduct of Business
3.10 - Tangible Properties
3.11 - Real Property
3.12 - Licenses and Permits
3.13 - Intellectual Property
3.14 - Outstanding Commitments
3.15 - Litigation
3.16 - Compliance with Law
3.17 - Employee Claims
3.18 - Employees
3.19 - Employee Benefits
3.20 - Insurance
3.21 - Transactions with Affiliates
3.22 - Taxes
3.24 - Environmental Matters
(vii)
<PAGE>
CAREMATRIX DISCLOSURE SCHEDULE
4.2 - Subsidiaries
4.3 - Options and Warrants
4.5 - No Violation
4.7 - Liabilities
4.8 - Conduct of Business
4.9 - Tangible Properties
4.10 - Real Property
4.11 - Licenses and Permits
4.12 - Intellectual Property
4.13 - Outstanding Commitments
4.14 - Litigation
4.15 - Compliance with Law
4.16 - Employee Claims
4.17 - Employees
4.18 - Employee Benefits
4.19 - Insurance
4.20 - Transactions with Affiliates
4.23 - Environmental Matters
(viii)
AGREEMENT AND PLAN OF MERGER
This Agreement is made and entered into effective as of July 3, 1996 by
and among The Standish Care Company, a Delaware corporation ("Standish"), each
of the corporations listed on Schedule I hereto (each of which is referred to
herein as an "Acquisition Corporation") which have joined herein by executing
this Agreement and each of the corporations listed on Schedule II hereto (each
of which is referred to herein as a "CareMatrix Corporation" and all of which
are collectively referred to as "CareMatrix").
BACKGROUND
A. Standish is engaged in the business of providing long term care
services through the operation and management of assisted living communities
throughout the eastern United States. CareMatrix is also engaged in the business
of providing long term care services through the operation and management of
assisted living communities.
B. Each Acquisition Corporation is a wholly-owned subsidiary of
Standish.
C. CareMatrix and Standish have determined that it is in the best
interests of each to effect a merger of each Acquisition Corporation with and
into a specified CareMatrix Corporation as set forth in Schedule III hereto (the
"Merger") as provided in this Agreement.
D. Pursuant to the Merger, the holders of shares of common stock, par
value $.01 per share, of each CareMatrix Corporation (the "CareMatrix Common
Stock") will receive shares of common stock of Standish in the manner set forth
in Article I of this Agreement and upon the terms and conditions otherwise set
forth in this Agreement.
E. The Merger is fair and in the best interests of the stockholders of
the respective corporations.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual agreements hereinafter contained, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 Execution, Filing and Effective Time. On the Closing Date
(as hereinafter defined) and subject to the terms and conditions hereinafter set
forth, the parties hereto agree to cause the Merger to be consummated by filing
with the Delaware Secretary of State Certificates of Merger (the "Certificates
of Merger") in the forms set forth in Exhibit 1.1 hereto, duly executed and
acknowledged, and taking all such further actions as may be required by law to
make the Merger effective. The Merger shall become effective when the
Certificates of Merger are so filed in accordance with the Delaware General
<PAGE>
Corporation Law (the "Delaware Law"), and the time at which the Merger becomes
effective is referred to herein as the "Effective Time."
1.2 Constituent and Surviving Corporations; Effect of Merger.
The CareMatrix Corporations and the Acquisition Corporations shall be the
constituent corporations in the Merger, and the CareMatrix Corporations shall be
the surviving corporations in the Merger (in such capacity, the CareMatrix
Corporations are sometimes hereinafter referred to as the "Surviving
Corporations"). At the Effective Time, the Merger shall have the effect set
forth in Section 259 of the Delaware Law.
1.3 Certificate of Incorporation and Bylaws. At the Effective
Time, the Certificates of Incorporation of the CareMatrix Corporations shall be
the Certificates of Incorporation of the Surviving Corporations and the By-laws
of the CareMatrix Corporations as in effect at the Effective Time shall be the
By-laws of the Surviving Corporations.
At the Effective Time, the Restated Certificate of Incorporation of
Standish shall be amended solely to increase to 75,000,000 the number of
authorized shares of Standish Common Stock and to change the name of Standish to
CareMatrix Corporation (the "Standish Certificate Amendment"). At the Effective
Time, the By-Laws of Standish shall be the current By-Laws of Standish amended
solely to authorize the positions created pursuant to Section 1.4(a) hereof (the
"Standish By-Laws Amendment").
1.4 Officers and Boards of Directors. At the Effective Time:
(a) the Chairman, the President and Chief Operating
Officer and the Treasurer and Chief Financial Officer of Standish shall
resign or be removed, new positions of Chief Executive Officer and
Senior Vice President of Finance, respectively, shall be created in
accordance with the Standish By-Laws Amendment and, concurrently
therewith, the following persons shall be elected or appointed to the
position listed opposite his name:
Abraham D. Gosman - Chairman, Board of Directors
Michael J. Doyle - Chief Executive Officer
Andrew D. Gosman - President
Kenneth M. Miles - Senior Vice President of Finance
The Chief Financial Officer shall be designated by the foregoing Chief
Executive Officer and President.
(b) except as set forth in this subsection, each of the
members of the Board of Directors of Standish shall resign or be
removed and, concurrently therewith, the following persons shall be
appointed to the Board of Directors:
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Abraham D. Gosman
Michael J. Doyle
Andrew D. Gosman
In addition, four outside directors shall be appointed by the
foregoing Board of Directors to fill the vacancies created by
resignation or removal of the aforementioned directors.
(c) At the Effective Time, the following persons shall
be appointed to the position with respect to the CareMatrix
Corporations set forth opposite his name:
Michael M. Gosman -- Executive Vice President
Joel A. Kanter -- Executive Vice President
James M. Clary, III -- General Counsel, Executive Vice President
and Secretary
Michael J. Zaccaro -- Senior Vice President
Jonathan R. Banton -- Senior Vice President
Kevin J. Maley -- Senior Vice President
1.5 Conversion of Stock and Other Securities of the Constituent
Corporations.
(a) The shares of Common Stock of the CareMatrix Corporations
issued and outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of any
holder thereof, be converted into the right to receive an aggregate of
fifty million (50,000,000) newly issued, fully paid, and non-assessable
shares of common stock, par value $.01 per share, of Standish
("Standish Common Stock") allocated as set forth on Exhibit 1.5(a),
upon surrender of the certificates formerly representing shares of
CareMatrix Common Stock.
(b) Each share of common stock of an Acquisition Corporation
outstanding immediately prior to the Effective Time shall, on such
date, by virtue of the Merger and without any action on the part of any
holder thereof, be cancelled and each Surviving Corporation shall issue
one (1) share of its common stock to Standish.
(c) No fractional shares of Standish Common Stock shall be
issued. Instead, stockholders of CareMatrix whose conversion of
CareMatrix Common Stock results in more or less than one whole share of
Standish Common Stock will have their shares rounded to the nearest
whole number. The shares of Standish Common
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Stock issuable in exchange for each share of CareMatrix Common Stock
are referred to herein as the "Merger Consideration."
(d) All shares issued to the stockholders of CareMatrix
representing the Merger Consideration shall be registered on a Form S-4
Registration Statement (the "Form S-4 Registration Statement") to be
filed by Standish with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act"). The Form S-4 Registration Statement shall also
register for resale the shares of Standish Common Stock issued to the
affiliates of CareMatrix listed on Exhibit 1.5(d) at the Effective Time
of the Merger. Standish shall cause the Form S-4 Registration Statement
to be declared effective at the earliest practicable date and to
continue to be effective and usable for their intended purposes for as
long as any Standish Common Stock continues to be held by any of the
foregoing affiliates and such shares are restricted securities and
therefore required under the federal securities laws to be resold under
Rule 145 promulgated under the Securities Act or through an effective
registration statement under applicable Commission regulations.
Notwithstanding the foregoing, Standish is allowed to let the Form S-4
Registration Statement be "stale", or unusable, for up to one hundred
twenty (120) consecutive days at a time, but no more than one hundred
eighty (180) total days in any successive twelve month period, if the
reason for such unusability is an announced acquisition, disposition or
other event which would require a post-effective amendment or a
supplement to an existing registration statement under Commission
regulations or any other occurrence which under Commission regulations
causes the Form S-4 Registration Statement to be unusable. If the Form
S-4 Registration Statement becomes stale or unusable, Standish shall
use its best efforts to file a post-effective amendment at the earliest
practicable date so that the Form S-4 Registration Statement will be
usable.
(e) Each share of CareMatrix Common Stock held in the treasury
of any of the CareMatrix Corporations immediately prior to the
Effective Time shall, at the Effective Time, by virtue of the Merger
and without any action on the part of the holder thereof, be cancelled
and retired and cease to exist and no payment shall be made with
respect thereto.
1.6 Exchange Agent. Prior to the Effective Time, CareMatrix and
Standish shall appoint American Securities Transfer, Incorporated, Standish's
transfer agent, or such other mutually acceptable bank or trust company as agent
(the "Exchange Agent") for the purpose of exchanging certificates representing
shares of CareMatrix Common Stock outstanding immediately prior to the Effective
Time for the Merger Consideration.
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1.7 Exchange of Stock Certificates.
(a) Promptly after the Effective Time, the Exchange Agent
shall mail to each record holder of a CareMatrix Corporation, as of the
Effective Time, of an outstanding certificate or certificates which
immediately prior to the Effective Time represented shares of
CareMatrix Common Stock (the "Certificates") a form letter of
transmittal and instructions advising such holder of the relevant terms
of the exchange effected by the Merger and the procedure for
surrendering to the Exchange Agent such Certificates for exchange for
use in effecting the surrender of the Certificates. Upon surrender to
the Exchange Agent of a Certificate, together with such letter of
transmittal duly executed, the holder of such Certificate shall be
entitled to receive in exchange therefor a certificate or certificates
representing the Merger Consideration multiplied by the number of
shares of CareMatrix Common Stock represented by such Certificate and
such surrendered Certificate shall then be cancelled. Until surrendered
in accordance with the provisions of this Section 1.7, each Certificate
shall represent for all purposes the right to receive Merger
Consideration multiplied by the number of shares of CareMatrix Common
Stock represented by such Certificate.
(b) At and after the Effective Time there shall be no
transfers of shares of CareMatrix Common Stock which were outstanding
immediately prior to the Effective Time on the stock transfer books of
any CareMatrix Corporation. If, after the Effective Time, Certificates
are presented to CareMatrix or the Exchange Agent, they shall be
cancelled and exchanged for the Merger Consideration multiplied by the
number of shares of CareMatrix Common Stock represented by such
Certificates as provided in this Article I. At the close of business on
the day prior to the Effective Time the stock ledger of each CareMatrix
Corporation shall be closed.
(c) From and after the Effective Time, holders of Certificates
formerly evidencing shares of CareMatrix Common Stock shall cease to
have any rights as stockholders of CareMatrix, except as provided
herein or by law. Notwithstanding the foregoing in this Section 1.7,
neither the Surviving Corporations nor Standish shall be liable to any
holder of shares of CareMatrix Common Stock for any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
1.8 Dissenting Shares. Notwithstanding the provisions of
Section 1.5(a), no share of CareMatrix Common Stock outstanding immediately
prior to the Effective Time that is held by a holder who has not voted in favor
of the Merger or consented thereto in writing and who has demanded appraisal for
such shares in accordance with the Delaware Law shall not be converted into a
right to receive the Merger Consideration, unless such holder fails to perfect
or withdraws or otherwise loses such holder's right to appraisal under the
Delaware Law. If, after the Effective Time, such holder fails to perfect or
withdraws or
5
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loses his right to appraisal, such shares shall be treated as though they had
been converted as of the Effective Time into a right to receive the Merger
Consideration, without interest. On or before the SEC Filing Date, the Merger
shall have been approved by the stockholders of CareMatrix, and the holders of
no more than five percent (5%) of the CareMatrix shares shall have demanded
appraisal rights in accordance with Delaware law.
1.9 Updated CareMatrix Financial Statements. As soon as
reasonably practicable, but in no event later than 25 days following the date of
this Agreement, CareMatrix shall prepare, with the assistance and cooperation of
Standish, and deliver to Standish a combined unaudited balance sheet of
CareMatrix as of June 30, 1996 (the "June 30 CareMatrix Balance Sheet") and
related statements of operations and retained earnings and cash flows for the
three and six month periods then ended, (the "June 30 CareMatrix Financial
Statements") together with a combined unaudited pro forma balance sheet (as of
June 30, 1996) and income statement (for the six months ended June 30, 1996).
Within 35 days following the date of this Agreement CareMatrix shall deliver to
Standish a letter (the "Procedures Letter") relating to the June 30 CareMatrix
Balance Sheet and the June 30 CareMatrix Financial Statements from Coopers &
Lybrand L.L.P. ("C&L"), CareMatrix' independent public accountants, in form and
substance agreed upon by C&L and Standish, covering agreed upon procedures
meeting the requirements of SAS 71.
ARTICLE II
CLOSING
2.1 The Closing Date. Subject to the satisfaction or waiver of
each of the conditions contained in Articles IX and X of this Agreement, the
closing of the Merger and the other transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Nutter, McClennen & Fish,
LLP, One International Place, Boston, Massachusetts at 10:00 a.m. on a date
agreeable to the parties within five (5) business days after the satisfaction or
waiver of all conditions to Closing set forth in Articles IX and X, or on such
other date or at such other location or time as may be agreed upon by the
parties (such date and time being called the "Closing Date"), but in no event
later than the Termination Date (as defined in Section 12.1(c)).
2.2 The Closing. At the Closing, the CareMatrix Corporations,
Standish and the Acquisition Corporations shall each deliver to each other such
certificates, instruments, documents and opinions as are set forth in Articles
IX and X, each of which shall be fully executed and completed, as appropriate.
2.3 Filing Certificate of Merger. Contemporaneous with the
Closing, the duly executed Certificates of Merger shall be filed with the
Delaware Secretary of State.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF STANDISH
Standish represents and warrants to CareMatrix as follows:
3.1 Organization and Qualification. Standish is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Standish is qualified as a foreign corporation in each
jurisdiction where it is required to be so qualified.
3.2 The Subsidiaries of Standish. Schedule 3.2 of the separate
Disclosure Schedule to be delivered by Standish to, and approved by, CareMatrix
on or before July 9, 1996 (the "Standish Disclosure Schedule") sets forth
correctly the name, jurisdiction of organization, states in which it is
qualified to do business, activities and ownership control of each entity in
which Standish, directly or indirectly, owns any interest (individually, a
"Standish Subsidiary," and collectively, the "Standish Subsidiaries"). Except as
shown on Schedule 3.2(a) of the Standish Disclosure Schedule, each Standish
Subsidiary is qualified to do business as a foreign entity in each jurisdiction
where it is required to be so qualified except where the failure to be so
qualified would not, individually or in the aggregate, cause a Material Adverse
Change (as hereinafter defined) with respect to Standish. All issued and
outstanding shares or other ownership interests of the Standish Subsidiaries are
duly authorized, validly issued, fully-paid and nonassessable and, except as set
forth on Schedule 3.2 (a) of the Standish Disclosure Schedule, Standish or a
Standish Subsidiary is the sole owner of all such issued and outstanding shares
or other ownership interests. Except as shown on Schedule 3.2(b) of the Standish
Disclosure Schedule, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights or
other contracts or commitments that require any Standish Subsidiary to issue,
sell or otherwise cause to become outstanding any of its capital stock,
partnership interests or other securities. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation or similar
rights with respect to the Standish Subsidiaries. Except as shown on Schedule
3.2(c) of the Standish Disclosure Schedule, there are no stockholders'
agreements, voting trusts, proxies or other agreements or understandings with
respect to the voting or ownership of the capital stock or partnership interests
of the Standish Subsidiaries. Except as set forth on Schedule 3.2 of the
Standish Disclosure Schedule, Standish does not control directly or indirectly
or have any direct or indirect equity participation in any corporation,
partnership, joint venture, trust or other business association other than the
Standish Subsidiaries.
3.3 Capitalization. The authorized capital stock of Standish
consists of: 30,000,000 shares of Standish Common Stock, $.01 par value, of
which 3,609,453 shares are outstanding; and 999,568 shares of Preferred Stock,
par value $.01 per share, of which 875,000 have been designated Series A
Cumulative Preferred Stock (the "Standish Preferred
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Stock") of which 56,000 shares are outstanding. At the Closing Date, the
authorized capital stock of Standish shall consist of 75,000,000 shares of
Common Stock, and there shall be no more than 5,500,000 shares of Standish
Common Stock issued and outstanding, including all shares issued between the
date hereof and the Closing Date upon the exercise of options, warrants and
other similar rights. All of the outstanding shares of Standish Common Stock
have been validly issued and are fully-paid and nonassessable. Except as set
forth in Schedule 3.3 (a) of the Standish Disclosure Schedule, there are
outstanding no options, warrants, rights, or other agreements or commitments
obligating Standish to issue or sell shares of its capital stock or any
securities or obligations convertible into or exchangeable for any shares of its
capital stock. Standish has no obligation to register any shares of Standish
Common Stock under the Securities Act. Except as shown on Schedule 3.3(c) of the
Standish Disclosure Schedule, Standish is not obligated directly, indirectly or
contingently to purchase or redeem any shares of Standish Common Stock.
3.4 Corporate Power and Authority. Standish and the Standish
Subsidiaries have full corporate or partnership power and authority to carry on
their businesses as now being conducted in the jurisdictions where such
businesses are now conducted and to own, operate and lease the Standish
Properties. This Agreement, the Merger and the other transactions contemplated
hereby have been duly and unanimously approved by the Board of Directors of
Standish, subject to the approval of the Agreement and the Merger and the
Standish Certificate Amendment by the stockholders of Standish. Standish has
full corporate power and authority to enter into this Agreement and, subject to
the approval of the Agreement and the Merger and the Standish Certificate
Amendment by the stockholders of Standish, to consummate the Merger and the
other transactions contemplated hereby, and this Agreement and each of the other
agreements to be executed and delivered by Standish in connection herewith
constitute the legal, valid and binding obligations of Standish enforceable
against it in accordance with their respective terms.
3.5 No Violation. Neither the execution and delivery of this
Agreement and the other documents and instruments contemplated hereby and the
consummation of the Merger and the other transactions contemplated hereby, nor
the performance of this Agreement and such other documents and instruments in
compliance with the terms and conditions hereof and thereof, except as set forth
in Schedule 3.5 of the Standish Disclosure Schedule, will (i) violate, conflict
with or result in any breach of any trust agreement, charter document, by-law,
judgment, decree, order, statute or regulation applicable to Standish or any
Standish Subsidiary, (ii) require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority
(other than filing the Certificate of Merger and the Standish Certificate
Amendment with the Delaware Secretary of State), (iii) violate, conflict with or
result in a breach, default or termination or give rise to any right of
termination, cancellation or acceleration of the maturity of any payment date of
any obligation of Standish or any Standish Subsidiary or increase or otherwise
affect the obligations of Standish or any Standish Subsidiary under any law,
rule, regulation or any
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judgment, decree, order, governmental permit, license or order or any of the
terms, conditions or provisions of any mortgage, indenture, note, license,
agreement or other instrument or obligation related to Standish or any Standish
Subsidiary or to Standish's ability to consummate the Merger and the other
transactions contemplated hereby, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents, in form and substance satisfactory to CareMatrix, have been or will be
obtained in writing and provided to CareMatrix at or prior to the Closing, (iv)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Standish or any Standish Subsidiary or (v) result in the creation
of any liability, claim, assessment, security interest, lien, restriction,
encumbrance, or right, title or interest in others (collectively, a "Claim")
upon or against the properties of Standish or any Standish Subsidiary.
3.6 SEC Documents. Standish has delivered to CareMatrix a true
and complete copy of each report, schedule, registration statement and
definitive proxy statement filed by it with the Commission (as any such
documents have since the time of their filing been amended, the "SEC Documents")
since January 1, 1993, which are all the documents (other than preliminary
material) that it was required to file with the Commission since such date. As
of their respective dates, the SEC Documents complied with the requirements of
the Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as the case may be, and the rules and regulations of the
Commission thereunder applicable to such SEC Documents, and none of the SEC
Documents contained any untrue statement of material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All agreements, contracts and other documents required to be filed
as exhibits to any of the SEC Documents have been so filed. Since January 1,
1993 Standish has timely filed all reports, registration statements and other
filings required to be filed with the Commission under the rules and regulations
of the Commission.
3.7 Financial Statements. The financial statements of Standish
included within the SEC Documents (the "Standish Financial Statements") fairly
present the financial position of Standish and the Standish Subsidiaries as of
their respective dates and accurately set forth the results of operations for
the periods presented therein, as the case may be, all in conformity with
generally accepted accounting principles ("GAAP") and the applicable accounting
requirements of the Commission (with respect to financial statements filed with
the Commission), consistently applied, of Standish and the Standish
Subsidiaries, except as otherwise noted therein. Any financial statements
prepared by Standish after the March 31, 1996 quarterly financial statements
will be prepared in accordance with GAAP and the applicable accounting
requirements of the Commission (with respect to any financial statements filed
with the Commission), consistently applied, and will fairly present the
financial position as of their respective dates and accurately set forth the
results of operations for the periods presented therein, of Standish and the
Standish Subsidiaries, except as otherwise noted therein.
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3.8 Absence of Undisclosed Liabilities. Except as set forth or
reserved against in the balance sheet (the "Balance Sheet") as of March 31, 1996
(the "March Balance Sheet Date") included in the Financial Statements or
disclosed in the notes thereto, Standish (i) did not have as of the March
Balance Sheet Date any liability or obligation of any nature, whether accrued,
absolute, contingent, or otherwise and whether due or to become due, including
without limitation liabilities that may become known or arise after the date
hereof and which relate to transactions entered into or any state of facts
existing on or before the March Balance Sheet Date, which would be required
under GAAP to be shown in such balance sheet or referenced in the notes thereto,
and (ii) except as shown on Schedule 3.8 of the Standish Disclosure Schedule has
not incurred since the March Balance Sheet Date any such liability or obligation
except in the ordinary course of business.
3.9 Conduct of Business Since the March Balance Sheet Date.
Since the March Balance Sheet Date, except as set forth on Schedule 3.9 of the
Standish Disclosure Schedule, there has been no Material Adverse Change (as
hereinafter defined) with respect to Standish, and no such Material Adverse
Change is threatened, contemplated or anticipated. As used herein, the term
"Material Adverse Change" shall mean, (i) with respect to Standish, (a) a
material adverse change in the Financial Condition (as hereinafter defined) of
Standish and the Standish Subsidiaries or (b) a material adverse change in the
business or prospects of Standish and the Standish Subsidiaries taken as a
whole; (ii) with respect to CareMatrix, (a) a material adverse change in the
Financial Condition (as defined in Section 4.8 hereof) of the CareMatrix
Corporations taken as a whole or (b) a material adverse change in the results of
operations, assets, liabilities, business or prospects of the CareMatrix
Corporations taken as a whole and (iii) with respect to any other person or
entity, a material adverse change in the Financial Condition, results of
operations, assets, liabilities, business or prospects of such person or entity.
As used in this Section 3.9, "material adverse change in the Financial
Condition" of Standish and the Standish Subsidiaries shall mean a reduction of
more than $2,000,000 in the Net Working Capital (Deficit) (as hereinafter
defined) of Standish from the Net Working Capital (Deficit) as of the March
Balance Sheet Date to the Net Working Capital (Deficit) as of the last day of
the calendar month immediately preceding the Closing Date (the "Final Net
Working Capital (Deficit)"), as shown on a balance sheet prepared by Standish
(the "Determination Balance Sheet"). The term "Net Working Capital (Deficit)"
shall mean, with reference to Standish's existing balance sheet classifications,
the difference between (a) "Total current assets" as reduced by "Due from
related parties" and (b) "Total current liabilities," as reduced by "Current
portion of long-term debt". For purposes of the foregoing calculation, the
following shall be excluded from the determination of Final Net Working Capital:
any proceeds from the exercise of stock options after the March Balance Sheet
Date. Standish shall not change the classification of any items shown on the
Balance Sheet in its preparation of the Determination Balance Sheet, and the
Determination Balance Sheet shall include all of the expenses and fees incurred
and reasonably anticipated to be incurred by Standish in connection with the
Merger. The determination of Final Net Working Capital (Deficit) shall be made
in accordance with GAAP, consistently applied.
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Since the March Balance Sheet Date, except as set forth on Schedule 3.9
of the Standish Disclosure Schedule, neither Standish nor any Standish
Subsidiary has taken or agreed to take any action that would obligate Standish
or any Standish Subsidiary to have:
(a) taken any action or entered into or agreed to enter into
any transaction, agreement or commitment other than in the ordinary
course of business;
(b) entered into or agreed to enter into any transaction,
agreement or commitment, or suffered the occurrence of any event or
events (i) that has interfered or is reasonably likely to interfere
with the normal and usual operations of the business of Standish or any
Standish Subsidiary or (ii) that, singly or in the aggregate, has
resulted or is reasonably likely to result in a Material Adverse Change
with respect to Standish;
(c) incurred or increased any indebtedness for borrowed money
or any capital lease obligations other than to CareMatrix, or assumed,
guaranteed, endorsed or otherwise become responsible for the
obligations of any other individual, partnership, firm or corporation
(except to endorse checks for collection for deposit in the ordinary
course of business), or made any loan or advance to any individual,
partnership, firm or corporation;
(d) except in connection with a loan from CareMatrix to
Standish, mortgaged, pledged, or otherwise encumbered, or, other than
in the ordinary course of business, sold, transferred or otherwise
disposed of, any of the properties or assets of Standish or any
Standish Subsidiary, including any cancelled, released, hypothecated or
assigned indebtedness owed to Standish or any Standish Subsidiary, or
any claims held by Standish or any Standish Subsidiary;
(e) made any investment of a capital nature or entered into a
commitment for such investment either by purchase of stock or
securities, contributions to capital, property transfer or otherwise,
or by the purchase of any property or assets of any other individual,
partnership, firm or corporation;
(f) declared, set aside, or paid any dividend or other
distribution (whether in cash, stock or property, or any combination
thereof) in respect of the capital stock of Standish, or redeemed or
otherwise acquired, directly or indirectly, any shares of capital stock
of Standish;
(g) paid any long-term liability, otherwise than in accordance
with its terms;
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(h) paid any bonus compensation to any officer, director,
stockholder or employee of Standish or any Standish Subsidiary or
otherwise increased the compensation paid or payable to any of the
foregoing, except as contemplated pursuant to this Agreement;
(i) sold, assigned or transferred any patents, trademarks,
trade names, logos, copyrights, formulae or other intangible assets;
(j) contracted with or committed to any third party (i) to
sell any capital stock of Standish, (ii) to sell any assets of Standish
or any Standish Subsidiary other than in the ordinary course of
business, (iii) to effect any merger, consolidation or other
reorganization of Standish or any Standish Subsidiary, or (iv) to enter
into any agreement with respect thereto; or
(k) paid any expenses or fees of counsel, accountants or
consultants for services in preparation for or in connection with this
Agreement or the transactions contemplated hereunder in excess of
$650,000.
3.10 Tangible Properties. Schedule 3.10(a) of the Standish
Disclosure Schedule contains a true and complete list showing the remaining
balance of the capitalized value of furniture, fixtures and equipment owned or
leased by Standish or the Standish Subsidiaries, which had an individual value
of $500 or more when purchased or leased ("Furniture, Fixtures and Equipment").
In addition to the Furniture, Fixtures and Equipment, Standish and the Standish
Subsidiaries own or lease miscellaneous other fixed assets, fixtures,
furnishings, furniture, office supplies, computer hardware, and software, tools,
machinery, equipment, spare parts and other tangible property, which had an
individual value of less than $500 when leased or purchased (the "Standish
Miscellaneous Personal Property", and collectively with the Furniture, Fixtures
and Equipment, the "Standish Tangible Personal Property"). Except as listed on
Schedule 3.10 (b) of the Standish Disclosure Schedule with respect to leased
Standish Tangible Personal Property, Standish and the Standish Subsidiaries have
good and marketable title free and clear of all Claims to the Standish Tangible
Personal Property owned by Standish or any Standish Subsidiary. With respect to
any Standish Tangible Personal Property leased by Standish or any Standish
Subsidiary, all leases, conditional sale contracts, franchises or licenses
pursuant to which Standish or any Standish Subsidiary may hold or use (or permit
others to hold or use) such Standish Tangible Personal Property are valid and in
full force and effect, and, except as set forth in Schedule 3.10(c) of the
Standish Disclosure Schedule, there is not under any of such instruments any
existing default or event of default or event which with notice or lapse of time
or both would constitute such a default; and Standish's or any Standish
Subsidiary's possession and use of such property has not been disturbed and no
claim has been asserted against Standish or any Standish Subsidiary adverse to
their rights in such leasehold interests. All Standish Tangible Personal
Property is adequate and usable for
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the purposes for which it is currently used and each item of Standish Tangible
Personal Property, whether owned or leased, is in good operating condition,
reasonable wear and tear excepted, and has been properly maintained and
repaired. The Standish Tangible Personal Property comprises all the equipment
necessary for the continuing operation of the Standish Improvements (as
hereinafter defined) in the manner in which they have been operated to date.
3.11 Real Property.
(a) All real property owned or leased by Standish or any Standish
Subsidiary (the "Standish Properties"), together with the improvements thereon
(the "Standish Improvements") is described in Schedule 3.11(a) of the Standish
Disclosure Schedule. Locations of real property owned by Standish or any
Standish Subsidiary are hereby referred to as "Standish Owned Locations."
Schedule 3.11(a) of the Standish Disclosure Schedule includes a materially
accurate summary reflecting the location, land acreage, brief history, services
and maximum legal unit and bed capacities of each of the Standish Properties.
Schedule 3.11(a) sets forth a list of all real property subject to purchase
options in favor of Standish (such purchase options are herein referred to as
the "Standish Purchase Options", and such locations are herein referred to as
the "Standish Option Locations"). Where the term "Standish Properties" is used
in these representations and warranties, the same shall, unless the context
otherwise requires, include all of the locations referred to as Standish Option
Locations.
(b) The descriptive information concerning the Standish Properties set
forth in Schedule 3.11(a) of the Standish Disclosure Schedule is true, accurate
and complete in all material respects. Except as shown on Schedule 3.11(a) of
the Standish Disclosure Schedule, Standish and the Standish Subsidiaries do not
own or lease or have any rights or interest in any other real property other
than the Standish Properties. Where the term "Standish Properties" is used in
these representations and warranties, the same shall mean all of the properties
and interests constituting the Standish Properties and each individual property
or interest.
(c) As set forth on Schedule 3.11(c), Standish or the applicable
Standish Subsidiary is the legal fee simple or leasehold titleholder of the
Standish Properties and has good, marketable and insurable (at normal rates)
title to the Standish Properties free and clear of all mortgages and security
interests, Standish Tenant Leases (as hereinafter defined), licenses, claims,
options, options to purchase, liens, covenants, conditions, restrictions,
rights-of-way, easements, judgments, encumbrances and other matters affecting
title to the Standish Properties, except for those identified on Schedule
3.11(c) of the Standish Disclosure Schedule (the "Standish Permitted
Encumbrances"). Each survey of the Standish Properties heretofore delivered to
CareMatrix and listed on Schedule 3.11(c) is current,
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complete, accurate, true and correct except as otherwise set forth on said
Schedule 3.11(c). True, accurate and complete copies of those title insurance
policies relative to the Standish Properties and the Standish Permitted
Encumbrances, which policies are as described or referred to in Schedule 3.11(c)
of the Standish Disclosure Schedule, have been delivered by Standish to
CareMatrix, and a list thereof is set forth on Schedule 3.11(c). Except as set
forth in Schedule 3.11(c) of the Standish Disclosure Schedule, there is no
pending litigation or dispute or, to the best of Standish's knowledge, basis for
dispute concerning the location of the lines and corners of the boundaries of
the lots constituting the Standish Properties. None of the Standish Permitted
Encumbrances has or is likely to have a material adverse impact upon, nor
interfere with or impede, in any material respect, the conduct of the business
of the Standish Properties as currently conducted. Except as set forth in
Schedule 3.11(c) of the Standish Disclosure Schedule, none of the Standish
Improvements (i) encroaches onto adjoining lands or (ii) encroaches on or over
any easements or rights of way included in the Standish Permitted Encumbrances
or (iii) violates any building setback lines on a plat of subdivision or filed
in the public records, in each case in a manner that adversely effects the value
of any Standish Property. There are no encroachments onto the Standish
Properties of any building, structure, or other improvement located on adjoining
property.
(d) Listed on Schedule 3.11(d) of the Standish Disclosure Schedule are
all of the leases, including all amendments and modifications thereto and any
letter agreements, memoranda of leases, notices of lease, nondisturbance
agreements pertaining thereto, pursuant to which Standish or the Standish
Subsidiaries occupy all or any portion of the locations constituting the
Standish Properties (such leases are herein referred to as the "Standish
Occupancy Leases", and such locations are herein referred to as the "Standish
Leased Locations"). The rent, term, extension options, additional charges and
other material terms set forth for each of the Standish Leased Locations are set
forth on Schedule 3.11(d) of the Standish Disclosure Schedule. There is no
default by either the respective landlord or Standish (or the applicable
Standish Subsidiary) under any of the Standish Occupancy Leases or by the
respective landlord under any financing documents relating to any Standish
Property which is the subject of a Standish Occupancy Lease, either asserted by
written notice or known to Standish, nor, to the best of Standish's knowledge,
any condition which, with the giving of notice or the lapse of time, or both,
would constitute a payment default or other material default, and there are no
monetary obligations of Standish or any Standish Subsidiary under any Standish
Occupancy Lease or such financing documents which are, as of the date hereof,
due and unpaid. Standish and the Standish Subsidiaries have posted security
deposits for the performance of their obligations under the Standish Occupancy
Leases, as set forth on Schedule 3.11(d) of the Standish Disclosure Schedule,
and there are no claims or charges against such security deposits which have
been or, to the best of Standish's knowledge, may be asserted.
(e) There are no leases, subleases, tenancies, licenses, occupancy
agreements or other agreements pursuant to which parties other than Standish or
the Standish Subsidiaries
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hold rights to use or occupy all or any portion of the Standish Properties (such
leases, subleases, tenancies, licenses, occupancy agreements and other
agreements are herein referred to as the "Standish Tenant Leases").
(f) Neither Standish nor any Standish Subsidiary is in default, nor do
any circumstances exist which, with notice or the passage of time, or both,
would give rise to a default under any of the documents, recorded or unrecorded,
relating to the Standish Properties or with respect to any contractual
obligations that would have a material adverse effect on the Standish
Properties.
(g) Schedule 3.11(g) of the Standish Disclosure Schedule is a true and
complete schedule of all contractual obligations that involve payments or
receipts by Standish or the Standish Subsidiaries of more than $5,000 in any
single case, relative to the ongoing construction, maintenance, security, or
operations of the Standish Properties excluding, however, warranties and
guaranties, showing as to each of the contractual obligations: (i) date of the
contractual obligation and each amendment thereof; (ii) name of vendor; (iii)
type of service; (iv) termination date of the contractual obligation; (v) the
basis for calculating amounts to become due thereunder; and (vi) whether and
upon what terms either party may terminate such agreement without cause.
(h) Except as set forth in Schedule 3.11(h) of the Standish Disclosure
Schedule, Standish has not been advised of and is not aware of any defect in the
condition of the Standish Properties, or any portion thereof, which has not been
corrected and which will materially impair the operation of the Standish
Properties as presently operated or as proposed to be operated. Standish has not
been advised of and is not aware of any material defect in the Standish
Improvements, the structural elements thereof, the mechanical systems (including
without limitation all heating, ventilating, air conditioning, plumbing,
electrical, elevator, security, utility and sprinkler systems) therein, the
roofs or the parking and loading areas. The construction of all of the Standish
Improvements has been fully completed, and, except as set forth in Schedule
3.11(h) of the Standish Disclosure Schedule, all sums owing on account thereof
have been paid in full.
(i) All water, sewer, gas, electric, telephone, drainage and other
utility equipment, facilities and services required by Law or necessary for the
proper operation of the Standish Properties and the Standish Improvements as
they are now being operated are installed and connected to the Standish
Improvements pursuant to valid permits, are adequate to service the Standish
Improvements and are in good operating condition. To the best of Standish's
knowledge, no fact, condition, or proceeding exists which would result in the
termination or impairment of the furnishing of services to the Standish
Properties of water, sewer, gas, electric, telephone, drainage and other such
utility services.
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(j) Except as set forth on Schedule 3.11(j), the Standish Improvements
are free from infestation by rodents, termites or other insects or animals.
(k) To the best of Standish's knowledge, the Standish Improvements were
completed and installed in accordance with plans, which were approved by all
governmental authorities having jurisdiction thereof. Standish has delivered to
CareMatrix true, correct and complete copies of those drawings or plans as are
currently in Standish's possession and which depict the Standish Properties and
Standish Improvements as built (the "Standish Plans"). There is legal and
adequate access to the Standish Properties at all points so identified in the
Standish Plans and such access is directly from the Standish Properties onto
public ways as so identified, and not by means of any lease, license, easement
or other agreement. All Standish Improvements constructed by Standish or any
Standish Subsidiary on any portion of the Standish Properties affected by any
Standish Occupancy Lease are in accordance with Standish Occupancy Lease
requirements.
(l) Listed on Schedule 3.11(l) of the Standish Disclosure Schedule is a
true and complete list of all written warranties and guaranties held by Standish
or any Standish Subsidiary with respect to the Standish Properties and the
Standish Improvements, including all Standish Tangible Personal Property
relating thereto. Expiration dates of each warranty are shown on Schedule
3.11(l).
(m) There are no pending or, to the best of Standish's knowledge,
threatened requests, applications or proceedings to alter or restrict the zoning
or other use restrictions applicable to the Standish Properties. Neither
Standish nor any Standish Subsidiary has received notice from any municipal,
state, federal or other governmental authority of violations of any Law issued
in respect of the Standish Properties which have not been heretofore corrected,
and, to the best of Standish's knowledge, no such violations exist. The Standish
Improvements and the present uses are permitted, conforming structures and uses
as a matter of right and not pursuant to any "grandfathered" or non-conforming
structure or use status or pursuant to any variance, special permit, license or
other approval. Standish has not received notice of and is not aware of any
plan, study or effort by any governmental agency or authority which would
materially adversely affect the present use or zoning of the Standish Properties
or which would modify or realign any adjacent street or highway.
(n) There are presently in effect all licenses, permits, approvals and
other authorizations necessary for the current use, occupancy and operation of
the Standish Properties. Such licenses, permits, approvals and other
authorizations are listed in Schedule 3.11(n) of the Standish Disclosure
Schedule hereto. No such license, permit, approval or other authorization (i)
contains any restrictions or conditions that would have a material adverse
effect on the Standish Properties or (ii) is subject to any "linkage" or similar
obligation. All applicable fees currently due and payable with respect thereto
have been paid in full (and no fees or other payments with respect thereto shall
accrue or become due and
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payable in the future). All of such licenses, permits, approvals and other
authorizations are in full force and effect and shall remain in effect
indefinitely subject to the conditions contained therein, without expiration or
need of renewal thereof.
(o) To the best knowledge of Standish, the soil condition of the
Standish Owned Locations is such that it will support all of the Standish
Improvements thereon for the foreseeable life of such Standish Improvements
without the need for unusual or new subsurface excavations, fill, footings,
caissons or other installations. The Standish Improvements on the Standish Owned
Locations, as built, were constructed in a manner compatible with the soil
conditions at the time of construction and to the best knowledge of Standish,
all necessary excavations, fill, footings, caissons or other installations were
provided. Except as set forth in Schedule 3.11(o) of the Standish Disclosure
Schedule, none of the Standish Improvements is located in an area designated by
the Federal Insurance Administration or any other governmental authority having
jurisdiction over the Standish Properties as having special flood or mud slide
hazards or being within the 100-year flood plan.
(p) There are no pending or threatened condemnation or similar
proceedings or assessments affecting any of the Standish Properties, nor to the
best of Standish's knowledge, is any such condemnation or assessment
contemplated by any governmental authority.
3.12 Licenses and Permits. Schedule 3.12 of the Standish
Disclosure Schedule lists all licenses, permits, pending applications, consents,
approvals and authorizations of or from any public or governmental agency, held
by Standish and each Standish Subsidiary or used in or otherwise necessary for
the conduct of the business operations of Standish and the Standish Subsidiaries
(the "Standish Business") (collectively, the "Permits") together with any
conditions imposed thereon. Standish and the Standish Subsidiaries have complied
with all conditions and requirements imposed by the Permits and neither Standish
nor any Standish Subsidiary has received any notice of, or has any reason to
believe, that any appropriate authority intends to cancel, terminate or suspend
any of the Permits or that valid grounds for such cancellation, termination or
suspension exist. Except as set forth on Schedule 3.12 of the Standish
Disclosure Schedule, no other permits other than the Permits are necessary to
operate the Standish Business. Standish and the Standish Subsidiaries own or
have the right to use the Permits in accordance with the terms thereof without
any conflict or alleged conflict or infringement with the rights of others and
subject to no Claim. Each Permit is and immediately after the Merger will be
valid and in full force and effect and no Permit will be subject to termination
or be terminated or adversely affected by the Merger.
3.13 Intellectual Property. Standish and the Standish
Subsidiaries own, or are licensed or otherwise have the full and unrestricted
right to use, all patents, trademarks, trade names, copyrights, technology,
know-how, trade secrets, processes, formulas and
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techniques used in connection with the operation of the Standish Business
(collectively, the "Intellectual Property") and all Intellectual Property is
described or listed in Schedule 3.13 of the Standish Disclosure Schedule, except
trade secrets which have been separately disclosed to CareMatrix. Neither
Standish nor any Standish Subsidiary has granted to any other person any license
or other right to use in any manner any of the Intellectual Property, whether or
not requiring the payment of royalties. To the best knowledge of Standish (i) no
other person has a right or license granted directly or indirectly by or through
Standish or any Standish Subsidiary to use any Intellectual Property; (ii) none
of the Intellectual Property is being infringed by others, or is subject to any
outstanding order, decree, judgment or stipulation; and (iii) there are no
claims or demands of any other person, and no proceedings have been instituted,
or are pending or, to the best knowledge of Standish, threatened, relating to
the Intellectual Property.
3.14 Outstanding Commitments. Schedule 3.14 of the Standish
Disclosure Schedule sets forth a list and description of all existing contracts,
agreements, leases and subleases (other than Standish Occupancy Leases and
Standish Tenant Leases), commitments, licenses and franchises that involve
payments or receipts by Standish or any Standish Subsidiary of more than $5,000
in any single case (collectively, the "Standish Contracts"), whether written or
oral, to which Standish or any Standish Subsidiary is a party or which relate to
the Standish Business. Standish has delivered or made available to CareMatrix
true, correct and complete copies of all written Standish Contracts and Schedule
3.14(a) of the Standish Disclosure Schedule contains an accurate and complete
description of all Standish Contracts which are not in writing. All of the
Standish Contracts are in full force and effect except as set forth in Schedule
3.14(b) of the Standish Disclosure Schedule. Standish and each Standish
Subsidiary which is a party to and each other party to each of the Standish
Contracts have performed all the material obligations required to be performed
by them to date, and there is not under any of the Standish Contracts any
existing default or event of default or event which with notice or lapse of time
or both would constitute such a default. Neither Standish nor any Standish
Subsidiary has (i) any present expectation or intention of not fully performing
all its obligations under each of the Standish Contracts to which it is a party
or (ii) except as set forth on Schedule 3.14(b) of the Standish Disclosure
Schedule, any knowledge of any breach or anticipated breach by any other party
to any of the Standish Contracts. Except as set forth in Schedule 3.14(b) of the
Standish Disclosure Schedule, none of the Standish Contracts has been terminated
or notice of termination given with respect thereto, no notice has been given by
any party thereto of any alleged default thereunder by any party thereto, and
neither Standish nor any Standish Subsidiary is aware of any intention or right
of any party to any Standish Contract to default another party to any Standish
Contract. Except as set forth in Schedule 3.14(b) of the Standish Disclosure
Schedule, there exists no actual or, to the best knowledge of Standish,
threatened termination, cancellation or limitation of the business relationship
of Standish or any Standish Subsidiary with any party to any Standish Contract.
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3.15 Litigation. Except as set forth on Schedule 3.15 of the
Standish Disclosure Schedule, there is no (i) action, suit, claim, proceeding or
investigation pending or, to the best of Standish's knowledge, threatened
against or affecting Standish or any Standish Subsidiary (whether or not
Standish or any Standish Subsidiary is a party or prospective party thereto), at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (ii) pending or, to the best of Standish's knowledge,
threatened arbitration proceeding relating to Standish or any Standish
Subsidiary or (iii) governmental inquiry pending or, to the best of Standish's
knowledge, threatened against or involving Standish or any Standish Subsidiary,
and there is no basis for any of the foregoing. Except for item 5 on Schedule
3.15 of the Standish Disclosure Statement, any potential liability arising from
any such action, suit, claim, proceeding or investigation is fully covered by
insurance or will not have a material adverse impact on Standish. Except as set
forth on Schedule 3.15 of the Standish Disclosure Schedule, neither Standish nor
any Standish Subsidiary has received any opinion or memorandum or legal advice
from legal counsel to the effect that it is exposed, from a legal standpoint, to
any liability or disadvantage which may be material to the prospects, financial
condition, operations, property or affairs of the Standish Business. Except as
set forth on Schedule 3.15 of the Standish Disclosure Schedule, there are no
outstanding orders, writs, judgments, injunctions or decrees of any court,
governmental agency or arbitral tribunal against, involving or affecting
Standish or any Standish Subsidiary, and there are no facts or circumstances
which may result in institution of any action, suit, claim or legal,
administrative or arbitration proceeding or investigation against, involving or
affecting Standish or any Standish Subsidiary, their assets or properties, or
the Merger or the transactions contemplated hereby. Neither Standish nor any
Standish Subsidiary is in default with respect to any order, writ, injunction or
decree known to or served upon it from any court or of any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign. Except as set forth on Schedule 3.15 of
the Standish Disclosure Schedule, there is no action, suit or proceeding by
Standish or any Standish Subsidiary or their affiliates pending or threatened
against others. Except as set forth on Schedule 3.15 of the Standish Disclosure
Schedule, none of the following has occurred within five (5) years prior to the
date hereof with respect to Standish or any Standish Subsidiary:
(a) Neither Standish nor any Standish Subsidiary nor, to their
best knowledge, any current employee thereof, has been convicted in a
criminal proceeding or has been named or is a subject of a criminal,
governmental or other regulatory investigatory proceeding (excluding
traffic violations);
(b) Neither Standish nor any Standish Subsidiary nor, to their
best knowledge, any current employee thereof, has been or is the
subject of any order, judgment or decree of any court, governmental
agency or other regulatory body
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permanently or temporarily enjoining, barring, suspending or limiting
it or any such person from engaging in any type of business or
professional practice or activities; or
(c) Neither Standish nor any Standish Subsidiary nor, to their
best knowledge, any current employee thereof, has been found by a court
of competent jurisdiction in a civil action or by any governmental
agency or other regulatory body to have violated any Law.
3.16 Compliance with Law. Except as set forth in Schedule 3.16
of the Standish Disclosure Schedule, neither Standish nor any Standish
Subsidiary is subject to any judgment, order, writ, injunction or decree and
Standish and each Standish Subsidiary have complied with and are not in default
under, all laws, ordinances, legal requirements, rules, regulations and orders
applicable to it, its operations, properties, assets, products and services,
including, without limitation, the Medicare and Medicaid Patient and Program
Protection Act of 1987 and the Omnibus Budget Reconciliation Act of 1993. There
is no existing law, rule, regulation or order, and Standish is not aware of any
proposed law, rule, regulation or order, whether federal or state, which would
prohibit or materially restrict Standish and the Standish Subsidiaries from, or
otherwise materially adversely affect Standish and the Standish Subsidiaries in,
conducting the Standish Business.
3.17 Labor and Employee Relations. Neither Standish nor any
Standish Subsidiary is a party to or bound by any collective bargaining
agreement with any labor organization, group or association covering any of its
employees, and Standish has no knowledge of any attempt to organize any of their
employees by any person, unit or group seeking to act as their bargaining agent.
Except as set forth in Schedule 3.17 of the Standish Disclosure Schedule, there
are no pending or threatened charges (by employees, their representatives or
governmental authorities) of unfair labor practices or of employment
discrimination or of any other wrongful action with respect to any aspect of
employment of any employee of Standish or any Standish Subsidiary.
3.18 Certain Employees. Set forth on Schedule 3.18 is a list
of the names of all of the key employees and consultants currently employed by
Standish or any Standish Subsidiary in connection with the Standish Business,
together with the title or job classification of each such person and his or her
current compensation. Except as set forth on Schedule 3.18 of the Standish
Disclosure Schedule, none of such persons has (i) an employment agreement or
understanding, whether oral or written, with Standish or any Standish Subsidiary
which is not terminable on thirty (30) days or less notice by Standish or any
Standish Subsidiary without cost or other liability to Standish or any Standish
Subsidiary or (ii) a non-competition, non-disclosure and/or non-solicitation
agreement or understanding with Standish or any Standish Subsidiary, whether
written or oral, and all such employment and other agreements are set forth in
Schedule 3.18 of the Standish Disclosure Schedule hereto. Each person listed on
Schedule 3.18 of the Standish Disclosure Schedule who is
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required to be licensed by applicable state law in order to perform his or her
duties is so licensed. Set forth on Schedule 3.18 of the Standish Disclosure
Schedule is the amount, if any, of any severance liability of Standish or any
Standish Subsidiary with respect to each person listed on Schedule 3.18.
3.19 Employee Benefits. Set forth on Schedule 3.19 of the
Standish Disclosure Schedule is a list of all pension, profit sharing,
retirement, deferred compensation, stock purchase, stock option, incentive,
bonus, vacation, severance, disability, hospitalization, medical insurance, life
insurance, fringe benefit, welfare and other employee benefit plans, programs or
arrangements, whether formal or informal, oral or written, under which employees
of Standish or any Standish Subsidiary may be entitled to benefits or Standish
or any Standish Subsidiary may have any liability (collectively, the "Standish
Plans"). Through the Closing Date all such Standish Plans shall be maintained by
Standish or each Standish Subsidiary in full force and effect. Neither Standish
nor any Standish Subsidiary contributes, or has ever been required to
contribute, to any plan subject to Title IV of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or to any multiemployer plan, as
defined in section 3(37) or section 4001(a)(3) of ERISA.
Each Standish Plan has been established and administered in
accordance with its terms and in compliance with the applicable provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), ERISA and other
applicable laws, rules and regulations. Each Standish Plan which is intended to
be qualified within the meaning of section 401(a) of the Code is so qualified
and has received a favorable determination letter with respect to its
qualification and, to the best knowledge of Standish, no event has occurred
which would cause the loss of such qualification. Each Standish Plan which is
intended to meet the requirements for tax-favored treatment under Subchapter B
of Chapter 1 of Subtitle A of the Code meets such requirements.
With respect to each Standish Plan, no actions, suits or
claims (other than claims for benefits in the ordinary course) are pending or
threatened, and no facts or circumstances exist which could give rise to any
such actions, suits or claims. Neither Standish, any Standish Subsidiary nor any
other party has engaged in a prohibited transaction, as defined under section
4975 of the Code or section 406 of ERISA, with respect to any Standish Plan, and
no fiduciary with respect to any Standish Plan has, to the best knowledge of
Standish, breached any fiduciary duty to such Standish Plan under Part 4 of
Title I of ERISA or other applicable law. No event has occurred and no condition
exists that would subject Standish or any Standish Subsidiary to any tax, fine
or penalty imposed by the Code, ERISA or other applicable law. All required
contributions have been made by Standish to each of the Plans and there is no
funding deficiency with respect to any of the Standish Plans. Each Standish Plan
may be amended or terminated in accordance with its terms without obligation or
liability, other than those obligations and liabilities for which specific
assets have been set aside or reserved for on the balance sheet as of the March
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Balance Sheet Date included in the Financial Statements of Standish and those
obligations and liabilities reflected by the terms of the Standish Plan
documents. There are no unfunded obligations under any Standish Plan providing
benefits to employees of Standish or any Standish Subsidiary during employment
or after termination of their employment.
3.20 Insurance. Standish is, and will be through the Closing
Date, adequately insured with responsible insurers in respect of their
properties, assets and business against risks normally insured against by
companies in similar lines of business under similar circumstances. Schedule
3.20 of the Standish Disclosure Schedule correctly describes (by type, carrier,
policy number, limits, premium and expiration date) the insurance coverage
carried by Standish and the Standish Subsidiaries with respect to the Standish
Business, which insurance will remain in full force and effect with respect to
all events occurring prior to the Closing. Standish and the Standish
Subsidiaries (i) have not failed to give any notice or present any claim under
any such policy or binder in due and timely fashion, (ii) have not received
notice of cancellation or non-renewal of any such policy or binder, (iii) are
not aware of any threatened or proposed cancellation or non-renewal of any such
policy or binder and (iv) have not received notice of and are not otherwise
aware of any insurance premiums which will be materially increased in the
future. There are no outstanding claims under any such policy which have gone
unpaid for more than forty-five (45) days, or as to which the insurer has
disclaimed liability.
3.21 Transactions With Affiliates. Except as contemplated by
this Agreement and except as set forth in Schedule 3.21 of the Standish
Disclosure Schedule and only with respect to transactions giving rise to current
or contingent liabilities of Standish or any Standish Subsidiary, no current or
former holder of 5% or more of any class of capital stock of Standish or any
Standish Subsidiary at the time such transaction was entered into, or any
director, officer or employee of Standish or any Standish Subsidiary, or member
of the family of any such person, or any corporation, partnership, trust or
other entity in which any such person, or any member of the family of any such
person, has an interest or is an officer, director, trustee, partner or holder
of any equity interest, is a party to any transaction with Standish or any
Standish Subsidiary, including any contract, agreement or other arrangement
providing for the employment of, furnishing of services by, rental of real or
personal property from, or otherwise requiring payments or involving other
obligations to or from such person.
3.22 Taxes. Except as set forth in Schedule 3.22 of the
Standish Disclosure Schedule, Standish and the Standish Subsidiaries have filed
all tax returns and reports required to be filed, including without limitation,
returns and estimated returns, with respect to federal, state, foreign and local
taxes, and, except as set forth in Schedule 3.22 of the Standish Disclosure
Schedule, have paid in full all taxes shown due thereon and all estimated taxes
when due (together with all interest, penalties, assessments and deficiencies
assessed in connection therewith due through the date hereof). Neither Standish
nor any Standish
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Subsidiary is required to pay any other taxes except as shown in such tax
returns, reports and information filings. All such returns, reports, and
information filings required to be filed, including any amendments to date, have
been prepared in good faith and without negligence or misrepresentation.
Standish and each Standish Subsidiary has either paid or, in accordance with
GAAP applied consistently with prior periods, adequately provided for, by
reserves or other proper accounting treatment shown in the records and books of
account, its liability for all taxes of every kind, including without
limitation, its liability for federal, state and municipal income or franchise
tax for the current tax year and for all prior years. Standish has no knowledge
of any proposed or threatened assessment or reassessment of federal, state or
municipal income or franchise taxes. The United States federal income tax
returns of Standish have been examined by the Internal Revenue Service for all
taxable years through and including the fiscal year ended December 31, 1994. In
addition, at the date hereof, Standish and the Standish Subsidiaries have
deducted and remitted all withholding tax or source deductions when due to the
appropriate governmental authority as required by law or Standish and the
Standish Subsidiaries have adequately provided for such deductions by reserves
or other proper accounting treatment their books and records of account. Neither
Standish nor any Standish Subsidiary (i) has executed any waiver to extend, or
otherwise taken or failed to take any action that would have the effect of
extending, the applicable statute of limitations with respect to its tax
liabilities, (ii) is a "consenting corporation" within the meaning of Section
341(f) of the Code, (iii) has been at any time taxable as other than Subchapter
C corporation under the Code or has failed to file all tax returns consistent
with this characterization, (iv) has been a member of any consolidated group
(other than with Standish and the Standish Subsidiaries) for tax purposes or (v)
does not have, or will fail to have, all records and information necessary for
the timely and accurate filing of any tax returns due after the date hereof,
including any returns due after the Closing Date which relate to the period
prior to the Closing Date.
3.23 Brokers. No agent, person or firm acting on behalf of
Standish and the Standish Subsidiaries or under their authority is or will be
entitled to a financial advisory fee, brokerage commission, finder's fee or like
payment in connection with the transactions contemplated hereby, except Prager,
McCarthy & Sealy and Stonebridge Associates L.L.C. (the "Standish Financial
Advisors"), and Standish shall bear sole responsibility for the payment of all
fees of the Standish Financial Advisors in connection with the transactions
contemplated hereby, which shall not exceed $200,000 plus reasonable out of
pocket costs.
3.24 Environmental Laws.
(a) Standish and the Standish Subsidiaries have operated and continue
to operate the Standish Facilities and the Standish Business in compliance with
all Laws (as hereinafter defined) relating to (i) pollution or protection of the
environment, natural resources or human health from any Hazardous Substances (as
hereinafter defined) or (ii) nuisance, trespass or "toxic tort", including,
without limitation, Laws relating to emissions, discharges, releases or
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threatened releases of any Hazardous Substance or otherwise relating to the
manufacture, processing, importation, distribution, use, generation, treatment,
storage, disposal, transportation or handling of any Hazardous Substance
(collectively, "Environmental Laws").
(b) No Standish Property nor, to the best knowledge of Standish, any
real property contiguous thereto, is or has been designated by any state, local
or federal agency or body as a hazardous waste disposal site or a site or
location requiring investigation concerning, or management, clean-up or removal
of, any Hazardous Substance.
(c) There is no civil, criminal or investigative action, suit,
litigation, hearing, communication (written or oral), demand, claim, citation,
notice or notice of violation, warning, consent decree, judgment or order by any
person or entity alleging, claiming, concerning or finding liability or
potential liability arising out of, based on or resulting from, in whole or in
part, (a) the actual or alleged presence, threatened release, release, emission,
disposal, storage, treatment, transportation, generation, manufacture or use of
any Hazardous Substance at or from any location or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Laws
(collectively, "Environmental Claims"), pending or, to the best knowledge of
Standish, threatened against Standish or any Standish Subsidiary or against any
person or entity whose liability for any Environmental Claim Standish or any
Standish Subsidiary has or may have retained or assumed either contractually or
by operation of law. There are no past or present actions, activities,
circumstances, conditions, events, incidents or practices, including, without
limitation, the release, threatened release, emission, discharge, disposal,
storage, treatment, transportation, generation, manufacture or use of any
Hazardous Substance that could form the basis of any Environmental Claim against
Standish or any Standish Subsidiary or, to Standish's best knowledge, against
any person or entity whose liability for any Environmental Claim Standish or any
Standish Subsidiary has or may have retained or assumed either contractually or
by operation of law.
(d) All Waste (as hereinafter defined) generated in connection with the
business, operations, assets and properties of Standish and the Standish
Subsidiaries has been (i) treated, stored or disposed of by or at facilities
duly licensed pursuant to applicable Environmental Laws and (ii) transported to
such facilities by transporters duly licensed pursuant to applicable
Environmental Laws. Standish has maintained true and complete records relating
to the generation, transportation, treatment, storage and disposal of Waste
generated in connection with the business, operations, assets and properties of
Standish and the Standish Subsidiaries.
(e) Standish has delivered to CareMatrix all environmental inspection
reports ("Environmental Reports") in the possession of Standish or its past or
present consultants or advisors or those reports as have been prepared by any
person or entity concerning compliance with applicable Environmental Laws of
Standish's business, operations, assets or
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properties or the use, manufacture, importation, processing, storage, treatment,
transportation, release or disposal therefrom, therein or thereon of any
Hazardous Substance and as are listed on Schedule 3.24 of the Standish
Disclosure Schedule.
(f) As used herein, "Hazardous Substance" means any chemical,
pollutant, contaminant, waste (including, without limitation, toxic, hazardous,
infectious, sanitary, solid, radioactive and petroleum waste collectively,
"Waste"), toxic substance, hazardous substance, extremely hazardous substance,
hazardous material, radioactive material, oil and petroleum product, as such
terms, or any similar terms, are or shall be used under any applicable federal,
state, local and foreign laws, regulations, rules, ordinances, permits
(including, without limitation, authorizations, approvals, registrations and
licenses), administrative orders, judicial decisions or the like (all,
collectively, "Laws") relating to pollution or protection of the environment,
natural resources or human health.
3.25 Corporate Records. The corporate record books of Standish
and each Standish Subsidiary are in good order, complete, accurate, up to date,
with all necessary signatures, and set forth all meetings and actions taken by
the stockholders and directors, and all votes of the stockholders or directors
set forth in certificates furnished to anyone at any time heretofore.
3.26 Accounts Receivable. Except as set forth in Schedule 3.26
of the Standish Disclosure Schedule, all of the accounts receivable of Standish
and the Standish Subsidiaries shown or reflected on the most recent balance
sheet in the Financial Statements, less the reserve for doubtful accounts in the
amount shown on such balance sheet, are valid and enforceable claims and subject
to no setoff or counterclaim. Standish has no accounts or loans receivable from
any of its directors, officers or employees in excess of $7,500 in the
aggregate.
3.27 Proxy Statement. The Proxy Statement to be mailed to
stockholders of Standish in connection with the solicitation of proxies on
behalf of Standish's Board of Directors for the meeting of stockholders of
Standish to be held to seek the approval of this Agreement and the Merger (the
"Proxy Statement"), at the time of its mailing to such stockholders and at the
time of such meeting, will not contain any untrue statement of a material fact
or omit to state a material fact concerning Standish, the Standish Subsidiaries
or the Merger or omit to state a material fact required or necessary to be
stated therein in order to make the statements contained therein concerning
Standish, the Standish Subsidiaries or the Merger, in light of the circumstances
under which they are made, not misleading; except that, Standish makes no
representation or warranty with respect to any statement, information or
omission relating to CareMatrix or its affiliates provided to Standish in
writing for inclusion in the Proxy Statement. The Form S-4 Registration
Statement, at the time of its effectiveness and thereafter, will not contain any
untrue statement of a material fact or omit to state a material fact concerning
Standish, the Standish Subsidiaries or the Merger or omit
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to state a material fact required or necessary to be stated therein in order to
make the statements contained therein concerning Standish, the Standish
Subsidiaries or the Merger, in light of the circumstances under which they are
made, not misleading; except that, Standish makes no representation or warranty
with respect to any statement, information or omission relating to CareMatrix or
its affiliates provided to Standish in writing for inclusion in the Form S-4
Registration Statement.
3.28 Certain Practices. Standish and the Standish Subsidiaries
have complied with any and all rules, regulations, policies and procedures of
third party payors with respect to billing for services. Neither Standish, any
Standish Subsidiary nor any stockholder, director, officer, or employee of
Standish or any Standish Subsidiary has, directly or indirectly, given or agreed
to give remuneration, in cash or in kind, in order to induce business
reimbursable under Medicare, Medicaid or any health care insurer or provider
which could subject Standish or any Standish Subsidiary to any damage or penalty
in any civil, criminal or governmental litigation or proceeding. Neither
Standish nor any Standish Subsidiary has at any time established or maintained
any fund or asset for any illegal purpose or made any false entries or any books
or records for any reason.
3.29 Disclosure. All documents and schedules delivered or to
be delivered by or on behalf of Standish and each Standish Subsidiary in
connection with this Agreement, the Merger and the transactions contemplated
hereby are true, complete and correct. Neither this Agreement, nor any Schedule
or Exhibit to this Agreement contains any untrue statement by Standish of a
material fact or an omission by Standish of a material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which made, not misleading.
3.30 Contracts and Other Documents. Except for those
contracts, agreements, license agreements, vendor agreements, purchase orders,
commitments, sales orders, supply arrangements and other agreements which are
listed in the Standish Disclosure Schedule (collectively, the "Contracts") or
which have been entered into by Standish in the ordinary course of business and
do not involve payment or receipt of more than $10,000.00, and those Leases in
the Standish Disclosure Schedule , Standish is not party to any Contract, Lease
or similar document. All the Contracts are valid, binding and enforceable and in
full force and effect, and there are no (i) notices of violation or (ii)
existing material defaults (or events that, with notice or lapse of time or
both, would constitute material defaults) on the part of Standish or to the
knowledge of Standish on the part of any other party thereto. Copies of the
Contracts have been heretofore delivered to CareMatrix by Standish or its
counsel and such copies are true and complete and include all amendments,
supplements and modifications thereto; each such Contract will be subject to
obtaining any consent listed in the Standish Disclosure Schedule and will
continue to be in full force and effect on the same terms and conditions
immediately after the Closing without the need for any action on the part of
CareMatrix.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE CAREMATRIX CORPORATIONS
Each of the CareMatrix Corporations represents and warrants to Standish
and the Acquisition Corporations as follows:
4.1 Organization and Qualification. Each of the CareMatrix
Corporations is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware (except for A.M.A. New Jersey
Development, Inc. which is duly organized, validly existing and in good standing
under the laws of the State of New Jersey) and is qualified as a foreign
corporation in each jurisdiction where it is required to be so qualified except
where the failure to be so qualified would not, individually or in the
aggregate, cause a Material Adverse Change with respect to CareMatrix.
4.2 The Subsidiaries of CareMatrix. CareMatrix does not
control directly or indirectly or have any direct or indirect equity
participation in any corporation. Except as set forth on Schedule 4.2 of the
separate Disclosure Schedule to be delivered by CareMatrix to, and approved by,
Standish on or before July 9, 1996 (the "CareMatrix Disclosure Schedule"),
CareMatrix does not control directly or indirectly or have any direct or
indirect equity participation in any partnership, joint venture, trust or other
business association.
4.3 Capitalization. The authorized capital stock of each of
the CareMatrix Corporations consists of 5,000 shares of CareMatrix Common Stock,
of which 5,000 shares are outstanding, except that the authorized and
outstanding shares of CCC of Maryland, Inc. are 3,000 and 1,000, respectively,
and the authorized and outstanding shares of A.M.A. New Jersey Development, Inc.
are 20,000 and 11,710, respectively. The authorized and outstanding capital
stock of CareMatrix may be increased prior to the Effective Date and CareMatrix
will promptly notify Standish of any such increase. Schedule 4.3 sets forth a
list of the beneficial and record owners of the issued and outstanding shares of
Common Stock of each CareMatrix Corporation and their affiliation or
association, if any, with CareMatrix. All of the outstanding shares of
CareMatrix Common Stock have been validly issued and are fully-paid and
nonassessable. Except as set forth on Schedule 4.3 of the CareMatrix Disclosure
Schedule, there are outstanding no options, warrants, rights, or other
agreements or commitments obligating any CareMatrix Corporation to issue or sell
shares of its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock. The CareMatrix Corporations
are not obligated directly, indirectly or contingently to purchase or redeem any
shares of CareMatrix Common Stock.
4.4 Corporate Power and Authority. The CareMatrix Corporations
have full corporate or partnership power and authority to carry on their
businesses as now being conducted in the jurisdictions where such businesses are
now conducted and to operate and
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lease the CareMatrix Leased Properties. This Agreement, the Merger and the other
transactions contemplated hereby have been duly and unanimously approved by the
Board of Directors and stockholders of each CareMatrix Corporation. The
CareMatrix Corporations has full corporate power and authority to enter into
this Agreement and to consummate the Merger and the other transactions
contemplated hereby, and this Agreement and each of the other agreements to be
executed and delivered by any CareMatrix Corporation in connection herewith
constitute the legal, valid and binding obligations of such corporation
enforceable against it in accordance with their respective terms.
4.5 No Violation. Neither the execution and delivery of this
Agreement and the other documents and instruments contemplated hereby and the
consummation of the Merger and the other transactions contemplated hereby, nor
the performance of this Agreement and such other documents and instruments in
compliance with the terms and conditions hereof and thereof, except as set forth
in Schedule 4.5 of the CareMatrix Disclosure Schedule, will (i) violate,
conflict with or result in any breach of any trust agreement, charter document,
by-law, judgment, decree, order, statute or regulation applicable to CareMatrix,
(ii) violate, conflict with or result in a breach, default or termination or
give rise to any right of termination, cancellation or acceleration of the
maturity of any payment date of any obligation of CareMatrix or increase or
otherwise affect the obligations of CareMatrix under any law, rule, regulation
or any judgment, decree, order, governmental permit, license or order or any of
the terms, conditions or provisions of any mortgage, indenture, note, license,
agreement or other instrument or obligation related to CareMatrix or to
CareMatrix's ability to consummate the Merger and the other transactions
contemplated hereby, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or consents, in form
and substance satisfactory to Standish, have been or will be obtained in writing
and provided to Standish at or prior to the Closing, (iii) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to CareMatrix
or (iv) result in the creation of any Claim upon or against the properties of
CareMatrix.
4.6 Financial Statements. CareMatrix has delivered to Standish
internally prepared combined unaudited financial statements of the CareMatrix
Corporations as of December 31, 1995 and for the year then ended and combined
unaudited financial statements of the CareMatrix Corporations as of May 31, 1996
(the "May Balance Sheet Date") and for the five months then ended (the
"CareMatrix Financial Statements"). The CareMatrix Financial Statements fairly
present the historical combined financial position of the CareMatrix
Corporations as of their respective dates and accurately set forth the results
of operations for the periods presented therein, as the case may be, all in
conformity with GAAP, consistently applied, of the CareMatrix Corporations,
except as otherwise noted therein. Any financial statements prepared by
CareMatrix after the May 31, 1996 financial statements will be prepared in
accordance with GAAP, consistently applied, and will fairly present the
financial position as of their respective dates and accurately set forth the
results
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of operations for the periods presented therein, of CareMatrix, except as
otherwise noted therein.
4.7 Absence of Undisclosed Liabilities. Except as set forth or
reserved against in the balance sheet (the "CareMatrix Balance Sheet") as of the
May Balance Sheet Date included in the CareMatrix Financial Statements,
CareMatrix (i) did not have as of the May Balance Sheet Date any liability or
obligation of any nature, whether accrued, absolute, contingent, or otherwise
and whether due or to become due, including without limitation liabilities that
may become known or arise after the date hereof and which relate to transactions
entered into or any state of facts existing on or before the May Balance Sheet
Date, which would be required under GAAP to be shown in such balance sheet, and
(ii) except for its obligation to make the CareMatrix Working Capital Loan
contemporaneously with the execution and delivery of this Agreement and as shown
on Schedule 4.7 of the CareMatrix Disclosure Statement has not incurred since
the May Balance Sheet Date any such liability or obligation except in the
ordinary course of business.
4.8 Conduct of Business Since the May Balance Sheet Date.
Since the May Balance Sheet Date, except as set forth on Schedule 4.8(a) of the
CareMatrix Disclosure Schedule, there has been no Material Adverse Change with
respect to CareMatrix, and no such Material Adverse Change is threatened,
contemplated or anticipated. As used in this Section 4.8, "Material adverse
change in the Financial Condition of CareMatrix" shall mean an increase of more
than $7,500,000 in the Due to Shareholder of CareMatrix from the Net Working
Capital (Deficit) as of the May Balance Sheet Date to the Due to Shareholder as
of the last day of the calendar month immediately preceding the Closing Date
(the "Final Due to Shareholder"), as shown on a balance sheet prepared by
CareMatrix (the "Determination Balance Sheet"). CareMatrix shall not change the
classification of any items shown on the Balance Sheet in its preparation of the
Determination Balance Sheet, and the Determination Balance Sheet shall include
all of the expenses and fees incurred and reasonably anticipated to be incurred
by CareMatrix in connection with the Merger. The determination of Final Due to
Shareholder shall be made in accordance with GAAP, consistently applied.
Since the May Balance Sheet Date, except as set forth on Schedule
4.8(b), CareMatrix has not taken or agreed to take any action that would
obligate any CareMatrix Corporation to have:
(a) taken any action or entered into or agreed to enter into
any transaction, agreement or commitment other than in the ordinary
course of business;
(b) entered into or agreed to enter into any transaction,
agreement or commitment, or suffered the occurrence of any event or
events (i) that has interfered or is reasonably likely to interfere
with the normal and usual operations of the
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business of CareMatrix or (ii) that, singly or in the aggregate, has
resulted or is reasonably likely to result in a Material Adverse Change
with respect to CareMatrix;
(c) except for additional funds provided by the Gosmans and
reflected on the financial statement as Due to Shareholder, incurred or
increased any indebtedness for borrowed money or any capital lease
obligations, or assumed, guaranteed, endorsed or otherwise become
responsible for the obligations of any other individual, partnership,
firm or corporation (except to endorse checks for collection for
deposit in the ordinary course of business), or made any loan or
advance to any individual, partnership, firm or corporation;
(d) mortgaged, pledged, or otherwise encumbered, or, other
than in the ordinary course of business, sold, transferred or otherwise
disposed of, any of the properties or assets of CareMatrix, including
any cancelled, released, hypothecated or assigned indebtedness owed to
CareMatrix, or any claims held by CareMatrix;
(e) except with respect to the conversion of related party
debt to equity, made any investment of a capital nature or entered into
a commitment for such investment either by purchase of stock or
securities, contributions to capital, property transfer or otherwise,
or by the purchase of any property or assets of any other individual,
partnership, firm or corporation;
(f) declared, set aside, or paid any dividend or other
distribution (whether in cash, stock or property, or any combination
thereof) in respect of the capital stock of any CareMatrix Corporation,
or, paid more than $5,000,000 to redeem or otherwise acquire, directly
or indirectly, any shares of capital stock of any of the CareMatrix
Corporations;
(g) paid any long-term liability, otherwise than in accordance
with its terms;
(h) since January 1, 1996 paid any bonus compensation in
excess of $120,000 to any officer, director, stockholder or employee of
CareMatrix or otherwise increased the compensation paid or payable to
any of the foregoing by an amount in excess of $50,000, except as
contemplated pursuant to this Agreement;
(i) sold, assigned or transferred any patents, trademarks,
trade names, logos, copyrights, formulae or other intangible assets;
(j) contracted with or committed to any third party (i) to
sell any capital stock of any of the CareMatrix Corporations, (ii) to
sell any assets of CareMatrix other than in the ordinary course of
business, (iii) to effect any merger, consolidation
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or other reorganization of CareMatrix, or (iv) to enter into any
agreement with respect thereto; or
(k) paid any expenses or fees of counsel, accountants or
consultants for services in preparation for or in connection with this
Agreement or the transactions contemplated hereunder in excess of
$1,000,000, exclusive of payments to National Westminster Bank Plc, New
York Branch ("NatWest") substantially as described in the draft
agreement previously furnished to Standish.
4.9 Tangible Properties. "Schedule 4.9(a) of the CareMatrix Disclosure
Schedule contains a true and complete list showing the capitalized value of
Furniture, Fixtures and Equipment owned or leased by CareMatrix. In addition to
the Furniture, Fixtures and Equipment, CareMatrix owns or leases miscellaneous
other fixed assets, fixtures, furnishings, furniture, office supplies, computer
hardware, and software, automobiles, tools, machinery, equipment, spare parts
and other tangible property, which had an individual value of less than $1,000
when leased or purchased (the "CareMatrix Miscellaneous Personal Property", and
collectively with the Furniture, Fixtures and Equipment, the "CareMatrix
Tangible Personal Property"). Except as listed on Schedule 4.9(b) of the
CareMatrix Disclosure Schedule with respect to leased CareMatrix Tangible
Personal Property, CareMatrix has good and marketable title free and clear of
all Claims to the CareMatrix Tangible Personal Property owned by CareMatrix.
With respect to any CareMatrix Tangible Personal Property leased by CareMatrix,
all leases, conditional sale contracts, franchises or licenses pursuant to which
CareMatrix may hold or use (or permit others to hold or use) such CareMatrix
Tangible Personal Property are valid and in full force and effect, and there is
not under any of such instruments any existing default or event of default or
event which with notice or lapse of time or both would constitute such a
default; and CareMatrix's possession and use of such property has not been
disturbed and no claim has been asserted against CareMatrix adverse to their
rights in such leasehold interests. All CareMatrix Tangible Personal Property is
adequate and usable for the purposes for which it is currently used and each
item of CareMatrix Tangible Personal Property, whether owned or leased, is in
good operating condition, reasonable wear and tear excepted, and has been
properly maintained and repaired. CareMatrix Tangible Personal Property
comprises all the equipment necessary for the continuing operation of the
CareMatrix Improvements (as hereinafter defined) in the manner in which they
have been operated to date.
4.10 Real Property.
(a) CareMatrix owns no real property. All real property leased or
managed by CareMatrix (the "CareMatrix Leased or Managed Properties"), together
with the improvements thereon (the "CareMatrix Improvements") is described in
Schedule 4.10(a) of the CareMatrix Disclosure Schedule. Schedule 4.10(a) of the
CareMatrix Disclosure Schedule includes, to the extent available, a materially
accurate summary reflecting the
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location, land acreage, services and maximum legal unit and bed capacities of
each of the CareMatrix Leased or Managed Properties. Schedule 4.10(a) sets forth
a list of all real property subject to options to purchase or lease in favor of
CareMatrix (such purchase options are herein referred to as the "CareMatrix
Property Options", and such locations are herein referred to as the "CareMatrix
Option Locations"). Within 25 days after the date of this Agreement, CareMatrix
shall deliver to Standish a materially accurate summary (to be known as Schedule
4.10A) reflecting the location, land acreage, proposed services, current
development plan and currently planned maximum legal unit and bed capacities of
each such location subject to a CareMatrix Property Option and the proposed
development agent, joint venture, partner or other similar relationship if and
to the extent such a relationship exists, and the affiliation of the other
contracting party to CareMatrix or any of the CareMatrix Stockholders. Where the
term "CareMatrix Leased or Managed Properties" is used in these representations
and warranties, the same shall, unless the context otherwise requires, include
all of the locations referred to as CareMatrix Option Locations.
(b) The information concerning the CareMatrix Leased or Managed
Properties set forth in Schedule 4.10(a) of the CareMatrix Disclosure Schedule
is true, accurate and complete in all material respects, but does not contain
information relating to managed properties. Except as shown on Schedule 4.10(a)
of the CareMatrix Disclosure Schedule, CareMatrix does not own or lease or have
any rights or interest in any other real property other than the CareMatrix
Leased or Managed Properties. Where the term "CareMatrix Leased or Managed
Properties" is used in these representations and warranties, the same shall mean
all of the properties and interests constituting the CareMatrix Leased or
Managed Properties and each individual property or interest.
(c) [omitted.]
(d) [omitted.]
(e) Except as set forth in Schedule 4.10(e) of the CareMatrix
Disclosure Schedule, there are no leases, subleases, tenancies, licenses,
occupancy agreements or other agreements pursuant to which parties other than
CareMatrix hold rights to use or occupy all or any portion of the CareMatrix
Leased or Managed Properties (such leases, subleases, tenancies, licenses,
occupancy agreements and other agreements are herein referred to as the
"CareMatrix Tenant Leases").
(f) CareMatrix is not in default, nor do any circumstances exist which,
with notice or the passage of time, or both, would give rise to a default under
any of the documents to which CareMatrix is a party, recorded or unrecorded,
relating to the CareMatrix Leased or Managed Properties or with respect to any
contractual obligations of CareMatrix that would have a material adverse effect
on the CareMatrix Occupancy Leases.
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(g) Schedule 4.10(g) of the CareMatrix Disclosure Schedule is a true
and complete schedule of all contractual obligations that involve payments or
receipts by CareMatrix of more than $5,000 in any single case, relative to the
ongoing development or construction, maintenance, security, management or
operations of the CareMatrix Leased or Managed Properties excluding, however,
warranties and guaranties, showing as to each of the contractual obligations:
(i) date of the contractual obligation and each amendment thereof; (ii) name of
vendor; (iii) type of service; (iv) termination date of the contractual
obligation; (v) the basis for calculating amounts to become due thereunder; and
(vi) whether and upon what terms either party may terminate such agreement
without cause.
(h) CareMatrix has not been advised of and is not aware of any defect
in the condition of the CareMatrix Leased or Managed Properties, or any portion
thereof, which has not been corrected and which will materially impair the
operation of the CareMatrix Leased or Managed Properties as presently operated
or as proposed to be operated. CareMatrix has not been advised of and is not
aware of any material defect in the CareMatrix Improvements, the structural
elements thereof, the mechanical systems (including, without limitation, all
heating, ventilating, air conditioning, plumbing, electrical, elevator,
security, utility and sprinkler systems) therein, the roofs or the parking and
loading areas. The construction of all of the CareMatrix Improvements has been
fully completed, and, except as set forth in Schedule 4.10(h) of the CareMatrix
Disclosure Schedule, all sums owing on account thereof have been paid in full.
(i) All water, sewer, gas, electric, telephone, drainage and other
utility equipment, facilities and services required by law or necessary for the
proper operation of the CareMatrix Leased or Managed Properties and the
CareMatrix Improvements as they are now being operated are installed and
connected to the CareMatrix Improvements pursuant to valid permits, are adequate
to service the CareMatrix Improvements and are in good operating condition. To
the best of CareMatrix's knowledge, no fact, condition, or proceeding exists
which would result in the termination or impairment of the furnishing of
services to the CareMatrix Leased or Managed Properties of water, sewer, gas,
electric, telephone, drainage and other such utility services.
(j) The CareMatrix Improvements are free from infestation by rodents,
termites or other insects or animals.
(k) To the best of CareMatrix's knowledge, the CareMatrix Improvements
were completed and installed in accordance with plans, which were approved by
all governmental authorities having jurisdiction thereof. CareMatrix has
delivered, or made available, to Standish true, correct and complete copies of
those drawings or plans as are currently in CareMatrix's possession and which
depict the CareMatrix Leased or Managed Properties and the CareMatrix
Improvements as built (the "CareMatrix As-Built Plans"). Except as disclosed on
Schedule 4.10(k) of the CareMatrix Disclosure Schedule, there is legal and
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adequate access to the CareMatrix Leased or Managed Properties at all points so
identified in the CareMatrix Plans and such access is directly from the
CareMatrix Leased or Managed Properties onto public ways as so identified, and
not by means of any lease, license, easement or other agreement. All CareMatrix
Improvements constructed by CareMatrix on any portion of the CareMatrix Leased
or Managed Properties affected by any CareMatrix Occupancy Lease are in
accordance with the CareMatrix Occupancy Lease requirements.
(l) Listed on Schedule 4.10(l) of the CareMatrix Disclosure Schedule is
a true and complete list of all written warranties and guaranties held by
CareMatrix with respect to the CareMatrix Leased or Managed Properties and the
CareMatrix Improvements, including all CareMatrix Tangible Personal Property
relating thereto.
(m) There are no pending or, to the best of CareMatrix's knowledge,
threatened requests, applications or proceedings to alter or restrict the zoning
or other use restrictions applicable to the CareMatrix Leased or Managed
Properties. CareMatrix has not received notice from any municipal, state,
federal or other governmental authority of violations of any Law issued in
respect of the CareMatrix Leased or Managed Properties which have not been
heretofore corrected, and, to the best of CareMatrix's knowledge, no such
violations exist. CareMatrix has not received notice of and is not aware of any
plan, study or effort by any governmental agency or authority which would
materially adversely affect the present use or zoning of the CareMatrix Leased
or Managed Properties or which would modify or realign any adjacent street or
highway.
(n) To the best knowledge of CareMatrix, there are presently in effect
all licenses, permits, approvals and other authorizations necessary for the
current use, occupancy and operation by CareMatrix, if any, of the CareMatrix
Leased or Managed Properties. Such licenses, permits, approvals and other
authorizations are listed in Schedule 4.10(n) of the CareMatrix Disclosure
Schedule hereto. No such license, permit, approval or other authorization (i)
contains any restrictions or conditions that would have a material adverse
effect on the CareMatrix Leased or Managed Properties or (ii) is subject to any
"linkage" or similar obligation. All applicable fees currently due and payable
with respect thereto have been paid in full (and no fees or other payments with
respect thereto shall accrue or become due and payable in the future). All of
such licenses, permits, approvals and other authorizations are in full force and
effect and shall remain in effect indefinitely subject to the conditions
contained therein, without expiration or need of renewal thereof.
(o) [omitted.]
(p) There are no pending or threatened condemnation or similar
proceedings or assessments affecting any of the CareMatrix Leased or Managed
Properties, nor to the best of CareMatrix's knowledge, is any such condemnation
or assessment contemplated by any governmental authority.
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4.11 Licenses and Permits. Schedule 4.11 of the CareMatrix
Disclosure Schedule lists all licenses, permits, pending applications, consents,
approvals and authorizations of or from any public or governmental agency, held
by CareMatrix or used in or otherwise necessary for the conduct of the business
operations of CareMatrix (the "CareMatrix Business") (collectively, the
"CareMatrix Permits") together with any conditions imposed thereon. CareMatrix
has complied with all conditions and requirements imposed by the CareMatrix
Permits and, except as set forth in Schedule 4.11(a), CareMatrix has not
received any notice of, or has any reason to believe, that any appropriate
authority intends to cancel, terminate or suspend any of the CareMatrix Permits
or that valid grounds for such cancellation, termination or suspension exist.
Except as set forth on Schedule 4.11 of the CareMatrix Disclosure Schedule, no
other permits other than the CareMatrix Permits are necessary to operate the
CareMatrix Business. CareMatrix owns or has the right to use the CareMatrix
Permits in accordance with the terms thereof without any conflict or alleged
conflict or infringement with the rights of others and subject to no Claim. Each
CareMatrix Permit is and immediately after the Merger will be valid and in full
force and effect and no CareMatrix Permit will be subject to termination or be
terminated or adversely affected by the Merger.
4.12 Intellectual Property. CareMatrix owns, or is licensed or
otherwise has the full and unrestricted right to use, all patents, trademarks,
trade names, copyrights, technology, know-how, trade secrets, processes,
formulas and techniques used in connection with the current operation of the
CareMatrix Business (collectively, the "CareMatrix Intellectual Property") and
all CareMatrix Intellectual Property is described or listed in Schedule 4.12 of
the CareMatrix Disclosure Schedule, except trade secrets which have been
separately disclosed to Standish. CareMatrix has not granted to any other person
any license or other right to use in any manner any of the CareMatrix
Intellectual Property, whether or not requiring the payment of royalties. Except
as set forth in Schedule 4.12, to the best knowledge of CareMatrix (i) no other
person has a right or license granted directly or indirectly by or through
CareMatrix to use any CareMatrix Intellectual Property; (ii) none of the
CareMatrix Intellectual Property is being infringed by others, or is subject to
any outstanding order, decree, judgment or stipulation; and (iii) there are no
claims or demands of any other person, and no proceedings have been instituted,
or are pending or, to the best knowledge of CareMatrix, threatened, relating to
the CareMatrix Intellectual Property.
4.13 Outstanding Commitments. Schedule 4.13 of the CareMatrix
Disclosure Schedule sets forth a list and description of all existing contracts,
agreements, leases and subleases (other than the CareMatrix Occupancy Leases and
CareMatrix Tenant Leases), commitments, licenses and franchises that involve
payments or receipts by CareMatrix of more than $5,000 in any single case
(collectively, the "CareMatrix Contracts"), whether written or oral, to which
any CareMatrix Corporation is a party or which relate to the CareMatrix
Business. CareMatrix has delivered or made available to Standish true, correct
and complete copies of all written CareMatrix Contracts and Schedule
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4.13 of the CareMatrix Disclosure Schedule contains an accurate and complete
description of all CareMatrix Contracts which are not in writing. All of the
CareMatrix Contracts are in full force and effect. CareMatrix and each other
party to each of the CareMatrix Contracts have performed all the material
obligations required to be performed by them to date, and there is not under any
of the CareMatrix Contracts any existing default or event of default or event
which with notice or lapse of time or both would constitute such a default.
CareMatrix has not (i) any present expectation or intention of not fully
performing all its obligations under each of the CareMatrix Contracts to which
it is a party or (ii) any knowledge of any breach or anticipated breach by any
other party to any of the CareMatrix Contracts. None of the CareMatrix Contracts
has been terminated or notice of termination given with respect thereto, no
notice has been given by any party thereto of any alleged default thereunder by
any party thereto, and CareMatrix is not aware of any intention or right of any
party to any CareMatrix Contract to default another party to any CareMatrix
Contract. There exists no actual or, to the best knowledge of CareMatrix,
threatened termination, cancellation or limitation of the business relationship
of CareMatrix with any party to any CareMatrix Contract.
Within 25 days after the date of this Agreement, CareMatrix shall
deliver to Standish a list and description (to be known as Schedule 4.13A) of
all existing contracts, agreements, leases and subleases, commitments, licenses
and franchises that involve payments or receipts of more than $5,000 in any
single case (collectively, the "Affiliate Contracts"), whether written or oral,
to which any entity owned or controlled by Abraham D. Gosman, Andrew D. Gosman
and/or Michael M. Gosman (a "Gosman Entity") is a party which relate to any
project described in the Corporate Forecast. As of the date of the delivery of
Schedule 4.13A, CareMatrix shall have delivered or made available to Standish
true, correct and complete copies of all written Affiliate Contracts and
Schedule 4.13A shall contain an accurate and complete description of all
Affiliate Contracts which are not in writing. As of the date of the delivery of
Schedule 4.13A, except as may be set forth on Schedule 4.13A, all of the
Affiliate Contracts shall be in full force and effect. As of the date of the
delivery of Schedule 4.13A, except as may be set forth on Schedule 4.13A, each
party to each of the Affiliate Contracts shall have performed all the material
obligations required to be performed by them to date, and there shall not be
under any of the Affiliate Contracts any existing default or event of default or
event which with notice or lapse of time or both would constitute such a
default. As of the date of the delivery of Schedule 4.13A, except as may be set
forth on Schedule 4.13A, none of the Affiliate Contracts shall have been
terminated or notice of termination given with respect thereto, no notice shall
have been given by any party thereto of any alleged default thereunder by any
party thereto, and CareMatrix shall not be aware of any intention or right of
any party to any Affiliate Contract to default another party to any Affiliate
Contract.
4.14 Litigation. Except as set forth on Schedule 4.14 of the
CareMatrix Disclosure Schedule, there is no (i) action, suit, claim, proceeding
or investigation pending
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or, to the best of CareMatrix's best knowledge, threatened against or affect
CareMatrix (whether or not CareMatrix is a party or prospective party thereto),
at law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (ii) pending or, to the best of CareMatrix's knowledge,
threatened arbitration proceeding relating to CareMatrix or (iii) governmental
inquiry pending or, to the best of CareMatrix's knowledge, threatened against or
involving CareMatrix, and there is no basis for any of the foregoing. Except as
set forth on Schedule 4.14 of the CareMatrix Disclosure Schedule, CareMatrix has
not received any opinion or memorandum or legal advice from legal counsel to the
effect that it is exposed, from a legal standpoint, to any liability or
disadvantage which may be material to the prospects, financial condition,
operations, property or affairs of the CareMatrix Business. Except as set forth
on Schedule 4.14 of the CareMatrix Disclosure Schedule, there are no outstanding
orders, writs, judgments, injunctions or decrees of any court, governmental
agency or arbitral tribunal against, involving or affecting CareMatrix, and
there are no facts or circumstances which may result in institution of any
action, suit, claim or legal, administrative or arbitration proceeding or
investigation against, involving or affecting CareMatrix, their assets or
properties, or the Merger or the transactions contemplated hereby. CareMatrix is
not in default with respect to any order, writ, injunction or decree known to or
served upon it from any court or of any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign. Except as set forth on Schedule 4.14 of the CareMatrix
Disclosure Schedule, there is no action, suit or proceeding by CareMatrix or
their affiliates pending or threatened against others. Except as set forth on
Schedule 4.14 of the CareMatrix Disclosure Schedule, none of the following has
occurred within five (5) years prior to the date hereof with respect to
CareMatrix:
(a) Neither CareMatrix nor, to its best knowledge, any current
employee thereof, has been convicted in a criminal proceeding or has
been named or is a subject of a criminal, governmental or other
regulatory investigatory proceeding (excluding traffic violations);
(b) Neither CareMatrix nor, to its best knowledge, any current
employee thereof, has been or is the subject of any order, judgment or
decree of any court, governmental agency or other regulatory body
permanently or temporarily enjoining, barring, suspending or limiting
it or any such person from engaging in any type of business or
professional practice or activities; or
(c) Neither CareMatrix nor, to its best knowledge, any current
employee thereof, has been found by a court of competent jurisdiction
in a civil action or by any governmental agency or other regulatory
body to have violated any Law.
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4.15 Compliance with Law. Except as set forth in Schedule 4.15
of the CareMatrix Disclosure Schedule, CareMatrix is not subject to any
judgment, order, writ, injunction or decree and CareMatrix has complied with and
are not in default under, all laws, ordinances, legal requirements, rules,
regulations and orders applicable to it, its operations, properties, assets,
products and services, including, without limitation, the Medicare and Medicaid
Patient and Program Protection Act of 1987 and the Omnibus Budget Reconciliation
Act of 1994.
4.16 Labor and Employee Relations. No CareMatrix Corporation
is a party to or bound by any collective bargaining agreement with any labor
organization, group or association covering any of its employees, and CareMatrix
has no knowledge of any attempt to organize any of their employees by any
person, unit or group seeking to act as their bargaining agent. Except as set
forth in Schedule 4.16 of the CareMatrix Disclosure Schedule, there are no
pending or threatened charges (by employees, their representatives or
governmental authorities) of unfair labor practices or of employment
discrimination or of any other wrongful action with respect to any aspect of
employment of any employee of CareMatrix.
4.17 Certain Employees. Set forth on Schedule 4.17 of the
CareMatrix Disclosure Schedule is a list of the names of all of the employees
and consultants employed by CareMatrix in connection with the CareMatrix
Business, together with the title or job classification of each such person and
his or her current compensation. Except as set forth on Schedule 4.17 of the
CareMatrix Disclosure Schedule, none of such persons has (i) an employment
agreement or understanding, whether oral or written, with CareMatrix which is
not terminable on thirty (30) days or less notice by CareMatrix without cost or
other liability to CareMatrix or (ii) a non-competition, non-disclosure and/or
non-solicitation agreement or understanding with CareMatrix, whether written or
oral, and all such employment and other agreements are set forth in Schedule
4.17 of the CareMatrix Disclosure Schedule hereto. No person listed on Schedule
4.17 of the CareMatrix Disclosure Schedule has indicated that he or she intends
to terminate his or her employment with CareMatrix or seek a material change in
his or her duties or status. Each person listed on Schedule 4.17 of the
CareMatrix Disclosure Schedule who is required to be licensed by applicable
state law in order to perform his or her duties is so licensed. Set forth on
Schedule 4.17 of the CareMatrix Disclosure Schedule is the amount, if any, of
any severance liability of CareMatrix with respect to each person listed on
Schedule 4.17 of the CareMatrix Disclosure Schedule.
4.18 Employee Benefits. Set forth on Schedule 4.18 of the
CareMatrix Disclosure Schedule is a list of all pension, profit sharing,
retirement, deferred compensation, stock purchase, stock option, incentive,
bonus, vacation, severance, disability, hospitalization, medical insurance, life
insurance, fringe benefit, welfare and other employee benefit plans, programs or
arrangements, whether formal or informal, oral or written, under which employees
of CareMatrix may be entitled to benefits or CareMatrix may have any
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liability (collectively, the "CareMatrix Plans"). Through the Closing Date all
such CareMatrix Plans shall be maintained by CareMatrix in full force and
effect. CareMatrix does not contribute, or has ever been required to contribute,
to any plan subject to Title IV of ERISA or to any multiemployer plan, as
defined in section 3(37) or section 4001(a)(3) of ERISA.
Each CareMatrix Plan has been established and administered in
accordance with its terms and in compliance with the applicable provisions of
the Code, ERISA and other applicable laws, rules and regulations. Each
CareMatrix Plan which is intended to be qualified within the meaning of section
401(a) of the Code is so qualified and has received a favorable determination
letter with respect to its qualification and, to the best knowledge of
CareMatrix, no event has occurred which would cause the loss of such
qualification. Each CareMatrix Plan which is intended to meet the requirements
for tax-favored treatment under Subchapter B of Chapter 1 of Subtitle A of the
Code meets such requirements.
With respect to each CareMatrix Plan, no actions, suits or
claims (other than claims for benefits in the ordinary course) are pending or
threatened, and no facts or circumstances exist which could give rise to any
such actions, suits or claims. CareMatrix has not engaged in a prohibited
transaction, as defined under section 4975 of the Code or section 406 of ERISA,
with respect to any CareMatrix Plan, and no fiduciary with respect to any
CareMatrix Plan has, to the best knowledge of CareMatrix, breached any fiduciary
duty to such CareMatrix Plan under Part 4 of Title I of ERISA or other
applicable law. No event has occurred and no condition exists that would subject
CareMatrix to any tax, fine or penalty imposed by the Code, ERISA or other
applicable law. All required contributions have been made by CareMatrix to each
of the Plans and there is no funding deficiency with respect to any of
CareMatrix Plans. Each CareMatrix Plan may be amended or terminated in
accordance with its terms without obligation or liability, other than those
obligations and liabilities for which specific assets have been set aside or
reserved for on the balance sheet as of the May Balance Sheet Date included in
the CareMatrix Financial Statements and those obligations and liabilities
reflected by the terms of the CareMatrix Plan documents. There are no unfunded
obligations under any CareMatrix Plan providing benefits to employees of
CareMatrix during employment or after termination of their employment.
4.19 Insurance. CareMatrix is, and will be through the Closing
Date, adequately insured with responsible insurers in respect of their
properties, assets and business against risks normally insured against by
companies in similar lines of business under similar circumstances. Schedule
4.19 of the CareMatrix Disclosure Schedule correctly describes (by type,
carrier, policy number, limits, premium and expiration date) the insurance
coverage carried by CareMatrix with respect to the CareMatrix Business, which
insurance will remain in full force and effect with respect to all events
occurring prior to the Closing. CareMatrix (i) has not failed to give any notice
or present any claim under any such policy or binder in due and timely fashion,
(ii) has not received notice of cancellation or non-renewal of any
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such policy or binder, (iii) is not aware of any threatened or proposed
cancellation or non-renewal of any such policy or binder and (iv) have not
received notice of and are not otherwise aware of any insurance premiums which
will be materially increased in the future. There are no outstanding claims
under any such policy which have gone unpaid for more than forty-five (45) days,
or as to which the insurer has disclaimed liability.
4.20 Transactions With Affiliates. Except as contemplated by
this Agreement and except as set forth in Schedule 4.20 of the CareMatrix
Disclosure Schedule hereto and only with respect to transactions giving rise to
current or contingent liabilities of CareMatrix, no current or former holder of
5% or more of any class of capital stock of any CareMatrix Corporation at the
time such transaction was entered into, or any director, officer or employee of
CareMatrix, or member of the family of any such person, or any corporation,
partnership, trust or other entity in which any such person, or any member of
the family of any such person, has an interest or is an officer, director,
trustee, partner or holder of any equity interest, is a party to any transaction
with CareMatrix, including any contract, agreement or other arrangement
providing for the employment of, furnishing of services by, rental of real or
personal property from, or otherwise requiring payments or involving other
obligations to or from such person.
4.21 Taxes. Each of the CareMatrix Corporations has filed all
tax returns and reports required to be filed, including, without limitation,
returns and estimated returns, with respect to federal, state, foreign and local
taxes, and have paid in full all taxes shown due thereon and all estimated taxes
when due (together with all interest, penalties, assessments and deficiencies
assessed in connection therewith due through the date hereof). CareMatrix is not
required to pay any other taxes except as shown in such tax returns, reports and
information filings. All such returns, reports, and information filings required
to be filed, including any amendments to date, have been prepared in good faith
and without negligence or misrepresentation. CareMatrix has either paid or, in
accordance with GAAP applied consistently with prior periods, adequately
provided for, by reserves or other proper accounting treatment shown in the
records and books of account, its liability for all taxes of every kind,
including, without limitation, its liability for federal, state and municipal
income or franchise tax for the current tax year and for all prior years.
CareMatrix has no knowledge of any proposed or threatened assessment or
reassessment of federal, state or municipal income or franchise taxes. The
United States federal income tax returns of CareMatrix have not been examined by
the Internal Revenue Service. In addition, at the date hereof, CareMatrix has
deducted and remitted all withholding tax or source deductions when due to the
appropriate governmental authority as required by law or CareMatrix has
adequately provided for such deductions by reserves or other proper accounting
treatment their books and records of account. CareMatrix (i) has not executed
any waiver to extend, or otherwise taken or failed to take any action that would
have the effect of extending, the applicable statute of limitations with respect
to its tax liabilities, (ii) is not a "consenting corporation" within the
meaning of Section 341(f) of the Code, (iii) has not been a member
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of any consolidated group (other than with CareMatrix Corporations) for tax
purposes or (iv) has, or will have, all records and information necessary for
the timely and accurate filing of any tax returns due after the date hereof,
including any returns due after the Closing Date which relate to the period
prior to the Closing Date.
4.22 Brokers. No agent, person or firm acting on behalf of
CareMatrix or under their authority is or will be entitled to a financial
advisory fee, brokerage commission, finder's fee or like payment in connection
with the transactions contemplated hereby, except NatWest.
4.23 Environmental Laws.
(a) CareMatrix has operated and continue to operate the CareMatrix
Facilities and the CareMatrix Business in compliance with all Environmental
Laws.
(b) No CareMatrix Leased or Managed Property nor, to the best knowledge
of CareMatrix, any real property contiguous thereto, is or has been designated
by any state, local or federal agency or body as a hazardous waste disposal site
or a site or location requiring investigation concerning, or management,
clean-up or removal of, any Hazardous Substance.
(c) There is no civil, criminal or investigative action, suit,
litigation, hearing, communication (written or oral), demand, claim, citation,
notice or notice of violation, warning, consent decree, judgment or order by any
person or entity alleging, claiming, concerning or finding liability or
potential liability arising out of, based on or resulting from, in whole or in
part, (a) the actual or alleged presence, threatened release, release, emission,
disposal, storage, treatment, transportation, generation, manufacture or use of
any Hazardous Substance at or from any location or (b) circumstances forming the
basis of any Environmental Claims pending or threatened against CareMatrix or
against any person or entity whose liability for any Environmental Claim
CareMatrix has or may have retained or assumed either contractually or by
operation of law. There are no past or present actions, activities,
circumstances, conditions, events, incidents or practices, including, without
limitation, the release, threatened release, emission, discharge, disposal,
storage, treatment, transportation, generation, manufacture or use of any
Hazardous Substance that could form the basis of any Environmental Claim against
CareMatrix or, to CareMatrix's best knowledge, against any person or entity
whose liability for any Environmental Claim CareMatrix has or may have retained
or assumed either contractually or by operation of law.
(d) All Waste generated in connection with the business, operations,
assets and properties of CareMatrix has been (i) treated, stored or disposed of
by or at facilities duly licensed pursuant to applicable Environmental Laws and
(ii) transported to such facilities by transporters duly licensed pursuant to
applicable Environmental Laws. CareMatrix has
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maintained true and complete records relating to the generation, transportation,
treatment, storage and disposal of Waste generated in connection with the
business, operations, assets and properties of CareMatrix.
(e) CareMatrix has delivered to Standish all Environmental Reports in
possession of CareMatrix or its past or present consultants and advisors or
those reports as have been prepared by any person or entity concerning
compliance with applicable Environmental Laws of CareMatrix's business,
operations, assets or properties or the use, manufacture, importation,
processing, storage, treatment, transportation, release or disposal therefrom,
therein or thereon of any Hazardous Substance. All such Environmental Reports
are listed on Schedule 4.23 of the CareMatrix Disclosure Schedule.
4.24 Corporate Records. The corporate record books of each
CareMatrix Corporation are in good order, complete, accurate, up to date, with
all necessary signatures, and set forth all meetings and actions taken by the
stockholders and directors, and all votes of the stockholders or directors set
forth in certificates furnished to anyone at any time heretofore.
4.25 Accounts Receivable. All of the accounts receivable of
CareMatrix shown or reflected on the most recent balance sheet in the CareMatrix
Financial Statements, less the reserve for doubtful accounts in the amount shown
on such balance sheet, are valid and enforceable claims and subject to no setoff
or counterclaim. CareMatrix has no accounts or loans receivable from any of its
directors, officers or employees in excess of $7,500 in the aggregate.
4.26 Proxy Statement. Within 35 days of the date of this
Agreement, CareMatrix shall furnish Standish with a correct and complete copy of
the audited December 31, 1995 CareMatrix Financial Statements and the notes and
schedules thereto prepared in accordance with GAAP, together with other written
information relating to CareMatrix for inclusion in the Proxy Statement. Such
CareMatrix Financial Statements and other information relating to CareMatrix
furnished in writing by CareMatrix to Standish for inclusion in the Proxy
Statement, at the time of the mailing of the Proxy Statement to Standish's
stockholders and at the time of the meeting of Standish's stockholders, will not
contain any untrue statement of a material fact or omit to state a material fact
concerning CareMatrix or omit to state a material fact required or necessary to
be stated therein in order to make the statements contained therein concerning
CareMatrix, in light of the circumstances under which they are made, not
misleading. Information relating to CareMatrix furnished in writing by
CareMatrix to Standish for inclusion in the Form S-4 Registration Statement, at
the time of its effectiveness, will not contain any untrue statement of a
material fact or omit to state a material fact concerning CareMatrix or omit to
state a material fact required or necessary to be stated therein in order to
make the statements
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contained therein concerning CareMatrix, in light of the circumstances under
which they are made, not misleading.
4.27 Certain Practices. CareMatrix have complied with any and
all rules, regulations, policies and procedures of third party payors with
respect to billing for services. Neither CareMatrix nor any stockholder,
director, officer, or employee of CareMatrix has, directly or indirectly, given
or agreed to give remuneration, in cash or in kind, in order to induce business
reimbursable under Medicare, Medicaid or any health care insurer or provider
which could subject CareMatrix to any damage or penalty in any civil, criminal
or governmental litigation or proceeding. CareMatrix has not at any time
established or maintained any fund or asset for any illegal purpose or made any
false entries or any books or records for any reason.
4.28 Disclosure. All documents and schedules delivered or to
be delivered by or on behalf of CareMatrix in connection with this Agreement,
the Merger and the transactions contemplated hereby are true, complete and
correct. Neither this Agreement, nor any Schedule or Exhibit to this Agreement
contains any untrue statement by CareMatrix of a material fact or an omission by
CareMatrix of a material fact necessary to make the statements contained herein
or therein, in light of the circumstances in which made, not misleading.
4.29 Contracts and Other Documents. Except for those
contracts, agreements, license agreements, vendor agreements, purchase orders,
commitments, sales orders, supply arrangements and other agreements which are
listed in the CareMatrix Disclosure Schedules (collectively, the "Contracts") or
which have been entered into by the CareMatrix Corporations in the ordinary
course of business and do not involve payment or receipt of more than
$10,000.00, and those Leases in the CareMatrix Disclosure Schedules, no
CareMatrix Corporation is a party to any Contract, Lease or similar document.
All the Contacts are valid, binding and enforceable and in full force and
effect, and there are no (i) notices of violation or (ii) existing material
defaults (or events that, with notice or lapse of time or both, would constitute
material defaults) on the part of a CareMatrix Corporation or to the knowledge
of such CareMatrix Corporation on the part of any other party thereto. Copies of
the Contracts have been heretofore delivered to Standish by CareMatrix or its
counsel and such copies are true and complete and include all amendments,
supplements and modifications thereto; each such Contract will be subject to
obtaining any consent listed in the CareMatrix Disclosure Schedules and will
continue to be in full force and effect on the same terms and conditions
immediately after the Closing without the need for any action on the part of
Standish.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUISITION
Each Acquisition Corporation represents and warrants to
CareMatrix as follows:
5.1 Organization. Each Acquisition Corporation is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware. Standish owns all of the issued and outstanding shares of
capital stock of each Acquisition Corporation.
5.2 Power and Authority. Each Acquisition Corporation has full
corporate power and authority to carry on its business as now being conducted
and to own, operate and lease its properties in the places where such business
is now conducted and such properties are now owned, leased or operated. This
Agreement and the transactions contemplated hereby have been duly approved by
the Board of Directors and the sole stockholder of each Acquisition Corporation.
Each Acquisition Corporation has full corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby, and
this Agreement and all other agreements to be executed and delivered by each
Acquisition Corporation in connection herewith constitute the legal, valid and
binding obligations of each Acquisition Corporation enforceable against it in
accordance with their respective terms.
5.3 No Violation. Neither the execution and delivery of this
Agreement and the other documents and instruments contemplated hereby, the
consummation of the transactions contemplated hereby or thereby, nor the
performance of this Agreement and such other documents and instruments in
compliance with the terms and conditions hereof and thereof will (i) conflict
with or result in any breach of any trust agreement, charter documents, by-law,
judgment, decree, order, statute or regulation applicable to each Acquisition
Corporation, (ii) require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority, (iii)
result in a breach of or default (or give rise to any right of termination,
cancellation or acceleration) under any law, rule or regulation or any judgment,
decree, order, governmental permit, license or order or any of the terms,
conditions or provisions of any mortgage, indenture, note, license, agreement or
other instrument to which each Acquisition Corporation is a party or (v) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
each Acquisition Corporation.
5.4 Broker. No agent, broker, person or firm acted on behalf of
any Acquisition Corporation or under its authority in connection with any of the
transactions contemplated hereby.
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5.5 Disclosure. The representations and warranties made by each
Acquisition Corporation in this Agreement do not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained herein, in light of the circumstances in which they are
made, not misleading.
ARTICLE VI
COVENANTS OF STANDISH AND ACQUISITION
Standish and each Acquisition Corporation covenant and agree with
CareMatrix as follows:
6.1 Best Efforts Cooperation. Subject to the provisions of
Section 6.9, until the Closing, Standish and each Acquisition Corporation shall
use their best efforts in good faith to perform and fulfill, or cause to be
performed and fulfilled, all conditions and obligations to be fulfilled, or
performed by them hereunder, to the end that the transactions contemplated
hereby will be fully and timely consummated.
6.2 Access. Until the Closing, Standish shall give CareMatrix,
and its attorneys, accountants and other authorized representatives complete
access, upon reasonable notice and at reasonable times, to Standish's and the
Standish Subsidiaries' offices, suppliers, employees, business and financial
records, contracts, business plans, budgets and projections, agreements and
commitments and other documents and information concerning the Standish Business
and persons employed by or doing business with Standish and the Standish
Subsidiaries, except such documents covered by the attorney-client privilege. In
order that CareMatrix may have full opportunity to make such examination and
investigation as they may desire of the Standish Business, Standish and the
Standish Subsidiaries will furnish CareMatrix and its representatives during
such period with all such information as such representatives may reasonably
request and cause the respective officers, employees, consultants, agents,
accountants and attorneys of Standish and the Standish Subsidiaries to cooperate
fully with the representatives of CareMatrix in connection with such review and
examination and to make full disclosure to CareMatrix of all material facts
affecting Standish's financial condition and the operations, properties and
prospects of the Standish Business; provided, however, that CareMatrix will,
unless the Closing occurs, hold the documents and information concerning
Standish and the Standish Business confidential in accordance with Section 8.5
hereof.
6.3 Insurance. Until the Closing, Standish and the Standish
Subsidiaries shall maintain with financially sound and reputable insurers,
insurance against such casualties and contingencies and of such types and in
such amounts as is customary for companies similarly situated.
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6.4 Compliance with Laws. Until the Closing, Standish shall
conduct the Standish Business in compliance with all applicable laws, rules,
regulations and orders, including, without limitation the Medicare and Medicaid
Patient Protection Act of 1987, the Omnibus Budget Reconciliation Act of 1993
and the rules and regulations of third party payors.
6.5 Keeping of Books and Records. Until the Closing, Standish
shall keep adequate records and books of account, in which complete entries will
be made in accordance with generally accepted accounting principles consistently
applied, reflecting all financial transactions and in which all proper reserves
for depreciation, depletion, obsolescence, amortization, taxes, bad debts and
other purposes in connection with the Standish Business shall be made.
6.6 Conduct of Business. Prior to the Effective Time, unless
CareMatrix shall have consented in writing thereto, Standish:
(a) shall, and shall cause each of the Standish Subsidiaries
to, conduct its operations according to its usual, regular and ordinary
course in substantially the same manner as heretofore conducted;
(b) shall use its reasonable efforts, and shall cause each of
the Standish Subsidiaries to use its reasonable efforts, to preserve
intact its business organization and goodwill, keep available the
services of its officers and employees, and maintain satisfactory
relationships with those persons having business relationships with it;
(c) shall not, and shall not permit the Standish Subsidiaries
to, amend its charter documents or By-laws, except as provided for in
this Agreement;
(d) shall promptly notify CareMatrix of any material emergency
or other material change in its or any Standish Subsidiary's condition
(financial or otherwise), business, properties, assets, liabilities,
prospects or the normal course of its or any Standish Subsidiary's
businesses or in the operation of its or any Standish Subsidiary's
properties and of any litigation or governmental complaints,
investigations or hearings (or communications indicating that the same
may be contemplated);
(e) shall notify Standish promptly after any change in its
capitalization or the issuance of any options or warrants to acquire
any shares of its capital stock not existing on the date hereof; and
shall not permit the Standish Subsidiaries to, (i) except pursuant to
the exercise of options, warrants, conversion rights and other
contractual rights existing on the date hereof and listed on Schedule
3.3 of the Standish Disclosure Schedule, issue any shares of its
capital stock, effect any stock split or otherwise change its
capitalization as it exists on the date hereof, (ii) grant,
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confer or award any option, warrant, conversion right or other right to
acquire any shares of its capital stock not existing on the date hereof
and listed on Schedule 3.3 of the Standish Disclosure Schedule, (iii)
accelerate the vesting or exercisability of any option, warrant,
conversion right or other right to acquire any shares of its capital
stock, (iv) increase, or permit any of the Standish Subsidiaries to
increase, any compensation or enter into or amend any employment
agreement with any of its present or future officers, directors or
employees except for the payment of cash bonuses to officers or
employees pursuant to and consistent with existing plans or programs
described on Schedules 3.18 of the Standish Disclosure Schedule and
3.19 of the Standish Disclosure Schedule, (v) adopt any new employee
benefit plan (including any stock option, stock benefit or stock
purchase plan) or amend any existing employee benefit plan in any
respect or (vi) sell, lease or otherwise dispose of any of its assets
which are material, individually or in the aggregate, except in the
ordinary course of business;
(f) shall not, and shall not permit the Standish Subsidiaries
to, (i) incur or obligate itself to incur any capital expenditure in
excess of $20,000, incur any long-term indebtedness in addition to that
outstanding on the date hereof (other than loans from CareMatrix) or
any other indebtedness or liability other than in the ordinary course
of business; (ii) make any loans, advances or capital contributions to,
or investments in, any other person, other than travel or other
advances to employees consistent with past practice; or (iii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently, or otherwise) for the obligations of any other
person, except to endorse checks for collection or deposit in the
ordinary course of business;
(g) declare or pay any dividend or distribution on any shares
of its capital stock; or
(h) agree, or permit any Standish Subsidiary to agree, in
writing or otherwise to take any of the foregoing actions or any action
that would make any representation or warranty in this Agreement untrue
or incorrect as of the date hereof or as of the Effective Time, as if
made as of such time.
6.7 Litigation. Until the Closing, Standish will promptly
notify CareMatrix of any lawsuits, claims, proceedings or investigations which
are threatened or commenced against or by Standish and any Standish Subsidiary
or their affiliates, or against any employee, consultant or director of Standish
or any Standish Subsidiary.
6.8 Continued Effectiveness of Representations and Warranties.
From the date hereof up to and including the Closing Date, (i) Standish and the
Standish Subsidiaries will conduct the Standish Business in a manner such that
the representations and warranties
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of Standish and Acquisition contained herein shall continue to be true and
correct on and as of the Closing Date as if made on and as of the Closing Date,
except for changes and events arising as a consequence of the Merger, or actions
in the ordinary and usual course of business after the date hereof which would
not result in a Material Adverse Change on the properties, assets, operations or
condition (financial or otherwise) or prospects of the Standish Business; and
(ii) Standish will advise CareMatrix promptly in writing of any condition or
circumstance occurring from the date hereof up to and including the Closing Date
which could cause any representations or warranties of Standish or Acquisition
to become untrue.
6.9 No Negotiations. (a) Until the Closing, or the earlier
termination of this Agreement in accordance with its terms (the
"Non-Solicitation Period"), Standish and each officer, director, employee,
consultant, advisor, agent or investment banker of Standish and each Standish
Subsidiary will not, directly or indirectly, solicit, encourage or consider
alternative offers for any merger or any business combination transaction
involving Standish or the Standish Business or for the sale of any of Standish
Common Stock, or the lease, purchase option, or sale of any material assets of
Standish or the Standish Business from parties other than CareMatrix, (each, an
"Alternative Proposal"). Notwithstanding the foregoing first sentence of this
Section 6.9, Standish may participate in discussions or negotiations with, and
may furnish information (pursuant to confidentiality agreements having
provisions not less restrictive than those set forth in the Confidentiality
Agreement entered into between CareMatrix and Standish) to any third party (i)
which on or before the end of the Non-Solicitation Period, sought to engage in
such discussions or negotiations or requested such information or (ii) which
seeks to engage in discussions or negotiations or request such information if,
in either case, the Board of Directors of Standish determines, based on the
written opinion of Robinson & Cole or other legal counsel reasonably acceptable
to Standish ("Legal Counsel"), that failing to engage in such discussions or
negotiations or provide such information would reasonably be expected to violate
the fiduciary duties of the Board of Directors of Standish. The Board of
Directors of Standish may take and disclose to Standish's stockholders a
position with respect to any tender offer and make such disclosure to the
stockholders of Standish as may be required under applicable law; provided that
the Board of Directors of Standish shall not recommend that the stockholders of
Standish tender their shares unless such recommendation is permitted by the
first sentence of Section 6.9(c).
(b) Unless the Board of Directors of Standish determines, based on the
written opinion of Legal Counsel, that doing so would reasonably be expected to
violate the fiduciary duties of the Board of Directors of Standish, (i) Standish
promptly shall advise CareMatrix orally and in writing of any Alternative
Proposal or any inquiry with respect to or which could lead to any Alternative
Proposal and the identity of the person making any such Alternative Proposal or
inquiry and (ii) Standish shall include in any such notice a description of the
terms and conditions of any such Alternative Proposal or inquiry.
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(c) Notwithstanding anything to the contrary in this Agreement, the
Board of Directors of Standish shall be permitted from time to time to take the
following actions in the circumstances described below:
(i) to withdraw or modify its approval or recommendations of this
Agreement or the Merger in a manner adverse to CareMatrix; or
(ii) to approve or recommend or enter into an agreement with
respect to an Alternative Proposal; or
(iii) to terminate this Agreement
in each case if (A) an Alternative Proposal is commenced, publicly disclosed or
communicated to Standish and (B) the Board of Directors of Standish determines,
based on the written opinion of Legal Counsel, that such action is required in
order to comply with its fiduciary duties. No action by the Board of Directors
of Standish permitted by the preceding sentence (each, a "Permitted Action")
shall constitute a breach of this Agreement by Standish.
6.10 Monthly Statements. Until the Closing, Standish will
deliver to CareMatrix monthly financial statements for Standish within thirty
(30) days after the end of each month.
6.11 Further Assurances. Standish will use its best efforts to
have all present officers and directors of Standish and each Standish Subsidiary
execute whatever minutes of meetings or other instruments and to take whatever
action as may be necessary or desirable to effect, perfect or confirm of record
of otherwise, in the Surviving Corporation, full right, title and interest in
and to the business, properties and assets now conducted or owned by Standish,
free and clear of all restrictions, liens, encumbrances, rights, title and
interests in others, or to collect, realize upon, gain possession of, or
otherwise acquire full right, title and interest in and to such business,
properties and assets, or to carry out the intent and purposes of the
transactions contemplated hereby.
6.12 Certain Agreements. Neither Standish nor any Standish
Subsidiary will agree to do or cause to be done any of the acts which Standish
has covenanted not to do under this Article VI.
ARTICLE VII
COVENANTS OF CAREMATRIX
7.1 Best Efforts Cooperation. CareMatrix covenants and agrees
that it shall use its best efforts in good faith to perform and fulfill all
conditions and obligations to
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be fulfilled or performed by it hereunder to the end that the transactions
contemplated hereby will be fully and timely consummated.
7.2 Access. Until the Closing, CareMatrix shall give Standish,
and its attorneys, accountants and other authorized representatives complete
access, upon reasonable notice and at reasonable times, to CareMatrix's offices,
suppliers, employees, business and financial records, contracts, business plans,
budgets and projections, agreements and commitments and other documents and
information concerning the CareMatrix Business and persons employed by or doing
business with CareMatrix, except such documents covered by the attorney-client
privilege. In order that Standish may have full opportunity to make such
examination and investigation as they may desire of the CareMatrix Business,
CareMatrix will furnish Standish and its representatives during such period with
all such information as such representatives may reasonably request and cause
the respective officers, employees, consultants, agents, accountants and
attorneys of CareMatrix to cooperate fully with the representatives of Standish
in connection with such review and examination and to make full disclosure to
Standish of all material facts affecting CareMatrix's financial condition and
the operations, properties and prospects of the CareMatrix Business; provided,
however, that Standish will, unless the Closing occurs, hold the documents and
information concerning CareMatrix and the CareMatrix Business confidential in
accordance with Section 8.5 hereof.
7.3 Insurance. Until the Closing, CareMatrix shall maintain
with financially sound and reputable insurers, insurance against such casualties
and contingencies and of such types and in such amounts as is customary for
companies similarly situated.
7.4 Compliance with Laws. Until the Closing, CareMatrix shall
conduct the CareMatrix Business in compliance with all applicable laws, rules,
regulations and orders, including, without limitation, the Medicare and Medicaid
Patient Protection Act of 1987, the Omnibus Budget Reconciliation Act of 1993
and the rules and regulations of third party payors.
7.5 Keeping of Books and Records. Until the Closing,
CareMatrix shall keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting principles
consistently applied, reflecting all financial transactions and in which all
proper reserves for depreciation, depletion, obsolescence, amortization, taxes,
bad debts and other purposes in connection with the CareMatrix Business shall be
made.
7.6 Conduct of Business. Prior to the Effective Time, unless
Standish shall have consented in writing thereto, each CareMatrix Corporation:
(a) shall conduct its operations according to its usual,
regular and ordinary course in substantially the same manner as
heretofore conducted;
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(b) shall use its reasonable efforts to preserve intact its
business organization and goodwill, keep available the services of its
officers and employees, and maintain satisfactory relationships with
those persons having business relationships with it;
(c) shall not amend its charter documents or By-laws, except
as provided for in this Agreement;
(d) shall promptly notify Standish of any material emergency
or other material change in its condition (financial or otherwise),
business, properties, assets, liabilities, prospects or the normal
course of its businesses or in the operation of its properties and of
any litigation or governmental complaints, investigations or hearings
(or communications indicating that the same may be contemplated);
(e) shall not (i) increase any compensation or enter into or
amend any employment agreement with any of its present or future
officers, directors or employees except for the payment of cash bonuses
to officers or employees pursuant to and consistent with existing plans
or programs described on Schedules 4.17 and 4.18 of the CareMatrix
Disclosure Schedule, (ii) adopt any new employee benefit plan
(including any stock option, stock benefit or stock purchase plan) or
amend any existing employee benefit plan in any respect or (iii) sell,
lease or otherwise dispose of any of its assets which are material,
individually or in the aggregate, except in the ordinary course of
business;
(f) shall not (i) incur or obligate itself to incur any
capital expenditure in excess of $20,000, incur any long-term
indebtedness in addition to that outstanding on the date hereof or any
other indebtedness or liability other than in the ordinary course of
business; (ii) make any loans, advances or capital contributions to, or
investments in, any other person, other than travel or other advances
to employees consistent with past practice; or (iii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently, or otherwise) for the obligations of any other person,
except to endorse checks for collection or deposit in the ordinary
course of business;
(g) declare or pay any dividend or distribution on any shares
of its capital stock; or
(h) agree in writing or otherwise to take any of the foregoing
actions or any action that would make any representation or warranty in
this Agreement untrue or incorrect as of the date hereof or as of the
Effective Time, as if made as of such time; provided, however, that
nothing contained in this Agreement shall limit the ability of
CareMatrix to pursue its current acquisition and development strategy.
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7.7 Litigation. Until the Closing, CareMatrix will promptly
notify Standish of any lawsuits, claims, proceedings or investigations which are
threatened or commenced against or by CareMatrix its affiliates, or against any
employee, consultant or director of CareMatrix.
7.8 Continued Effectiveness of Representations and Warranties.
From the date hereof up to and including the Closing Date, (i) CareMatrix will
conduct the CareMatrix Business in a manner such that the representations and
warranties contained herein of CareMatrix shall continue to be true and correct
on and as of the Closing Date as if made on and as of the Closing Date, except
for changes and events arising as a consequence of the Merger, or actions in the
ordinary and usual course of business after the date hereof which would not
result in a Material Adverse Change on the properties, assets, operations or
condition (financial or otherwise) or prospects of the CareMatrix Business; and
(ii) CareMatrix will advise Standish promptly in writing of any condition or
circumstance occurring from the date hereof up to and including the Closing Date
which could cause any representations or warranties of CareMatrix to become
untrue.
7.9 Standstill. Until the earlier to occur of (a) consummation
of the Merger or (b) the expiration of one (1) year following the termination of
this Agreement, neither CareMatrix nor any of its affiliates (as defined in Rule
12b-2 under the Exchange Act) will:
(i) Bid for, acquire or seek to acquire any of the assets of the
Standish Business or any voting or debt securities or
preferred stock of Standish, or any rights or options to
acquire such ownership, or take any action to effect a change
of control of Standish, or initiate contact with any other
person in an effort to solicit, encourage or assist such
person in a takeover proposal involving Standish;
(ii) Deposit any voting securities of Standish in a voting trust or
subject any such securities to any arrangement, understanding
or agreement with respect to the voting, holding or
disposition of such securities;
(iii) Become a member of a partnership, limited partnership,
syndicate or other group, or otherwise act in concert with any
person for the purpose of acquiring, holding, voting or
disposing of securities of Standish; or
(iv) Seek to have called, or caused to be called, any meeting of
stockholders of Standish, or initiate, propose or solicit any
proxy or consent of stockholders of Standish for the approval
of any proposal, or participate in the taking of any action by
written consent of stockholders of Standish in lieu of a
meeting, or
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seek or propose to influence or control the management or
policies of Standish, or to obtain representation on the Board
of Directors of Standish;
provided, however, that the foregoing provisions of this Section 7.9 shall not
be applicable in the event the Merger is not consummated because of the failure
of any condition specified in Sections 9.1 or 9.2.
7.10 Monthly Statements. Until the Closing, CareMatrix will
deliver to Standish monthly financial statements for CareMatrix prepared in
accordance with GAAP within thirty (30) days after the end of each month.
7.11 Further Assurances. CareMatrix will use its best efforts
to have all present officers and directors of each CareMatrix Corporation
execute whatever minutes of meetings or other instruments and to take whatever
action as may be necessary or desirable to effect, perfect or confirm of record
of otherwise, in the Surviving Corporations, full right, title and interest in
and to the business, properties and assets now conducted or owned by CareMatrix
or which CareMatrix has represented to Standish in writing as set forth in that
certain "CareMatrix Corporation Corporate Forecast -- June 1996 (the "CareMatrix
Forecast") previously delivered by CareMatrix to Standish, will be conducted by
CareMatrix, free and clear of all restrictions, liens, encumbrances, rights,
title and interests in others, or to collect, realize upon, gain possession of,
or otherwise acquire full right, title and interest in and to such business,
properties and assets, or to carry out the intent and purposes of the
transactions contemplated hereby.
7.12 Certain Agreements. CareMatrix will not agree to do or
cause to be done any of the acts which CareMatrix has covenanted not to do under
this Article VII.
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7.13 Stockholder Approval. Each CareMatrix Corporation shall
promptly submit this Agreement and the transactions contemplated herein for the
approval of its stockholders at a meeting of stockholders. Subject to the
fiduciary duties of the Board of Directors of CareMatrix under applicable law,
the Board of Directors of each CareMatrix Corporation has agreed to recommend to
its stockholders approval of the Merger. Subject to the fiduciary duties of the
Board of Directors of each CareMatrix Corporation under applicable law, each
CareMatrix Corporation shall use its best efforts to obtain stockholder approval
and adoption of this Agreement and the transactions contemplated hereby prior to
the SEC Filing Date, and to cause any of its directors, who are also
stockholders, to vote in favor thereof.
7.14 Restrictive Covenant. Prior to the Effective Time and
subject to Schedule 4.5, each CareMatrix Corporation shall not, without the
prior written consent of Standish, (i) assign, convey, pledge, mortgage, or
otherwise transfer or agree to transfer any interest in or right of such
CareMatrix Corporation or of any other entity of the kind specified in (ii)
below to receive or otherwise recognize any development or management fees or
other revenues in respect of the projects identified in the CareMatrix Forecast,
and (ii) permit either Abraham D. Gosman, Andrew D. Gosman or Michael M. Gosman,
or any entity controlled by any of them (other than a CareMatrix Corporation),
to engage in the management and/or development of an assisted and/or independent
living facility.
In addition, each of the CareMatrix Corporations covenants and agrees
that prior to the Closing, it shall effectuate (subject to the obligations and
requirements set forth on Schedule 4.5 with respect to projects involving any
unaffiliated joint venture participant, which obligations and requirements the
CareMatrix Corporation hereby agree to use their best efforts to effectuate) the
assignment and transfer of any right, title or interest that it may have, or any
other entity of the kind specified in (ii) above may have, in the projects
described in the CareMatrix Forecast, subject to a reservation of the rights to
manage or turnkey develop each such project, and to cause such other entities to
transfer to CareMatrix their rights to earn development fees, management fees or
other similar operating revenues from such projects. Finally, each CareMatrix
Corporation hereby covenants and agrees, with respect to such projects, to
execute definitive management, turnkey development or joint venture agreements
substantially in the forms set forth in Schedule 7.14 of the CareMatrix
Disclosure Schedule immediately prior to or simultaneously with the closing by
the proposed third party purchaser of the land upon which each such project is
to be developed; provided, however, that prior to the execution of such
definitive management and turnkey development agreement, the applicable
CareMatrix Corporation shall have completed a review of title, survey,
environmental and such other customary due diligence materials relating to such
project and shall have determined that the matters disclosed by such materials
shall not have a material adverse effect upon the project.
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ARTICLE VIII
MUTUAL COVENANTS
8.1 General Covenants. Following the execution of this
Agreement, each Acquisition Corporation , Standish and each CareMatrix
Corporation agree:
(a) If any event should occur, either within or without the
knowledge or control of any party, which would prevent fulfillment of
the conditions to the obligations of any party hereto to consummate the
transactions contemplated by this Agreement, to use its or their
reasonable efforts to cure the same as expeditiously as possible;
(b) To cooperate fully with each other in preparing, filing,
prosecuting, and taking any other actions which are or may be
reasonable and necessary to obtain the consent of any governmental
instrumentality or any third party to accomplish the transactions
contemplated by this Agreement;
(c) To deliver such other instruments of title, certificates,
consents, endorsements, assignments, assumptions and other documents or
instruments, in form reasonably acceptable to the party requesting the
same and its counsel, as may be reasonably necessary to carry out
and/or to comply with the terms of this Agreement and the transactions
contemplated herein;
(d) To confer on a regular basis with the other, report on
material operational matters and promptly advise the other orally and
in writing of any change or event resulting in, or which, insofar as
can reasonably be foreseen could result in, a Material Adverse Change
on such party or which would cause or constitute a material breach of
any of the representations, warranties or covenants of such party
contained herein;
(e) To file all reports required to be filed by each of them
or their affiliates with the Commission between the date hereof and the
Closing Date and to deliver to the other (or its counsel) copies of all
such reports promptly after the same are filed; and
(f) To provide the other (or its counsel) promptly with copies
of all other filings made by such party with any state or federal
governmental entity in connection with this Agreement or the
transactions contemplated hereby.
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8.2 Proxy Statement and Fairness Opinion. Following the
execution of this Agreement, each Acquisition Corporation, Standish and each
CareMatrix Corporation agree:
(a) Standish shall use its best efforts in good faith to
prepare and file with the Commission within forty-five (45) days after
the date hereof (the "SEC Filing Date") the Proxy Statement and the
Form S-4 Registration Statement;
(b) Standish shall use its best efforts in good faith to
obtain the written opinion of Stonebridge Associates, LLC addressed to
the Board of Directors of Standish dated as of a date reasonably
proximate to the date of the Proxy Statement to Standish's
stockholders, to the effect that, as of the date of such opinion, the
resulting ownership of the outstanding shares of Standish Common Stock
to be retained by Standish current stockholders after giving effect to
the shares of Standish Common Stock to be issued to the stockholders of
CareMatrix is fair, from a financial point of view, to the stockholders
of Standish;
(c) Standish and each Acquisition Corporation shall take any
action required to be taken under the Delaware Law and the laws, rules
and regulations of the Commission in connection with the consummation
of the transactions contemplated by this Agreement;
(d) CareMatrix shall cooperate in the preparation and filing
of the Proxy Statement and the Form S-4 Registration Statement and all
information furnished for use therein by either party shall be
reasonably satisfactory to the other; provided, however, that neither
party shall have any liability to the other or to any third party for
any information contained therein which is furnished in writing by the
other party for inclusion in the Proxy Statement or the Form S-4
Registration Statement;
(e) After the filing of the Proxy Statement and the Form S-4
Registration Statement, Standish shall notify CareMatrix promptly of
the receipt of the comments of the Commission and of any request by the
Commission for amendments or supplements to the Proxy Statement or the
Form S-4 Registration Statement or for additional information and shall
supply CareMatrix with copies of all correspondence between Standish or
its representatives and the Commission or members of its staff with
respect thereto;
(f) Prior to the approval of the Merger by Standish's
stockholders, CareMatrix shall correct any material information
provided by it to be used in the Proxy Statement or the Form S-4
Registration Statement that shall have become false or misleading in
any material respect and Standish shall take all steps necessary to
file with the Commission and have cleared by the Commission any
amendment or supplement to the Proxy Statement or the Form S-4
Registration Statement and to
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cause the same as so corrected to be disseminated to the stockholders
of Standish, to the extent required by applicable law; provided,
however, that prior to the dissemination thereof, (i) CareMatrix and
Standish shall consult with each other with respect to such amendment
or supplement and (ii) Standish shall afford CareMatrix with a
reasonable opportunity to comment on disclosure relating to CareMatrix
or its affiliates and shall ensure that such disclosure is reasonably
satisfactory to CareMatrix; and
(g) CareMatrix and Standish shall promptly furnish to each
other all information, and take such other actions as may reasonably be
requested in connection with any action by either of them in
furtherance of the provisions of this Section 8.2.
8.3 Stockholder Approval. Standish shall promptly submit this
Agreement and the transactions contemplated herein for the approval of its
stockholders at a meeting of stockholders. Subject to the fiduciary duties of
the Board of Directors of Standish under applicable law, the Board of Directors
of Standish has agreed to recommend to its stockholders approval of the Merger.
Subject to the fiduciary duties of the Board of Directors of Standish under
applicable law, Standish shall use its best efforts to obtain stockholder
approval and adoption of this Agreement and the transactions contemplated hereby
by September 30, 1996, and to cause any of its directors, who are also
stockholders, to vote in favor thereof.
8.4 Public Announcements. The parties shall consult with each
other prior to the issuance by either party of any press release or any written
statement with respect to this Agreement or the transactions contemplated
hereby.
8.5 Confidentiality. As used herein, "Confidential Information"
means any information or data that a party has acquired from another party that
is confidential or not otherwise available to the public, whether oral or
written, including without limitation any analyses, computations, studies or
other documents prepared from such information or data by or for the directors,
officers, employees, agents or representatives of such party (collectively, the
"Representatives"), but excluding information or data which (i) the party can
demonstrate it lawfully obtained or developed prior to May 22, 1996, (ii) became
available to the public other than as a result of such party's violation of this
Agreement, (iii) became available to such party from a source other than the
other party if that source was not bound by a confidentiality agreement with
such other party and such source lawfully obtained such information or data, or
(iv) is required to be disclosed by applicable law, provided that promptly after
being compelled to disclose any such information or data, the party being so
compelled shall provide prompt notice thereof to the other party so that such
other party may seek a protective order or other appropriate remedy. Each party
covenants and agrees that it and its Representatives shall keep confidential and
shall not disclose all Confidential Information, except to its Representatives
and lenders who need to know such
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information and agree to keep it confidential. Each party shall be responsible
for any breach of this provision by its Representatives. In the event that the
Closing does not occur, each party will promptly return to the other all copies
of such other party's Confidential Information.
8.6 Hart-Scott-Rodino Filing.
(a) If required by law, Standish and CareMatrix agree to file
with the Antitrust Division of the United States Department of Justice
and the Federal Trade Commission a Notification and Report Form in
accordance with the notification requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and to
use their best efforts to achieve the prompt termination or expiration
of the waiting period or any extension thereof provided for under the
HSR Act as a prerequisite to the consummation of the transactions
provided for herein. CareMatrix and Standish shall each bear one-half
of the expense of any filing fees required under the HSR Act as a
result of the proposed Merger.
(b) Nothing in this Section 8.6 shall be construed as
requiring any party to this Agreement or its affiliates to (i) sell or
otherwise dispose of any of its assets or voting securities other than
as otherwise contemplated by this Agreement or (ii) take any action
which either would result in a Material Adverse Change in any such
party or its affiliates or would materially impair the value of the
Standish Business or the CareMatrix Business.
ARTICLE IX
CONDITIONS TO CAREMATRIX'S OBLIGATIONS
The obligation of CareMatrix to consummate the transactions
contemplated hereby is subject to the satisfaction, on or before the Closing
Date, of the following conditions each of which may be waived by CareMatrix in
its sole discretion.
9.1 Representations and Warranties True. All of the
representations and warranties of Standish and Acquisition contained in this
Agreement or in any Schedules or other documents attached hereto or referred to
herein or delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true, correct and complete in all material respects
on and as of the date hereof and on and as of the Closing Date, as if made on
and as of the Closing Date. On the Closing Date, the Chairman of the Board or
Chief Financial Officer of Standish and Acquisition shall have executed and
delivered to CareMatrix a certificate, in form and substance satisfactory to
CareMatrix and its counsel, to such effect.
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9.2 Performance. Standish and Acquisition shall have performed
and complied in all material respects with all covenants and agreements
contained herein required to be performed or complied with by them prior to or
at the Closing Date. The Chairman of the Board or Chief Financial Officer of
Standish and Acquisition shall have executed and delivered to CareMatrix a
certificate, in form and substance satisfactory to CareMatrix and its counsel,
to such effect and to the further effect that all of the conditions set forth in
this Article IX have been satisfied.
9.3 Consents. Standish and Acquisition shall have obtained all
requisite approvals and consents of, and made all requisite filings with, all
governmental entities and third parties which are necessary to be obtained or
made to (i) permit the valid execution, delivery and performance by Standish and
Acquisition of this Agreement, including without limitation the Merger, and (ii)
prevent any Permit or agreement relating to the Standish Business from
terminating prior to its scheduled termination as a result of the consummation
of the transactions contemplated hereby. In addition, CareMatrix shall have
received or obtained all licenses, permits, consents, approvals and
authorizations from any public or governmental agency or any third party
necessary as a result of the Merger, and any appeal period with respect to the
same shall have expired without an objection thereto having been filed. In
addition, the Form S-4 Registration Statement shall have been declared effective
under the Securities Act and no stop order shall be effective with respect
thereto.
9.4 [Omitted.]
9.5 HSR Act Requirements. The filing and waiting period
requirements under the HSR Act shall have been complied with and shall have
expired or terminated.
9.6 No Material Adverse Change. No Material Adverse Change
with respect to Standish or Acquisition shall have occurred.
9.7 No Actions, Suits or Proceedings. As of the Closing Date,
no action, suit, investigation or proceeding brought by any governmental agency
or instrumentality or any holder of 10% or more of the voting securities of
Standish shall be pending or, to the knowledge of the parties to this Agreement,
threatened (in writing, in the case of threatened action by any security
holder), before any court or governmental body (i) to restrain, prohibit,
restrict or delay, or to obtain damages or a discovery order in respect of this
Agreement or the consummation of the Merger, (ii) which has resulted or could
reasonably be expected to result in a Material Adverse Change with respect to
Standish or (iii) which has or could reasonably be expected to adversely affect
the operation of the Standish Business or has or could reasonably be expected to
result in the imposition of liability on Standish or any Standish Subsidiary. No
order, decree or judgment of any court or governmental body shall have been
issued and remain in effect at the Closing restraining, prohibiting, restricting
or delaying, the consummation of the transactions contemplated by this
Agreement. No
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insolvency proceeding of any character including without limitation, bankruptcy,
receivership, reorganization, dissolution or arrangement with creditors,
voluntary or involuntary, affecting Standish or any Standish Subsidiary shall be
pending, and neither Standish nor any Standish Subsidiary shall have taken any
action in contemplation of, or which would constitute the basis for, the
institution of any such proceedings.
9.8 No Material Adverse Economic Event. There shall not have
occurred (i) any general suspension of trading in, or limitation on prices for,
or other extraordinary event affecting securities on the New York Stock Exchange
or NASDAQ National Market, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iii) any
material limitation (whether or not mandatory) by any governmental authority on,
or any other event which might affect the extension of credit by, lending
institutions, or (iv) in the case of any of the foregoing existing on the date
hereof, a material acceleration or worsening thereof.
9.9 Opinion of Counsel. CareMatrix shall have received the
opinion of Robinson & Cole, counsel to Standish and Acquisition, substantially
in the form set forth as Exhibit 9.9 hereto.
9.10 Accountants. CareMatrix shall have received from
Standish's independent public accountants a certificate or letter, dated the
Closing Date, to the effect that the Merger will be accounted for as a purchase
by CareMatrix of Standish.
9.11 Closing Documents. Standish and Acquisition shall have
delivered all of the resolutions, certificates, documents and instruments
required by this Agreement, including without limitation:
(a) Resolutions of the Boards of Directors and stockholders of
Standish and Acquisition, certified by their respective Secretaries,
and other evidence satisfactory to CareMatrix that the requisite
consent of the stockholders of Standish has been obtained;
(b) Certificates of Good Standing with respect to Standish and
each Standish Subsidiary issued by the Secretary of State of its state
of incorporation and of any state where it is qualified to do business
as a foreign corporation;
(c) Copies of the charter documents and By-laws of Standish
and each Standish Subsidiary certified by the Secretary of State of its
state of incorporation and by its secretary;
(d) Resignations of all officers and directors of Standish to
the extent provided in Section 1.4 and of each Subsidiary effective as
of the Effective Time;
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(e) Estoppel Certificates from the lessors under each of the
Standish Occupancy Leases in form and substance satisfactory to
CareMatrix; and
(f) Non-disturbance agreements executed and delivered by each
mortgagee of each Standish Leased Premises listed on Schedule 3.11(d)
in form and substance satisfactory to CareMatrix.
9.12 Dissenting Standish Stockholders. Holders of shares of
Standish Common Stock representing ten percent (10%) or more of the outstanding
shares of Standish Common Stock shall not have demanded appraisal for their
shares in accordance with Delaware Law.
9.13 [omitted.]
9.14 [omitted.]
9.15 Employment Agreements. Standish shall have entered into
amended and restated employment agreements (the "Employment Agreements") with
Michael J. Doyle and Kenneth M. Miles substantially in the form attached hereto
as Exhibit 9.15.
9.16 Approval of CareMatrix and Its Counsel. All actions,
proceedings, consents, instruments and documents required to be delivered by, or
at the bequest or direction of, Standish or Acquisition hereunder or incident to
its performance hereunder, and all other related matters, shall be reasonably
satisfactory as to form and substance to CareMatrix and its counsel.
9.17 Board Approval. On or before July 10, 1996, the Board of
Directors of Standish and each Acquisition Corporation shall have (i) determined
that the Merger is fair and in the best interests of their stockholders (ii)
approved and adopted this Agreement and the transactions contemplated hereby,
and (iii) resolved to recommend to the stockholders of such corporation that
they approve this Agreement and the Merger.
ARTICLE X
CONDITIONS TO STANDISH'S AND ACQUISITION'S OBLIGATIONS
The obligation of Standish to consummate the transactions contemplated
hereby is subject to the satisfaction, on or before the Closing Date, of the
following conditions, each of which may be waived by Standish in its sole
discretion:
10.1 Representations and Warranties to be True and Correct. The
representations and warranties contained in Article IV shall be true, complete
and correct in
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all material respects, on and as of the Closing Date, as if made on and as of
such date, and CareMatrix shall have delivered to Standish a certificate, in
form and substance satisfactory to Standish and its counsel, to such effect.
10.2 Performance. CareMatrix shall have performed and complied
in all material respects with all agreements contained herein required to be
performed or complied with by it prior to or at the Closing Date, and the
Chairman of the Board or President of CareMatrix shall have delivered a
certificate to Standish in form and substance reasonably satisfactory to
Standish and its counsel to such effect.
10.3 Consents. CareMatrix shall have obtained all requisite
approvals and consents of, and made all requisite filings with, all governmental
entities and third parties which are necessary to be obtained or made to (i)
permit the valid execution, delivery and performance by CareMatrix of this
Agreement, including without limitation the Merger, and (ii) prevent any Permit
or agreement relating to the CareMatrix Business from terminating prior to its
scheduled termination as a result of the consummation of the transactions
contemplated hereby. In addition, Standish shall have received or obtained all
licenses, permits, consents, approvals and authorizations from any public or
governmental agency or any third party necessary as a result of the Merger, and
any appeal period with respect to the same shall have expired without an
objection thereto having been filed. In addition, the Form S-4 Registration
Statement shall have been declared effective under the Securities Act and no
stop order shall be effective with respect thereto.
10.4 Stockholder Approval and Conditions Precedent. The Merger
shall have been approved by the stockholders of Standish.
10.5 HSR Act Requirements. The filing and waiting period
requirements under the HSR Act shall have been complied with and shall have
expired or terminated.
10.6 No Material Adverse Change. No Material Adverse Change with
respect to CareMatrix shall have occurred.
10.7 No Actions, Suits or Proceedings. As of the Closing Date,
no action, suit, investigation or proceeding brought by any governmental agency
or instrumentality shall be pending or, to the knowledge of the parties to this
Agreement, threatened, before any court or governmental body (i) to restrain,
prohibit, restrict or delay, or to obtain damages or a discovery order in
respect of this Agreement or the consummation of the Merger, (ii) which has
resulted or could reasonably be expected to result in a Material Adverse Change
with respect to CareMatrix or (iii) which has or could reasonably be expected to
adversely affect the operation of the CareMatrix Business or the consummation of
a material portion of the CareMatrix Portfolio Transfers or has or could
reasonably be expected to result in the imposition of liability on CareMatrix.
No order, decree or judgment of any court or
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governmental body shall have been issued and remain in effect at the Closing
restraining, prohibiting, restricting or delaying, the consummation of the
transactions contemplated by this Agreement. No insolvency proceeding of any
character including without limitation, bankruptcy, receivership,
reorganization, dissolution or arrangement with creditors, voluntary or
involuntary, affecting CareMatrix shall be pending, and CareMatrix shall not
have taken any action in contemplation of, or which would constitute the basis
for, the institution of any such proceedings.
10.8 Opinion of CareMatrix's Counsel. Standish and Acquisition
shall have received from Nutter, McClennen & Fish, LLP an opinion dated as of
the Closing Date substantially in the form of Exhibit 10.5 hereto.
10.9 Fairness Opinion. Standish shall have received the written
opinion of Stonebridge Associates, LLP addressed to the Board of Directors of
Standish dated as of a date reasonably proximate to the date of the Proxy
Statement to Standish's stockholders, to the effect that, as of the date of such
opinion, the resulting ownership of the outstanding shares of Standish Common
Stock to be retained by Standish current stockholders after giving effect to the
shares of Standish Common Stock to be issued to the stockholders of CareMatrix
is fair, from a financial point of view, to Standish and the stockholders of
Standish, and such opinion shall not have been withdrawn. Standish shall have
obtained such investment banking firm opinion as may be necessary in connection
with the Merger to avoid exclusion of coverage under its directors and officers
liability insurance policy.
10.10 Acquisition Corporations. Each of the Acquisition
Corporations shall have executed this Agreement.
10.11 Closing Documents. CareMatrix shall have delivered all of
the resolutions, certificates, documents and instruments required to be
delivered by it by this Agreement, including, without limitation:
(a) resolutions of the Board of Directors and stockholders of
CareMatrix, certified by its secretary, and other evidence satisfactory
to Standish that the requisite consent of the stockholders of
CareMatrix has been obtained;
(b) certificates of good standing with respect to each
CareMatrix Corporation issued by the Secretary of State of its state of
incorporation and of any state where it is qualified to do business as
a foreign corporation;
(c) copies of the charter documents and by-laws of each
CareMatrix Corporation certified by the Secretary of State of its state
of incorporation and by its secretary;
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(d) resignations of directors of CareMatrix to the extent
provided in Section 1.4 effective as of the Effective Time; and
(e) estoppel certificates from the lessors under each of the
CareMatrix Occupancy Leases, other than the lease of which CareMatrix
of ARI is a tenant.
10.13 [Omitted.]
10.14 Employment Agreements. Standish shall have entered into
the Employment Agreements.
10.15 Approval of Standish, Acquisition and their Counsel. All
actions, proceedings, consents, instruments and documents required to be
delivered by, or at the behest or direction of, CareMatrix hereunder or incident
to its performance hereunder, and all other related matters, shall be reasonably
satisfactory as to form and substance to Standish and its counsel.
10.16 Board Approval. On or before July 10, 1996, the Board of
Directors of each CareMatrix Corporation shall have (i) determined that the
Merger is fair and in the best interests of their stockholders (ii) approved and
adopted this Agreement and the transactions contemplated hereby, and (iii)
resolved to recommend to the stockholders of such corporation that they approve
this Agreement and the Merger.
ARTICLE XI
SURVIVAL
No representation, warranty and agreement of the parties set forth in
this Agreement or any of the rights and remedies of the other party for any one
or more breaches thereof shall survive the Closing. All representations,
warranties and agreements of the parties set forth in this Agreement and all of
the rights and remedies of the other party for any one or more breaches thereof
shall be shall be effective regardless of any investigation that may have been
made at any time by or on behalf of any party or its directors, officers,
employees or agents.
ARTICLE XII
TERMINATION
12.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Closing:
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(a) By mutual written consent duly authorized by the Board of
Directors of Standish and CareMatrix;
(b) By Standish or CareMatrix if
(i) any court or governmental body of competent jurisdiction 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,
provided that no termination shall be permitted under this
paragraph unless the party seeking such termination shall have
used its reasonable best efforts to oppose such issuance or
taking;
(ii) the other party commits any material breach of its
representations, warranties or covenants set forth herein and
such breach has not been cured within ten (10) days after written
notice is given to terminate this Agreement as a result of such
breach; or
(iii) the Board of Directors of the other party fails to approve and
recommend adoption of this Agreement on or before July 10, 1996.
(c) By CareMatrix or Standish if the conditions set forth in
Articles IX or X respectively have not been satisfied or waived by
February 15, 1997, or by such later date not more than three (3) months
thereafter which Standish and CareMatrix shall mutually select (the
"Termination Date");
(d) By Standish (i) pursuant to a Permitted Action, as
specified in Section 6.9(c), or (ii) at any time following an
Alternative Proposal, the Board of Directors of Standish determines,
based on the written opinion of Legal Counsel, that such termination is
required in order for the Board of Directors of Standish to comply with
its fiduciary duties;
(e) By CareMatrix, if the Board of Directors of Standish takes
any Permitted Action or if a vote of Standish's stockholders results in
the rejection of the adoption or authorization of this Agreement by
such stockholders; or
(f) By CareMatrix if the preliminary Proxy Statement or the
Form S-4 Registration Statement shall not have been filed with the
Commission within forty-five (45) days after the date hereof.
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Upon the occurrence of any of the events specified in this Section 12.1
(other than paragraph (a) hereof), written notice of such event shall forthwith
be given to the other parties to this Agreement, whereupon this Agreement shall
terminate and the Merger shall be abandoned.
12.2 Effect of Termination. In the event of the termination of
this Agreement and abandonment of the Merger pursuant to Section 12.1:
(a) This Agreement, except for the provisions of Section 8.5
and Articles XI, XII and XIII, shall forthwith become void and be of no
effect, without any liability on the part of any party or its
affiliates, directors, officers or stockholders; provided that nothing
in this Section 12.2(a) shall relieve any party to this Agreement of
liability for breach of this Agreement; and
(b) If the conditions set forth in Section 10.1 and 10.2 are
satisfied and:
(i) an Alternative Proposal is commenced, publicly disclosed or
communicated to Standish and, as a result of such Alternative
Proposal, the Board of Directors of Standish takes any
Permitted Action and enters into an agreement for any
Alternative Proposal or terminates this Agreement or this
Agreement is terminated by CareMatrix following Standish's
taking a Permitted Action; or
(ii) an Alternative Proposal is publicly commenced, proposed or
disclosed and this Agreement is terminated following the
failure of Standish's stockholders to approve this Agreement
at the stockholders meeting,
and within twelve (12) months following such termination, an
Alternative Proposal is consummated involving consideration (or
implicit valuation) for the Standish Common Stock on a fully diluted
basis having a present value greater than the value ascribed to the
Standish Common Stock in the Merger (a "Higher Transaction"), then
Standish shall pay to CareMatrix within ten (10) business days
following such occurrence a fee (the "Topping Fee"), in cash of Two
Million Dollars ($2,000,000.00) less any amount paid pursuant to
Section 12.2(c) as full and complete liquidated damages, it being
specifically understood and agreed that in the event of such a
termination the damages suffered by CareMatrix will be difficult to
ascertain. In no event shall Standish be obligated to pay more than one
(1) Topping Fee with respect to all Higher Transactions.
(c) In the event that this Agreement is terminated pursuant to Sections
12.1(b)(ii) or (iii) or 12.1(d) or as a result of a failure of any condition set
forth in Article IX (other than Sections 9.5, 9.7, 9.8 and 9.10) and the
conditions set forth in Sections 10.1 and 10.2
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are satisfied, Standish shall thereupon become obligated to pay to CareMatrix
Five Hundred Thousand Dollars ($500,000.00) (the "Standish Break Up Fee").
(d) In the event that this Agreement is terminated pursuant to Section
12.1(b)(ii) or (iii) or as a result of a failure of any condition set forth in
Article X (other than Sections 10.5, 10.7 or 10.9) and the conditions set forth
in Sections 9.1, and 9.2 are satisfied, CareMatrix shall thereupon become
obligated to pay to Standish Five Hundred Thousand Dollars ($500,000.00) (the
"CareMatrix Break Up Fee").
(e) In the event that Standish is obligated to pay the Standish Break
Up Fee to CareMatrix pursuant to Section 12.2(c) and CareMatrix is obligated to
pay the CareMatrix Break Up Fee to Standish pursuant to Section 12.2(d), then
neither party shall be obligated to pay to the other party either the Standish
Break Up Fee or the CareMatrix Break Up Fee.
ARTICLE XIII
MISCELLANEOUS
13.1 Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telex, telecopy or facsimile transmission with a confirmatory copy
by regular mail, (iii) sent by recognized overnight courier or (iv) sent by
registered or certified mail, return receipt requested, postage prepaid.
If to CareMatrix:
CareMatrix Corporation
197 First Avenue
Needham, MA 02194
Attn: Andrew D. Gosman, President
Facsimile telephone number: 617-433-1191
with a copy to
James M. Clary, III, Esq.
at such address
with an additional copy to:
Michael J. Bohnen, Esq.
Nutter, McClennen & Fish, LLP
One International Place
Boston, MA 02110-2699
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Facsimile telephone number: 617-973-9748
If to Standish or Acquisition:
The Standish Care Company
6 New England Executive Park
Burlington, MA 01803
Attn: Michael J. Doyle, Chairman
Facsimile telephone number: 617-270-4501
With a copy to:
David A. Garbus, Esq.
Robinson & Cole
One Boston Place
Boston, MA 022108-4404
Facsimile telephone number: 617-557-5999
All notices, requests, consents and other communications hereunder shall be
deemed to have been properly given (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service or (iv) if sent by registered or
certified mail, on the fifth business day following the day such mailing is
made.
13.2 Entire Agreement. This Agreement together with the Exhibits
and Schedules hereto and the other documents executed and to be executed in
connection herewith (together, the "Documents") embodies the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in the Documents shall
affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
13.3 Modifications and Amendments. The terms and provisions of
this Agreement may be modified or amended only by written agreement executed by
all parties hereto.
13.4 Waivers and Consents. No failure or delay by a party hereto
in exercising any right, power or remedy under this Agreement, and no course of
dealing between the parties hereto, shall operate as a waiver of any such right,
power or remedy of
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the party. No single or partial exercise of any right, power or remedy under
this Agreement by a party hereto, nor any abandonment or discontinuance of steps
to enforce any such right, power or remedy, shall preclude such party from any
other or further exercise thereof or the exercise of any other right, power or
remedy hereunder. The election of any remedy by a party hereto shall not
constitute a waiver of the right of such party to pursue other available
remedies. No notice to or demand on a party not expressly required under this
Agreement shall entitle the party receiving such notice or demand to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the party giving such notice or demand to any other or
further action in any circumstances without such notice or demand. The terms and
provisions of this Agreement may be waived, or consent for the departure
therefrom granted, only by written document executed by the party entitled to
the benefits of such terms or provisions. No such waiver or consent shall be
deemed to be or shall constitute a waiver or consent with respect to any other
terms or provisions of this Agreement, whether or not similar. Each such waiver
or consent shall be effective only in the specific instance and for the purpose
for which it was given, and shall not constitute a continuing waiver or consent.
13.5 Assignment. Neither this Agreement, nor any right
hereunder, may be assigned by any of the parties hereto without the prior
written consent of the other parties.
13.6 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and their permitted
assigns, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. Nothing in this Agreement shall be
construed to create any rights or obligations except among the parties hereto,
and no person or entity shall be regarded as a third-party beneficiary of this
Agreement.
13.7 Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
governed by the substantive internal laws of the State of Delaware, without
giving effect to conflict of law principles and rules thereof that would lead to
the application of the substantive laws of another jurisdiction.
13.8 Jurisdiction and Service of Process. Any legal action or
proceeding with respect to this Agreement may be brought in the courts of the
Commonwealth of Massachusetts or the State of Delaware, or of the United States
of America for the District of Massachusetts or the District of Delaware. By
execution and delivery of this Agreement, each of the parties hereto accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereby irrevocably waive any
objection or defense that they may now or hereafter have to the assertion of
personal jurisdiction by any such court in any such action or to the laying of
the venue of
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any such action in any such court, and hereby waive, to the extent not
prohibited by law, and agree not to assert, by way of motion, as a defense, or
otherwise, in any such proceeding, any claim that it is not subject to the
jurisdiction of the above-named courts for such proceedings. Each of the parties
hereto irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered mail, postage prepaid, to the party at its address set
forth in Section 13.1 hereof and irrevocably waives any objection or defense
that it may now or hereafter have to the sufficiency of any such service of
process in any such action. Nothing in this Section 13.8 shall affect the rights
of the parties to commence any such action in any other forum or to serve
process in any such action in any other manner permitted by law.
13.9 Severability. In the event that any court of competent
jurisdiction shall finally determine that any provision, or any portion thereof,
contained in this Agreement shall be void or unenforceable in any respect, then
such provision shall be deemed limited to the extent that such court determines
it enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall determine any such provision, or portion thereof
wholly unenforceable, the remaining provisions of this Agreement shall
nevertheless remain in full force and effect.
13.10 Interpretation. The parties hereto acknowledge and agree
that: (i) each party and its counsel reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its revision; (ii) the rule
of construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all parties hereto and not in favor of or against any party, regardless of
which party was generally responsible for the preparation of this Agreement.
13.11 Headings and Captions. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only and
shall in no way modify, or affect, or be considered in construing or
interpreting the meaning or construction of any of the terms or provisions
hereof.
13.12 Choice of Remedies and Enforcement. The parties shall be
entitled to pursue any and all remedies available to them, in law or in equity,
in the event of a breach of this Agreement. Each of the parties hereto
acknowledges and agrees that the rights acquired by each party hereunder are
unique and that irreparable damage would occur in the event that any of the
provisions of this Agreement to be performed by the other party were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, in addition to any other remedy to which the parties hereto are
entitled at law or in equity, each party hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement by the other
party and to enforce specifically the terms and
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provisions hereof in any federal or state court to which the parties have agreed
hereunder to submit to jurisdiction.
13.13 Expenses. Except as set forth in Section 12.2 hereof, each
of the parties hereto shall pay its own fees and expenses (including the fees of
any attorneys, accountants, appraisers or others engaged by such party) in
connection with this Agreement and the transactions contemplated hereby whether
or not the transactions contemplated hereby are consummated.
13.14 Counterparts. This Agreement may be executed in one or
more counterparts, and by different parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, each Acquisition Corporation, Standish and each
CareMatrix Corporation have executed this Agreement as of the day and year first
above written.
THE STANDISH CARE COMPANY
By: /s/ Michael J. Doyle
____________________________
Title: Chairman of the Board
ATTEST:
By: /s/ Kenneth M. Miles
____________________________
STANDISH ACQUISITION 1, INC. STANDISH ACQUISITION 2, INC.
STANDISH ACQUISITION 3, INC. STANDISH ACQUISITION 4, INC.
STANDISH ACQUISITION 5, INC. STANDISH ACQUISITION 6, INC.
STANDISH ACQUISITION 7, INC. STANDISH ACQUISITION 8, INC.
STANDISH ACQUISITION 9, INC. STANDISH ACQUISITION 10, INC.
STANDISH ACQUISITION 11, INC. STANDISH ACQUISITION 12, INC.
By: ____________________________
Title: Chairman of the Board
ATTEST:
____________________________
Title:
CAREMATRIX OF MASSACHUSETTS, INC. CAREMATRIX OF AMBER LIGHTS, INC.
CAREMATRIX OF AMETHYST ARBOR, INC. CAREMATRIX OF EMERALD SPRINGS, INC.
CAREMATRIX OF CYPRESS STATION, INC. CCC OF MARYLAND, INC.
CAREMATRIX OF CRAGGANMORE, INC. CAREPLEX OF HOMESTEAD, INC.
CAREMATRIX OF DARIEN, INC. CAREPLEX OF MIAMI SHORES, INC.
CAREMATRIX OF ARI, INC. A.M.A. NEW JERSEY DEVELOPMENT, INC.
By: /s/ Andrew D. Gosman
____________________________
Title: President
ATTEST:
/s/ J.M. Clary, Jr.
____________________________
Title: General Council/EVP
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SCHEDULE I SCHEDULE II
STANDISH ACQUISITION 1, INC. CAREMATRIX OF MASSACHUSETTS, INC.
STANDISH ACQUISITION 2, INC. CAREMATRIX OF AMBER LIGHTS, INC.
STANDISH ACQUISITION 3, INC. CAREMATRIX OF AMETHYST ARBOR, INC.
STANDISH ACQUISITION 4, INC. CAREMATRIX OF EMERALD SPRINGS, INC.
STANDISH ACQUISITION 5, INC. CAREMATRIX OF CYPRESS STATION, INC.
STANDISH ACQUISITION 6, INC. CCC OF MARYLAND, INC.
STANDISH ACQUISITION 7, INC. CAREMATRIX OF CRAGGANMORE, INC.
STANDISH ACQUISITION 8, INC. CAREPLEX OF HOMESTEAD, INC.
STANDISH ACQUISITION 9, INC. CAREMATRIX OF DARIEN, INC.
STANDISH ACQUISITION 10, INC. CAREPLEX OF MIAMI SHORES, INC.
STANDISH ACQUISITION 11, INC. CAREMATRIX OF ARI, INC.
STANDISH ACQUISITION 12, INC. A.M.A. NEW JERSEY DEVELOPMENT, INC.
SCHEDULE III
Each of the Schedule I corporations listed above will be merged into the
Schedule II corporation listed above opposite its name.
<PAGE>
Exhibit 1.1
TO
AGREEMENT AND PLAN
OF
MERGER
The following form relates to the merger of two Delaware corporations. To the
extent that corporations of different states will merge pursuant to this
Agreement, such certificate of merger and/or other documents or instruments
shall be prepared and filed with the applicable secretaries of state and/or
other state agencies as necessary in accordance with the laws of such states in
order to effectuate the merger of said entities.
CERTIFICATE OF MERGER
OF
STANDISH ACQUISITION __, INC.
INTO
CAREMATRIX OF ____________, INC.
The undersigned corporation, organized and existing under and by virtue of the
General Corporation Law of the State of Delaware, does hereby certify:
1. That the name and state of incorporation of each of the constituent
corporations of the merger is as follows:
Name of Corporation State of Incorporation
CareMatrix of __________, Inc. Delaware
Standish Acquisition __________, Inc. Delaware
2. That an Agreement and Plan of Merger (the "Merger Agreement") between the
parties to the merger has been approved, adopted, certified, executed and
acknowledged by each of the constituent corporations in accordance with the
requirements of Section 251 of the General Corporation Law of the State of
Delaware.
3. That the surviving corporation in the merger is CareMatrix of ___________,
Inc.
4. That the Certificate of Incorporation of the surviving corporation shall be
the certificate of incorporation of CareMatrix of __________, Inc.
5. That the executed Merger Agreement is on file at the principal place of
business of the surviving corporation. The address of the principal place of
business of the surviving corporation is 197 First Avenue, Needham, MA 02194.
6. That a copy of the Merger Agreement will be furnished by the surviving
corporation on request and without cost to any stockholder of any constituent
corporation.
CAREMATRIX OF __________, Inc.
Dated: _______________________ By: _______________________________
Andrew D. Gosman, President
<PAGE>
Exhibit 1.5(a)
TO
AGREEMENT AND PLAN
OF
MERGER
Company Percentage
Allocation
CareMatrix of Massachusetts, Inc. 8.333%
CareMatrix of Amethyst Arbor, Inc. 8.333%
CareMatrix of Cypress Station, 8.333%
Inc.
CareMatrix of Cragganmore, Inc. 8.333%
CareMatrix of Darien, Inc. 8.333%
CareMatrix of ARI, Inc. 8.333%
CareMatrix of Amber Lights, Inc. 8.333%
CareMatrix of Emerald Springs, 8.333%
Inc.
CarePlex of Homestead, Inc. 8.333%
CarePlex of Miami Shores, Inc. 8.333%
CCC of Maryland, Inc. 8.333%
A.M.A. New Jersey Development, 8.333%
Inc.
Shares of Standish Common Stock shall be issued to the holders of the
common stock of each of the above corporations in proportion to their respective
percentages of ownership of the total outstanding shares of common stock of such
corporation.
<PAGE>
Schedule 1.5(d)
TO
AGREEMENT AND PLAN
OF
MERGER
Abraham D. Gosman
Andrew D. Gosman
Michael M. Gosman
Johathan R. Banton
James M. Clary, III
Timothy J. Coburn
Edward E. Goldman
Joel A. Kanter
Frederick R. Leathers
Kevin J. Maley
Richard S. Mann
Robert A. Miller
Elizabeth Murphy
William A. Sanger
Craig J. Wilkos
Michael Zaccaro
Exhibit 9.9
, 1996
[13 CareMatrix Corporations]
197 First Avenue
Needham, MA 02194
Gentlemen:
This opinion is furnished to you pursuant to Section 9.9 of the
Agreement and Plan of Merger dated July 3, 1996, (the "Agreement") , by and
among the Standish Care Company ("Standish"), twelve subsidiaries of Standish
(the Acquisition Subsidiaries") and the twelve corporations to whom this letter
is addressed ( collectively "CareMatrix").
We have acted as counsel to Standish in connection with the execution
and delivery of the Agreement and the transactions contemplated thereby.
In rendering our opinion we have examined the Agreement, the
Certificates of Merger executed by the Acquisition Subsidiaries (the
"Certificates of Merger"), and such laws, certificates of public officials,
certificates of officers of Standish, instruments, documents, and corporate
records, and have made such other investigations, as we have deemed necessary in
connection with the opinions hereinafter set forth. In such examination we have
assumed (i) the genuineness of all signatures on certificates and documents
other than those of Standish, (ii) the accuracy, completeness and authenticity
of all records and documents submitted to us as originals, and (iii) the
conformity to the original of all documents submitted to us as certified,
conformed or photostatic copies.
The Agreement and the Certificates of Merger are collectively referred
to herein as the "Transaction Documents." Capitalized terms used but not defined
herein shall have the meanings attributed to them in the Agreement.
Based upon the foregoing, and subject to the qualifications and
exceptions set forth herein, having regard for legal considerations we deem
relevant, we are of the opinion that:
<PAGE>
CareMatrix Corporation
, 1996
Page 2
1. Standish and each Acquisition Subsidiary are corporations duly
organized, validly existing. and in good standing under the laws of their
jurisdictions of incorporation set forth on Schedule 3.2 to the Agreement.
Standish and each Acquisition Subsidiary are duly qualified and in good standing
as foreign corporations in every jurisdiction where it is required to be so
qualified, except where the failure to be so qualified would not have a material
adverse effect on the business or assets of Standish or any Acquisition
Subsidiary.
2. Standish and each Acquisition Subsidiary have the corporate power and
authority necessary to own and hold the properties each now purports to own and
hold and to conduct their business substantially as now conducted; and Standish
and each Acquisiton Subsidiary has the corporate power and authority necessary
to enter into the Transaction Documents and the transactions contemplated
thereby and to carry out the respective terms thereof.
3. The execution and delivery by Standish of the Transaction Documents
and the performance by Standish and each Acquisiton Subsidiary of its
obligations under the Agreement have been duly authorized by all necessary
corporate action on the part of Standish. Each of the Transaction Documents has
been duly executed and delivered by Standish and each Acquisiton Subsidiary. The
Agreement constitutes legal, valid and binding obligations of Standish and the
Acquisition Subsidiaries, enforceable against them in accordance with its terms.
4. The execution and delivery by Standish and the Acquisition
Subsidiaries of the Transaction Documents, and the performance by them of their
obligations thereunder, will not (a) violate or contravene any provision of
their charter documents or bylaws or any statute, rule or regulation, (b) result
in a breach of or cause a default under or give rise to any termination,
cancellation or acceleration of the maturity of any payment date under the terms
or conditions of any indenture, agreement or other instrument known to us to
which Standish is a party or by which Standish or any assets of Standish or any
Acquisition Subsidiary are bound, (c) violate any order, writ, judgment,
injunction or decree known to us by which Standish is bound or to which any of
them is subject, or (d) to our knowledge, result in the creation of any lien,
pledge, charge or encumbrance upon any of the assets of Standish or any
Acquisition Subsidiary.
5. No consent, approval, authorization, order, filing, registration or
qualification of or with any court, governmental authority or, to our knowledge,
any third person is required as a condition precedent to the consummation by
Standish and the Acquisition Subsidiaries of the transactions contemplated by
the Transaction Documents which has not been obtained or waived.
<PAGE>
CareMatrix Corporation
, 1996
Page 3
6. To our knowledge, there is no action, suit, proceeding or
investigation pending or threatened against Standish or any Acquisition
Subsidiary which would, if decided adversely to Standish or any Acquisition
Subsidiary, have a materially adverse affect on the assets of Standish or any
Acquisition Subsidiary or adversely affect the right of Standish to enter into
the Transaction Documents or to consummate the transactions contemplated
thereby.
7. The authorized capital stock of the Standish consists of: _________
shares of Common Stock, $.01 par value, of which _____ shares are outstanding;
______ shares of Preferred Stock, par value $.01 per share, of which _______ are
outstanding. All issued and outstanding shares of the Standish's Common Stock
have been duly authorized and validly issued and are fully paid and
non-assessable and free of preemptive rights. We know of no outstanding
warrants, options, convertible securities or other rights requiring the issuance
of shares of capital stock of Standish or for the issuance of any securities
convertible in or exchangeable for shares of capital stock of Standish.
8. Upon the filing of the Certificates of Merger with the Secretary of
State of State of Delaware, the Merger shall be duly consummated in accordance
with the Delaware Law with the effect provided therein and in Section 1.2 of the
Agreement.
9. The holders of not more than ten percent of Standish's Common Stock
have appraisal rights arising out of the consummation of the transactions
contemplated by the Transaction Documents.
Our opinions set forth above are subject to the following
qualifications:
(A) In rendering these opinions, we have examined and relied on all of
the representations and warranties as to matters of fact and upon all of the
covenants contained in the Transaction Documents and certificates of certain
officers of Standish.
(B) For the purpose of these opinions, we have assumed that CareMatrix
has all requisite power and authority and has taken all necessary corporate and
other action to enter into the Agreement and to effect the transactions
contemplated thereby.
(C) The opinions expressed above are qualified to the extent the
validity or enforceability of any provision in the Transaction Documents, or of
any rights granted to you pursuant thereto, may be subject to and affected by
applicable bankruptcy, solvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the rights of creditors generally. No
opinion is expressed as to whether any provision of the Transaction Documents is
specifically enforceable in equity, whether such enforceability is considered in
a proceeding in equity or at law.
<PAGE>
CareMatrix Corporation
, 1996
Page 4
(D) We have made such examination of the Delaware General Corporation
Law and federal law as we have deemed relevant for the purpose of this opinion,
but we have not made an independent review or investigation of the laws of any
other state or jurisdiction and express no opinion as to the laws of any such
state or jurisdiction.
(E) Where we have indicated that our opinion is to our knowledge or
relates to matters or documents known to us, this opinion is based solely upon
the actual knowledge of facts or other information by those attorneys in our
firm who have been actively involved in the preparation and negotiation of the
Transaction Documents.
This opinion is solely for your benefit in connection with the
Agreement and the transactions contemplated thereby, and may not be quoted to,
or relied upon, or furnished to any other person or entity without our prior
written consent.
Our rendering of this opinion to you does not obligate us to render any
further opinion to you or to update this opinion at any time in the future.
Very truly yours,
Robinson & Cole
The Standish Care Company
, 1996
Page 1
Exhibit 10.5
, 1996
The Standish Care Company
6 New England Executive Park
Burlington, MA 01803
Gentlemen:
This opinion is furnished to you pursuant to Section 10.8 of the
Agreement and Plan of Merger dated July 3, 1996, (the "Agreement"), by and among
The Standish Care Company ("Standish") and the twelve subsidiaries of Standish
listed on Schedule I hereto (the "Acquisition Subsidiaries"), to whom this
letter is addressed, and each of the twelve corporations listed on Schedule II
hereto (each of which is referred to herein as a "CareMatrix Corporation" and
all of which are collectively referred to as "CareMatrix").
We have acted as counsel to CareMatrix in connection with the execution
and delivery of the Agreement and the transactions contemplated thereby.
In rendering our opinion we have examined the Agreement, the
Certificates of Merger executed by each CareMatrix Corporation (the
"Certificates of Merger"), and such laws, certificates of public officials,
certificates of officers of each CareMatrix Corporation, instruments, documents,
and corporate records, and have made such other investigations, as we have
deemed necessary in connection with the opinions hereinafter set forth. In such
examination we have assumed (i) the genuineness of all signatures on
certificates and documents other than those of each CareMatrix Corporation, (ii)
the accuracy, completeness and authenticity of all records and documents
submitted to us as originals, and (iii) the conformity to the original of all
documents submitted to us as certified, conformed or photostatic copies.
The Agreement and the Certificates of Merger are collectively referred
to herein as the "Transaction Documents." Capitalized terms used but not defined
herein shall have the meanings attributed to them in the Agreement.
<PAGE>
The Standish Care Company
, 1996
Page 2
Based upon the foregoing, and subject to the qualifications and
exceptions set forth herein, having regard for legal considerations we deem
relevant, we are of the opinion that:
1. Each CareMatrix Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware (except
for A.M.A. New Jersey Development, Inc. which is a corporation duly organized,
validly existing and in good standing under the laws of the state of New
Jersey). Each CareMatrix Corporation is duly qualified and in good standing as a
foreign corporation in every jurisdiction where each such CareMatrix Corporation
is required to be so qualified, except where the failure to be so qualified
would not have a material adverse effect on the business or assets of such
CareMatrix Corporation.
2. Each CareMatrix Corporation has the corporate power and authority
necessary to own and hold the properties each now purports to own and hold and
to conduct its business substantially as now conducted; and each CareMatrix
Corporation has the corporate power and authority necessary to enter into the
Transaction Documents and the transactions contemplated thereby and to carry out
the respective terms thereof.
3. The execution and delivery by each CareMatrix Corporation of the
Transaction Documents and the performance by each CareMatrix Corporation of its
respective obligations under the Agreement have been duly authorized by all
necessary corporate action on the part of each CareMatrix Corporation. Each of
the Transaction Documents has been duly executed and delivered by each
CareMatrix Corporation. The Agreement constitutes legal, valid and binding
obligations of each CareMatrix Corporation, enforceable against each CareMatrix
Corporation in accordance with its terms.
4. The execution and delivery by each CareMatrix Corporation of the
Transaction Documents, and the performance by them of their obligations
thereunder, will not (a) violate or contravene any provision of their respective
charter documents or bylaws or any statute, rule or regulation, (b) result in a
breach of or cause a default under or give rise to any termination, cancellation
or acceleration of the maturity of any payment date under the terms or
conditions of any indenture, agreement or other instrument known to us to which
any of the CareMatrix Corporations is a party or by which any assets of any of
the CareMatrix Corporations are bound, (c) violate any order, writ, judgment,
injunction or decree known to us by which any of the CareMatrix Corporations is
bound or to which any of them is subject, or (d) to our knowledge, result in the
creation of any lien, pledge, charge or encumbrance upon any of the assets of
any CareMatrix Corporation.
5. No consent, approval, authorization, order, filing, registration or
qualification of or with any court, governmental authority or, to our knowledge,
any third person is required as a condition precedent to the consummation by
each CareMatrix Corporation of
<PAGE>
The Standish Care Company
, 1996
Page 3
the transactions contemplated by the Transaction Documents which has not been
obtained or waived.
6. To our knowledge, there is no action, suit, proceeding or
investigation pending or threatened against any CareMatrix Corporation which
would, if decided adversely to any CareMatrix Corporation, have a materially
adverse affect on the assets of the CareMatrix Corporations, taken as a whole,
or adversely affect the right of any CareMatrix Corporation to enter into the
Transaction Documents or to consummate the transactions contemplated thereby.
7. The authorized capital stock of each CareMatrix Corporation (other than
A.M.A. New Jersey Development, Inc. and CCC of Maryland, Inc.) consists of:
______ shares of Common Stock, $.01 par value, of which _____ shares are
outstanding. A.M.A. New Jersey Development, Inc. has _____ shares of authorized
capital stock, no par value, of which _____ shares are outstanding, and CCC of
Maryland, Inc. has _____ shares of authorized capital stock, $.01 par value, of
which _____ are outstanding. All issued and outstanding shares of CareMatrix
Common Stock have been duly authorized and validly issued and are fully paid and
non-assessable and free of preemptive rights. We know of no outstanding
warrants, options, convertible securities or other rights requiring the issuance
of shares of capital stock of any of the CareMatrix Corporations or for the
issuance of any securities convertible in or exchangeable for shares of capital
stock of any of the CareMatrix Corporations.
8. Upon the filing of the Certificates of Merger with the Secretary of
State of State of Delaware, the Merger shall be duly consummated in accordance
with Delaware Law with the effect provided therein and in Section 1.2 of the
Agreement.
Our opinions set forth above are subject to the following qualifications:
(A) In rendering these opinions, we have examined and relied on all of
the representations and warranties as to matters of fact and upon all of the
covenants contained in the Transaction Documents and certificates of certain
officers of each CareMatrix Corporation.
(B) For the purpose of these opinions, we have assumed that Standish
and the Acquisition Corporations each has all requisite power and authority and
has taken all necessary corporate and other action to enter into the Agreement
and to effect the transactions contemplated thereby.
(C) The opinions expressed above are qualified to the extent the validity
or enforceability of any provision in the Transaction Documents, or of any
rights granted to you
<PAGE>
The Standish Care Company
, 1996
Page 4
pursuant thereto, may be subject to and affected by applicable bankruptcy,
solvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the rights of creditors generally. No opinion is expressed as to
whether any provision of the Transaction Documents is specifically enforceable
in equity, whether such enforceability is considered in a proceeding in equity
or at law.
(D) We have made such examination of the Delaware General Corporation
Law and federal law as we have deemed relevant for the purpose of this opinion,
but we have not made an independent review or investigation of the laws of any
other state or jurisdiction and express no opinion as to the laws of any such
state or jurisdiction.
(E) Where we have indicated that our opinion is to our knowledge or
relates to matters or documents known to us, this opinion is based solely upon
the actual knowledge of facts or other information by those attorneys in our
firm who have been actively involved in the preparation and negotiation of the
Transaction Documents.
This opinion is solely for your benefit in connection with the
Agreement and the transactions contemplated thereby, and may not be quoted to,
or relied upon, or furnished to any other person or entity without our prior
written consent.
Our rendering of this opinion to you does not obligate us to render any
further opinion to you or to update this opinion at any time in the future.
Very truly yours,
Nutter, McClennen & Fish, LLP
<PAGE>
THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Agreement entered into as of this ____ day of September, 1996, by and
between The Standish Care Company, a Delaware corporation with its principal
place of business at 6 New England Executive Park, Burlington, Massachusetts
01803 (hereinafter referred to as the "Company"), and Michael J. Doyle
(hereinafter called the "Employee"), residing in Winchester, Massachusetts.
W I T N E S S E T H:
WHEREAS, the Company is a health care services company specializing in
assisted-living, a service-intensive form of housing for frail but functional
seniors. The Company's two principal business activities are acquiring and
operating assisted-living communities, primarily in the eastern United States,
and providing development, management, marketing and other services to third
party owners of other assisted living communities; and
WHEREAS, the Employee is experienced in the business which the Company
operates; and
WHEREAS, the Company has employed the Employee since 1989, first as
President and Chief Executive Officer, then, effective as of January 1, 1994, as
Chairman of the Board as well as President and Chief Executive Officer of the
Company; and
WHEREAS, the Company and the Employee are parties to that certain Second
Amended and Restated Employment Agreement dated as of July 1, 1995 (hereinafter
called the "Employment Agreement") providing for the terms and conditions
governing Employee's employment with the Company; and
WHEREAS, the Company, subsidiary acquisition corporations of the Company
(the "Company Subsidiary"), twelve companies engaged in the business of
providing long-term care services through the operation and management of
assisted living communities owned by a common group of stockholders (each a
"CareMatrix Corporation" and collectively, "CareMatrix") have entered into an
Agreement and Plan of Merger dated as of July ___, 1996 (the "Merger Agreement")
pursuant to which the Company will acquire CareMatrix and issue to the
stockholders of CareMatrix an aggregate of ____ million (____________) newly
issued shares of Common Stock of the Company (the "CareMatrix Business
Combination");
WHEREAS, a condition precedent to the consummation of the CareMatrix
Business Combination and related transactions contemplated by the Merger
Agreement is the execution of this
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<PAGE>
Third Amended and Restated Employment Agreement by and between the Company and
the Employee; and
WHEREAS, the Company and the Employee desire to consummate the transactions
contemplated by the Merger Agreement and to execute this Agreement; and
WHEREAS, the Company's Board of Directors considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its stockholders; and
WHEREAS, in this connection, the Company further recognizes that, as is the
case with many publicly held corporations, the possibility of a change of
control may arise and that such possibility, and the uncertainty and questions
which it may raise among management, may result in distraction or other
potentially disturbing circumstances to the detriment of the Company and its
stockholders; and
WHEREAS, the Board of Directors has further determined that it is
appropriate to reinforce and encourage the continued attention and dedication of
members of the Company's management to their assigned duties without distraction
in circumstances arising from the possibility of a change in control of the
Company; and
WHEREAS, the Company desires to induce the Employee to remain in the employ
of the Company with an assurance of fair treatment to reduce the distractions
and other adverse effects on his performance which are inherent in a hostile
takeover threat; and
WHEREAS, the Company and the Employee desire to amend and restate in their
entirety the terms and conditions of the Employment Agreement and otherwise
governing Employee's employment with the Company and by execution of this
Agreement specifically agree that all prior agreements between the parties
hereto pertaining to Employee's employment with the Company are null and void
and of no force and effect.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto, it is hereby agreed by and between the Company and the
Employee as follows:
1. Definitions. Whenever used in this Agreement, the following terms shall
have the meanings set forth below:
(a) "Beneficial Owner" means with respect to any security any person who,
directly or indirectly, through any
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<PAGE>
contract, arrangement, understanding, relationship or otherwise has or shares
voting power, which includes the power to vote, or to direct the voting of, such
security; and/or investment power, which includes the power to dispose, or to
direct the disposition of, such security, and shall be determined in a manner
consistent with Rule 13d-2 under the Securities Exchange Act of 1934 ("1934
Act"), as now in effect and as the same may be amended from time to time.
(b) "Business Combination" means any of the following transactions: (x) a
merger or consolidation of the Company (except for a merger in respect of which,
pursuant to Section 251(f) of the Delaware General Corporation Law, as now in
effect and as the same may be amended from time to time, no vote of the
stockholders of the Company is required); (y) a sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one transaction or a series of
transactions), whether as part of a dissolution or otherwise, of assets of the
Company or of any direct or indirect majority-owned subsidiary of the Company
(other than to any direct or indirect wholly-owned subsidiary or to the Company)
having an aggregate market value equal to 90 percent or more of either that
aggregate market value of all of the assets of the Company determined on a
consolidated basis or the aggregate market value of all the outstanding stock of
the Company; or (z) a consummated tender or exchange offer for 50% or more of
the outstanding voting stock of the Company by any person other than the Company
itself.
(c) "Change in Control" of the Company shall be deemed to have occurred if:
(i) any person (as defined in Section 13(d) or 14(d)(2) of the 1934
Act shall have become the Beneficial Owner of 35 percent or more
of the combined voting power of the Company's Voting Securities
(other than the Employee, or any other person who is Beneficial
Owner of such 35 percent threshold at the date of this
Agreement), not counting for purposes of such 35 percent
threshold any Voting Securities acquired from the Employee;
(ii) 80 percent of the Incumbent Board shall have ceased for any
reason to constitute a majority the Board;
(iii) the stockholders approve by the requisite vote any Business
Combination; or
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<PAGE>
(iv) the stockholders approve the complete liquidate or dissolution of
the Company.
(d) "Good Reason" means any of the following (without the Employee's
express written consent):
(i) the assignment of duties inconsistent with Employee's duties as
Chairman and Chief Executive Officer of the Company immediately
prior to the Change in Control of the Company, or a change of an
adverse nature in the Employee's position an officer or Director
of the Company prior to a Change in Control of the Company, or
any removal from or any failure to reelect the Employee to any of
such positions, except in connection with termination of the
Employee's employment for reasons specified in paragraphs (b),
(c) or (d) of Section 10 hereof; or
(ii) any failure by the Company to continue in effect any benefit or
arrangement (including, without limitation, the Company's group
life insurance plan, senior executive life insurance supplement
and medical, accident and disability plans) which the Employee is
participating at the time of a Change in Control of the Company,
or the taking of any action by the Company which would adversely
affect the Employee's participating in or materially reduce the
Employee's benefits thereto deprive the Employee of any material
fringe benefit enjoyed by the Employee at the time of a Change in
Control of the Company;
(iii) any failure by the Company to continue in effect the Company's
Restated 1991 Combination Stock Option Plan;
(iv) a change in the location of the Employee's principal place of
work away from the area of the United States located east of the
Mississippi River;
(v) any breach by the Company of any material provision of this
Agreement not cured within 60 days thereof; or
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<PAGE>
(vi) any failure by the Company to obtain the assumption of this
Agreement by any successor or assignee of the Company.
(e) "Hostile Change of Control" means a transaction, event or
election constituting a Change in Control, which was not approved by, or, in an
election, the directors elected were not nominated or elected by, at least a
majority of the Incumbent Board in office immediately prior to the Change in
Control.
(f) "Incumbent Board" means individuals, including the Employee, who
constitute a majority of the Board of Directors of the Company as constituted on
the date of this Agreement; provided, that any individual becoming a director
subsequent to the date of this Agreement whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least 80
percent of the directors comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without objection to such nomination) shall
be, for purposes of this Agreement, considered as though such person were a
member of the Incumbent Board.
(g) "Voting Securities" means the Company's outstanding securities
entitled to vote generally in the election of directors.
2. Term. The initial term of this Agreement ("Initial Term") shall
commence on the date hereof and expire on September __, 1999, and thereafter
shall continue on a year to year basis for an indefinite number of renewal terms
("Renewal Terms") unless either party otherwise elects upon six (6) months
written notice to the other prior to expiration of the Initial Term or any then
effective Renewal Term, subject in case of both the Initial Term and any Renewal
Term to earlier termination as provided herein.
3. Duties and Responsibilities. The Employee shall be employed as Chief
Executive Officer of the Company and the Chief Executive Officer of each
CareMatrix Corporation or in such other capacities as the Board of Directors may
from time to time reasonably determine recognizing the nature and scope of the
Employee's employment. The Employee shall have full rights, benefits, powers and
responsibilities customarily associated with such office. The Employee agrees to
perform such duties and discharge such responsibilities in a faithful manner and
to the best of his ability. The Employee agrees to devote his full business
time, energy and experience to the business and affairs of the Company and to
use his best efforts to promote the interests of the Company. The Employee may
delegate duties to
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<PAGE>
other employees as he, in his sole discretion, reasonably determines is in the
best interest of the Company; provided however, the Employee shall at all times
operate under the authority and power given to him by the Board of Directors of
the Company.
4. Employment and Compensation. The Company agrees to employ the Employee
and the Employee agrees to be employed by the Company for the performance of the
duties set forth above at a base annual salary ("Base Salary") at the rate of
Two Hundred Fifty Thousand Dollars ($250,000) for the period beginning on the
date hereof and ending on September ___, 1999, and thereafter unless and until
increased, payable in arrears in equal semi-monthly installments. Any increases
to the Employee's Base Salary shall be made at the discretion of the Board of
Directors.
5. Employee Benefits. The Company shall provide the Employee an annual
automobile allowance of $10,000, plus operating expenses and minor repairs, and
a parking space at the Company's executive offices. The Employee shall be
entitled to the comprehensive health benefits package in existence from time to
time for the executive officers of the Company, including but not limited to
Blue Cross/Blue Shield-Master Health Plus or comparable coverage. In the event
such coverage is dropped by the Company, a similar comprehensive health
insurance plan shall be provided to the Employee. The Employee will be entitled
to participate in the CareMatrix 401(k) Employee Savings Plan without any
waiting period. The Employee shall also receive such additional benefits, if
any, provided for the executive officers of the Company that may be authorized
from time to time by the Board of Directors of the Company in its sole
discretion.
6. Bonus. The Employee shall receive a bonus. The determination of
the amount of such bonus, if any, and the time and method of payment of such
bonus shall be vested in the sole discretion of the Board of Directors of the
Company.
7. Withholding Taxes. The Company shall have the right to deduct or
withhold from any payments made to the Employee all taxes which may be required
to be deducted or withheld under any provision of law (including, but not
limited to, Social Security payments, income tax withholding and any other
deduction or withholding required by law) now in effect or which may become
effective any time during the term of this Agreement.
8. Expenses. Subject to the authority of the Board of Directors of the
Company to fix and determine policies relating to such matters, the Company
agrees to reimburse the Employee for all reasonable expenses incurred by him as
the Company deems
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<PAGE>
ordinary and necessary, in connection with the business of the
Company and as are represented by appropriate documentation.
9. Insurance. The Company shall acquire and maintain a policy of insurance
to be owned by and for the benefit of the Employee and a beneficiary to be
designated by the Employee, covering the Employee for life insurance in the
amount of $500,000. The Employee agrees that the Company, in its sole
discretion, may acquire and maintain a policy or policies of insurance to be
owned by and for the benefit of the Company, covering the Employee for life,
medical or disability insurance in any amounts deemed advisable by the Company,
and the Employee waivers any rights, title or interest in and to any of such
policies representing such insurance. The Employee agrees to submit to any
required examination and to execute, sign and deliver all applications and other
documents necessary to effectuate such insurance coverage.
10. Termination of Employment.
--------------------------
(a) Termination Due to Hostile Changes in Control. If a Hostile
Change in Control of the Company occurs while the Employee is still employed by
the Company and the Employee's employment is terminated as of a date prior to
the end of the Initial Term of any Renewal Term within a 24-month period
thereafter, the Employee shall be entitled to the compensation set forth below
in the next succeeding paragraph unless such termination is demonstrated by the
Company to be a result of (1) the Employee's disability or death (as provided
for in Section 10(b) below), (2) the Employee's termination for cause (as
provided for in Section 10(c) below), or (3) the Employee's election to
terminate his employment other than for Good Reason (as defined in Section 1(c)
above).
If the Company terminates the Employee's employment other than as set
forth in the immediately preceding paragraph of this Section 10(a), then the
Company must pay the Employee a lump sum severance payment (the "Lump Sum
Severance Payment"), in cash, equal to 2.99 times the yearly average of his
total compensation (consisting of Base Salary and any cash bonus) payable to the
Employee with respect to the five full calendar years (or such lesser number
since the calendar year ended December 31, 1992) preceding the Change in Control
of the Company; provided, however, that if the Lump Sum Severance Payment under
this Section 10(a), either alone or together with other payments which the
Employee has the right to receive from the Company, would constitute a
"parachute payment" (as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the "Code")), such Lump Sum Severance Payment shall be reduced
to the largest amount as will result in no portion of the lump sum severance
payment
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<PAGE>
being subject to the excise tax imposed under Section 4999 of the Code.
The determination of any reduction in the lump sum payment pursuant to the
immediately preceding sentence shall be made by the Employee in good faith, and
such determination shall be conclusive and binding on the Company.
(b) Termination Due to Disability or Death. In the event that the
Employee is unable to perform his duties hereunder on account of illness or
other incapacity (other than death), and such illness or other incapacity shall
prevent him from performing the same for a period of six or more consecutive
months, the Company shall have the right, on 30 days' prior written notice to
the Employee, to terminate his employment pursuant to this Agreement, and in
such event the Company shall not be obligated to pay the Employee any further
compensation, except for any amounts due him or accrued by him up to the date of
such termination. In the event that the Employee dies, his employment pursuant
to this Agreement shall terminate effective at the end of the month during which
his death occurs.
(c) Termination by the Company for Certain Other Events. The Company
shall have the right to terminate Employee's employment under this Agreement
upon at least 30 days' prior written notice to Employee and without any
obligation from and after the effective date of such termination to pay any
further compensation or furnish any other benefits of any nature whatsoever, in
the event (a) there is a good faith finding by a majority of the entire Board of
Directors of the Company of dishonesty or wilful misconduct by the Employee in
performing his assigned duties, or (b) the Employee is convicted of, or enters a
plea of guilty or nolo contendre to, any crime involving moral turpitude or any
felony which has the effect of causing termination or suspension of any license
or permit which the Company holds or which materially and adversely affects the
Company.
(d) Termination by Either Party. Notwithstanding any other provision
hereof to the contrary, employment pursuant to this Agreement may be terminated
by either party, if there has been a breach in any material respect of this
Agreement by the other party and such breach has not been cured within 30 days
of written notice to the breaching party.
(e) Continued Payment in Certain Event. Termination of employment
pursuant to this Agreement by the Company for any other reason not covered under
any of paragraphs (a), (b), (c) or (d) above will not relieve the Company of its
obligation to continue payment of the remaining portion of Base Salary
compensation due under this Agreement for the balance of the
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<PAGE>
Initial Term only, unless the Company shall have paid the Lump Sum Severance
Payment in accordance with Section 10(a).
11. Non-Competition.
----------------
(a) For so long as Employee is employed by the Company, and (i) for
a period of one (1) year after termination of employment by the Company under
Section 10(b) (other than death), 10(c) or 10(d) or by the employee for any
reason other than as stated in Section 10(d), and (ii) for a period of six
months after termination by the Company for any reason not stated in Section 10,
as the case may be (the "Non-Competition Period"), Employee will not, without
the express written consent of the Company, directly or indirectly, engage in,
participate in, or assist, as owner, part-owner, partner, director, officer,
trustee, employee, agent or consultant, or in any other capacity, any business
organization the business or activities of which are substantially similar to or
directly competitive with any business or activity conducted by the Company,
including without limitation the planning, development, management, operation,
leasing and acquisition of, or providing consulting services pertaining to,
independent living facilities, assisted living facilities, nursing homes and
other health care facilities or a home health care program for the elderly, or
small retirement living projects within a twenty (20) mile radius of Company
head-quarters, any Company regional office or any assisted-living facility or
community operated by the Company or planned to operated by the Company during
the term of the Employee's employment by the Company.
(b) In addition, during the Non-Competition Period the Employee will
not (i) attempt to hire any director, officer, employee or agent of the Company,
(ii) assist in such attempt hiring by any other person, (iii) encourage any
person to terminate his or her employment or business relationship with the
Company, (iv) encourage any customer or supplier of the Company to terminate its
relationship with the Company, (v) obtain, assist in obtaining, for Employee's
own benefit (other than indirectly as an employee of the Company) any customer
of the Company, (vi) encourage any customer or supplier not to enter in or renew
a business relationship with the Company.
(c) The Employee acknowledges and agrees that foregoing territorial,
time and other limitations are reasonable and properly required for the adequate
protection of the business and affairs of the Company, and in the event that any
of territorial, time or other limitations is found to be unreasonable by a court
of competent jurisdiction, the Employee agrees and submits to the reduction of
such territorial, time or other limitations to such an area, period or otherwise
as the
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<PAGE>
court may determine to be reasonable. In the event that any limitation under
this Section 11 is found to be unreasonable or otherwise invalid in whole or in
part in any jurisdiction, the Employee agrees that such limitation shall be and
remain valid in other jurisdictions.
(d) The Employee acknowledges, warrants and agrees that the
restrictive covenants contained in this Section 11 are necessary for the
protection of the Company's legitimate business interests and are reasonable in
scope and content.
(e) Nothing in paragraphs (a) - (d) of this Section 11 shall
preclude Employee from making passive investments in more than 5% of a class of
securities of any business enterprise registered under the Securities Exchange
Act of 1934 the business or activities of which are substantially similar to or
directly competitive with the Company as proscribed under Section 11(a) above.
12. Protection of Proprietary Information. During the course of his
employment as an executive officer of the Company the Employee will have access
to and will gain knowledge with respect to all of the activities and lines of
business the Company will enter, including the planning, development, management
and operation of independent living and assisted living facilities, nursing
homes and other health care facilities and a home health care program for
elderly or infirm people and small retirement living projects, the Company's
research and development techniques with respect to such facilities, homes,
projects and programs, the preparation of market and demand and cost containment
studies, project evaluation methods, facility development programs, management
techniques related to all aspects of such facilities, homes, projects and
programs and related businesses and other valuable and confidential information
relating to the business and activities of the Company ("Confidential
Information"). The parties acknowledge that unauthorized disclosure or misuse of
the Confidential Information could cause irreparable damage to the Company. The
parties also agree that covenants by the Employee not to make unauthorized
disclosures of the Confidential Information and not to use the Confidential
Information after the termination of the Employee's employment with the Company
in a business in competition with that of the Company are essential to the
growth and stability of the business of the Company. Accordingly, the Employee
agrees that, except as required by his duties under this Agreement, he shall not
use or disclose to anyone at any time during or after the term of his employment
by the Company any Confidential Information obtained by him in the course of his
employment with the Company.
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<PAGE>
The parties acknowledge that the Employee has obtained valuable knowledge,
experience, and information relative generally to the business the Company
presently intends to pursue prior to his employment with the Company (the "Prior
Confidential Information"). The Prior Confidential Information shall be deemed
to be Confidential Information for purposes of this Section. However, the Prior
Confidential Information shall be subject to the nondisclosure requirements of
this Section for time periods identical to those in Section 11(a) relating to
the Non-Competition Period and for the related termination reasons contained
therein, rather than the infinite time limitations provided in this Section 11
for the Confidential Information.
13. Remedies. In the event of any breach or threatened breach by the
Employee of the provisions of Sections 11 or 12 of this Agreement, the Company
shall be entitled to an injunction restraining such breach in addition to, and
not to the exclusion of, other remedies or relief. Employee acknowledges that
his employment by Company imposes on him a duty to act prudently and for the
benefit of Company in all matters connected with or related to his employment
and the officers he holds in the Company. Employee agrees that in the event that
he violates his duty of loyalty to Company, in addition to any and all other
remedies which the Company may have available to it, Company will be entitled,
at its election, to recover from Employee (i) the value of anything belonging to
the Company which Employee uses in breach of such duty, or (ii) any benefit
which Employee receives as a result of violating his duty of loyalty, or its
proceeds, and the Company shall also be entitled to recover from Employee the
amount of damages thereby caused. In the event of termination of Employee's
employment for breach in any material respect of any of the covenants under this
Employment Agreement, Employee agrees that he shall thereby forfeit all rights
granted to him under any stock option, profit participation, bonus or deferred
compensation arrangement of the Company then existing in which he participates
or has an interest or right, to the extent permitted by law. Nothing herein
shall be construed as prohibiting either party from pursuing any other remedies
available to him or it for any other breach or threatened breach of this
Agreement by the other party, including the recovery of damages from the other
party.
14. Notices. Any notice or other communication pursuant to this
Agreement shall be in writing and shall be personally delivered or sent by
certified or registered mail or by commercial overnight (receipted) courier
addressed to the respective parties as follows:
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If to the Company, to:
CareMatrix Corporation
197 First Avenue
Needham, MA 02194
Attention: Andrew D. Gosman, President
If to the Employee, to:
Michael J. Doyle, Chief Executive Officer
CareMatrix Corporation
197 First Avenue
Needham, MA 02194
15. Governing Law. This Agreement shall be governed in all respects
by the laws of the Commonwealth of Massachusetts.
16. Waiver. Any waiver of a breach of any of the provisions of this
Agreement shall not be deemed to be a waiver of any other provision or breach
of this Agreement.
17. Effect of Headings. Any title of an article or section heading
herein contained is for convenience of reference only, and shall not affect
the meaning or construction of any of the provisions hereof.
18. Miscellaneous.
(a) The parties agree that each provision contained in this
Agreement shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of
any of the other clauses herein. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to scope, activity or subject so as to be unenforceable at all, such
provision or provisions shall be construed by the appropriate judicial body by
limiting and reducing it or them, so as to be enforceable to the extent
compatible with the applicable law.
(b) This Agreement contains the whole agreement as such relates to
the subject matter hereof between the parties hereto and the parties expressly
acknowledge that there are no inducements, promises, terms, conditions or
obligations made or entered into by the Company or the Employee other than
contained herein. This Agreement may not be amended except by a writing signed
by both parties.
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<PAGE>
19. Effect of Prior Agreements/Entire Agreement. The parties agree that any
prior written or oral agreements relating to the subject matter hereof are
hereby terminated and are superseded by this agreement. This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof, and all promises, representations, understandings, warranties and
agreements with reference to the subject matter hereof and inducements to the
making of this Agreement relied upon by any party hereto have been expressed
herein.
IN WITNESS WHEREOF, the parties hereto or their duly authorized
representatives have signed, sealed and delivered this Agreement effective as of
the day and year first above written.
CAREMATRIX CORPORATION
By:
----------------------------------
Andrew D. Gosman, President
EMPLOYEE
------------------------------------
Michael J. Doyle
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Agreement entered into as of this ____ day of September, 1996, by and
between The Standish Care Company, a Delaware corporation with its principal
place of business at 6 New England Executive Park, Burlington, Massachusetts
01803 (hereinafter referred to as the "Company"), and Kenneth M. Miles
(hereinafter called the "Employee"), residing in Chelmsford, Massachusetts.
W I T N E S S E T H:
WHEREAS, the Company is a health care services company specializing in
assisted-living, a service-intensive form of housing for frail but functional
seniors. The Company's two principal business activities are acquiring and
operating assisted-living communities, primarily in the eastern United States,
and providing development, management, marketing and other services to third
party owners of other assisted living communities; and
WHEREAS, the Employee is experienced in the business which the Company
operates; and
WHEREAS, the Company has employed the Employee since 1992, first as
Controller, then as Treasurer and a Vice President and, effective as of November
1, 1994, as Chief Financial Officer of the Company; and
WHEREAS, the Company and the Employee are parties to that certain
Employment Agreement dated as of July 1, 1995, as amended by that First
Amendment dated as of March 1, 1996 (hereinafter called the "Employment
Agreement") providing for the terms and conditions governing Employee's
employment with the Company; and
WHEREAS, the Company, subsidiary acquisition corporations of the Company
(the "Company Subsidiary"), approximately twelve companies engaged in the
business of providing long-term care services through the operation and
management of assisted living communities owned by a common group of
stockholders (each a "CareMatrix Corporation" and collectively, "CareMatrix")
have entered into an Agreement and Plan of Merger dated as of July ___, 1996
(the "Merger Agreement") pursuant to which the Company will acquire CareMatrix
and issue to the stockholders of CareMatrix an aggregate of ____ million
(____________) newly issued shares of Common Stock of the Company (the
"CareMatrix Business Combination");
WHEREAS, a condition precedent to the consummation of the CareMatrix
Business Combination and related transactions
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<PAGE>
contemplated by the Merger Agreement is the execution of this Amended and
Restated Employment Agreement by and between the Company and the Employee; and
WHEREAS, the Company and the Employee desire to consummate the transactions
contemplated by the Merger Agreement and to execute this Agreement; and
WHEREAS, the Company's Board of Directors considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its stockholders; and
WHEREAS, in this connection, the Company further recognizes that, as is the
case with many publicly held corporations, the possibility of a change of
control may arise and that such possibility, and the uncertainty and questions
which it may raise among management, may result in distraction or other
potentially disturbing circumstances to the detriment of the Company and its
stockholders; and
WHEREAS, the Board of Directors has further determined that it is
appropriate to reinforce and encourage the continued attention and dedication of
members of the Company's management to their assigned duties without distraction
in circumstances arising from the possibility of a change in control of the
Company; and
WHEREAS, the Company desires to induce the Employee to remain in the employ
of the Company with an assurance of fair treatment to reduce the distractions
and other adverse effects on his performance which are inherent in a hostile
takeover threat; and
WHEREAS, the Company and the Employee desire to amend and restate in their
entirety the terms and conditions governing Employee's employment with
theCompany and by execution of this Agreement specifically agree that all prior
agreements between the parties hereto pertaining to Employee's employment with
the Company are null and void and of no force and effect.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto, it is hereby agreed by and between the Company and the
Employee as follows:
1. Definitions. Whenever used in this Agreement, the following terms shall
have the meanings set forth below:
(a) "Beneficial Owner" means with respect to any security any person
who, directly or indirectly, through any
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contract, arrangement, understanding, relationship or otherwise has or shares
voting power, which includes the power to vote, or to direct the voting of, such
security; and/or investment power, which includes the power to dispose, or to
direct the disposition of, such security, and shall be determined in a manner
consistent with Rule 13d-2 under the Securities Exchange Act of 1934 ("1934
Act"), as now in effect and as the same may be amended from time to time.
(b) "Business Combination" means any of the following transactions: (x)
a merger or consolidation of the Company (except for a merger in respect of
which, pursuant to Section 251(f) of the Delaware General Corporation Law, as
now in effect and as the same may be amended from time to time, no vote of the
stockholders of the Company is required); (y) a sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one transaction or a series of
transactions), whether as part of a dissolution or otherwise, of assets of the
Company or of any direct or indirect majority-owned subsidiary of the Company
(other than to any direct or indirect wholly-owned subsidiary or to the Company)
having an aggregate market value equal to 90 percent or more of either that
aggregate market value of all of the assets of the Company determined on a
consolidated basis or the aggregate market value of all the outstanding stock of
the Company; or (z) a consummated tender or exchange offer for 50% or more of
the outstanding voting stock of the Company by any person other than the Company
itself.
(c) "Change in Control" of the Company shall be deemed to have occurred
if:
(i) any person (as defined in Section 13(d) or 14(d)(2) of the 1934 Act
shall have become the Beneficial Owner of 35 percent or more of the
combined voting power of the Company's Voting Securities (other than
the Employee, Michael J. Doyle ("Doyle"), the Company's Chairman and
Chief Executive Officer, or any other person who is Beneficial Owner
of such 35 percent threshold at the date of this Agreement), not
counting purposes of such 35 percent threshold any Voting Securities
acquired from the Employee or Doyle;
(ii) 80 percent of the Incumbent Board shall have ceased for any reason to
constitute a majority the Board;
(iii) the stockholders approve by the requisite vote any Business
Combination; or (iv) the stockholders approve the complete liquidate
or dissolution of the Company.
(d) "Good Reason" means any of the following (without the Employee's
express written consent):
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(i) the assignment of duties inconsistent with Employee's duties as Chief
Financial Officer of the Company immediately prior to the Change in
Control of the Company, or a change of an adverse nature in the
Employee's position an officer or Director of the Company prior to a
Change in Control of the Company, or any removal from or any failure
to reelect the Employee to any of such positions, except in connection
with termination of the Employee's employment for reasons specified in
paragraphs (b), (c) or (d) of Section 10 hereof; or
(ii) any failure by the Company to continue in effect any benefit or
arrangement (including, without limitation, the Company's group life
insurance plan, senior executive life insurance supplement and
medical, accident and disability plans) which the Employee is
participating at the time of a Change in Control of the Company, or
the taking of any action by the Company which would adversely affect
the Employee's participating in or materially reduce the Employee's
benefits thereto deprive the Employee of any material fringe benefit
enjoyed by the Employee at the time of a Change in Control of the
Company;
(iii) any failure by the Company to continue in effect the Company's
Restated 1991 Combination Stock Option Plan;
(iv) a change in the location of the Employee's principal place of work
away from the area of the United States located east of the
Mississippi River;
(v) any breach by the Company of any material provision of this Agreement
not cured within 60 days thereof; or
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(vi) any failure by the Company to obtain the assumption of this Agreement
by any successor or assignee of the Company.
(e) "Hostile Change of Control" means a transaction, event or election
constituting a Change in Control, which was not approved by, or, in an election,
the directors elected were not nominated or elected by, at least a majority of
the Incumbent Board in office immediately prior to the Change in Control.
(f) "Incumbent Board" means individuals, including the Employee, who
constitute a majority of the Board of Directors of the Company as constituted on
the date of this Agreement; provided, that any individual becoming a director
subsequent to the date of this Agreement whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least 80
percent of the directors comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without objection to such nomination) shall
be, for purposes of this Agreement, considered as though such person were a
member of the Incumbent Board.
(g) "Voting Securities" means the Company's outstanding securities
entitled to vote generally in the election of directors.
2. Term. The initial term of this Agreement ("Initial Term") shall
commence on the date hereof and expire on September __, 1998, and thereafter
shall continue on a year to year basis for an indefinite number of renewal terms
("Renewal Terms") unless either party otherwise elects upon six (6) months
written notice to the other prior to expiration of the Initial Term or any then
effective Renewal Term, subject in case of both the Initial Term and any Renewal
Term to earlier termination as provided herein.
3. Duties and Responsibilities. The Employee shall be employed as Senior
Vice President of Finance of the Company and Senior Vice President of Finance of
each CareMatrix Corporation or in such other capacities as the Board of
Directors may from time to time reasonably determine recognizing the nature and
scope of the Employee's employment. The Employee shall have full rights,
benefits, powers and responsibilities customarily associated with such office.
The Employee agrees to perform such duties and discharge such responsibilities
in a faithful manner and to the best of his ability. The Employee agrees to
devote his full business time, energy and experience to the business and affairs
of the Company and to use his best efforts to promote the interests of the
Company. The Employee shall bear the
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responsibility for the development, implementation and review of all financial
systems and regulatory and tax reporting of the Company. The Employee may
delegate duties to other employees as he, in his sole discretion, reasonably
determines is in the best interest of the Company; provided however, the
Employee shall at all times operate under the authority and power given to him
by the Board of Directors of the Company.
4. Employment and Compensation. The Company agrees to employ the Employee
and the Employee agrees to be employed by the Company for the performance of the
duties set forth above at a base annual salary ("Base Salary") at the rate of
One Hundred Twenty-Five Thousand Dollars ($125,000) for the period beginning on
the date hereof and ending on September ___, 1998, and thereafter unless and
until increased, payable in arrears in equal semi-monthly installments. Any
increases to the Employee's Base Salary shall be made at the discretion of the
Board of Directors.
5. Employee Benefits. The Company shall provide the Employee an annual
automobile allowance of $6,000, plus operating expense and minor repairs and a
parking space at the Company's executive offices. The Employee shall be entitled
to the comprehensive benefits package in existence from time to time for the
executive officers of the Company, including but not limited to Blue Cross/Blue
Shield - Master Health Plus or comparable coverage. In the event such coverage
is dropped by the Company, a similar comprehensive health insurance plan shall
be provided to the Employee. The Employee will be entitled to participate in the
CareMatrix 401(k) Employee Savings Plan without any waiting period. The Employee
shall also receive such additional benefits, if any, provided for the executive
officers of the Company that may be authorized from time to time by the Board of
Directors of the Company in its sole discretion.
6. Bonus. The Employee shall receive a bonus. The determination of
the amount of such bonus, if any, and the time and method of payment of such
bonus shall be vested in the sole discretion of the Board of Directors of the
Company.
7. Withholding Taxes. The Company shall have the right to deduct or
withhold from any payments made to the Employee all taxes which may be required
to be deducted or withheld under any provision of law (including, but not
limited to, Social Security payments, income tax withholding and any other
deduction or withholding required by law) now in effect or which may become
effective any time during the term of this Agreement.
8. Expenses. Subject to the authority of the Board of Directors of the
Company to fix and determine policies relating
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<PAGE>
to such matters, the Company agrees to reimburse the Employee for all reasonable
expenses incurred by him as the Company deems ordinary and necessary, in
connection with the business of the Company and as are represented by
appropriate documentation.
9. Insurance. The Employee agrees that the Company, in its sole
discretion, may acquire and maintain a policy or policies of insurance to be
owned by and for the benefit of the Company, covering the Employee for life,
medical or disability insurance in any amounts deemed advisable by the Company,
and the Employee waivers any rights, title or interest in and to any of such
policies representing such insurance. The Employee agrees to submit to any
required examination and to execute, sign and deliver all applications and other
documents necessary to effectuate such insurance coverage.
10. Termination of Employment.
(a) Termination Due to Hostile Changes in Control. If a Hostile Change
in Control of the Company occurs while the Employee is still employed by the
Company and the Employee's employment is terminated as of a date prior to the
end of the Initial Term of any Renewal Term within a 24-month period thereafter,
the Employee shall be entitled to the compensation set forth below in the next
succeeding paragraph unless such termination is demonstrated by the Company to
be a result of (1) the Employee's disability or death (as provided for in
Section 10(b) below), (2) the Employee's termination for cause (as provided for
in Section 10(c) below), or (3) the Employee's election to terminate his
employment other than for Good Reason (as defined in Section 1(c) above).
If the Company terminates the Employee's employment other than as set
forth in the immediately preceding paragraph of this Section 10(a), then the
Company must pay the Employee a lump sum severance payment (the "Lump Sum
Severance Payment"), in cash, equal to 1.00 times the yearly average of his
total compensation (consisting of Base Salary and any cash bonus) payable to the
Employee with respect to the five full calendar years (or such lesser number
since the calendar year ended December 31, 1992) preceding the Change in Control
of the Company; provided, however, that if the Lump Sum Severance Payment under
this Section 10(a), either alone or together with other payments which the
Employee has the right to receive from the Company, would constitute a
"parachute payment" (as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the "Code")), such Lump Sum Severance Payment shall be reduced
to the largest amount as will result in no portion of the lump sum severance
payment being subject to the excise tax imposed under Section 4999 of the Code.
The determination of any reduction in the lump sum payment
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<PAGE>
pursuant to the immediately preceding sentence shall be made by the Employee in
good faith, and such determination shall be conclusive and binding on the
Company.
(b) Termination Due to Disability or Death. In the event that the
Employee is unable to perform his duties hereunder on account of illness or
other incapacity (other than death), and such illness or other incapacity shall
prevent him from performing the same for a period of six or more consecutive
months, the Company shall have the right, on 30 days' prior written notice to
the Employee, to terminate his employment pursuant to this Agreement, and in
such event the Company shall not be obligated to pay the Employee any further
compensation, except for any amounts due him or accrued by him up to the date of
such termination. In the event that the Employee dies, his employment pursuant
to this Agreement shall terminate effective at the end of the month during which
his death occurs.
(c) Termination by the Company for Certain Other Events. The Company
shall have the right to terminate Employee's employment under this Agreement
upon at least 30 days' prior written notice to Employee and without any
obligation from and after the effective date of such termination to pay any
further compensation or furnish any other benefits of any nature whatsoever, in
the event (a) there is a good faith finding by a majority of the entire Board of
Directors of the Company of dishonesty or wilful misconduct by the Employee in
performing his assigned duties, or (b) the Employee is convicted of, or enters a
plea of guilty or nolo contendre to, any crime involving moral turpitude or any
felony which has the effect of causing termination or suspension of any license
or permit which the Company holds or which materially and adversely affects the
Company.
(d) Termination by Either Party. Notwithstanding any other provision
hereof to the contrary, employment pursuant to this Agreement may be terminated
by either party, if there has been a breach in any material respect of this
Agreement by the other party and such breach has not been cured within 30 days
of written notice to the breaching party.
(e) Continued Payment in Certain Event. Termination of employment
pursuant to this Agreement by the Company for any other reason not covered under
any of paragraphs (a), (b), (c) or (d) above will not relieve the Company of its
obligation to continue payment of the remaining portion of Base Salary
compensation due under this Agreement for the balance of the Initial Term only,
unless the Company shall have paid the Lump Sum Severance Payment in accordance
with Section 10(a).
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<PAGE>
11. Non-Competition.
(a) For so long as Employee is employed by the Company, and (i) for a
period of one (1) year after termination of employment by the Company under
Section 10(b) (other than death), 10(c) or 10(d) or by the employee for any
reason other than as stated in Section 10(d), and (ii) for a period of six
months after termination by the Company for any reason not stated in Section 10,
as the case may be (the "Non-Competition Period"), Employee will not, without
the express written consent of the Company, directly or indirectly, engage in,
participate in, or assist, as owner, part-owner, partner, director, officer,
trustee, employee, agent or consultant, or in any other capacity, any business
organization the business or activities of which are substantially similar to or
directly competitive with any business or activity conducted by the Company,
including without limitation the planning, development, management, operation,
leasing and acquisition of, or providing consulting services pertaining to,
independent living facilities, assisted living facilities, nursing homes and
other health care facilities or a home health care program for the elderly, or
small retirement living projects within a twenty (20) mile radius of Company
head-quarters, any Company regional officers or any assisted-living facility or
community operated by the Company or planned to operated by the Company during
the term of the Employee's employment by the Company.
(b) In addition, during the Non-Competition Period the Employee will not
(i) attempt to hire any director, officer, employee or agent of the Company,
(ii) assist in such attempt hiring by any other person, (iii) encourage any
person to terminate his or her employment or business relationship with the
Company, (iv) encourage any customer or supplier of the Company to terminate its
relationship with the Company, (v) obtain, assist in obtaining, for Employee's
own benefit (other than indirectly as an employee of the Company) any customer
of the Company, (vi) encourage any customer or supplier not to enter in or renew
a business relationship with the Company.
(c) The Employee acknowledges and agrees that foregoing territorial,
time and other limitations are reasonable and properly required for the adequate
protection of the business and affairs of the Company, and in the event that any
of territorial, time or other limitations is found to be unreasonable by a court
of competent jurisdiction, the Employee agrees and submits to the reduction of
such territorial, time or other limitations to such an area, period or otherwise
as the court may determine to be reasonable. In the event that any limitation
under this Section 11 is found to be unreasonable or otherwise invalid in whole
or in part in any jurisdiction, the
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Employee agrees that such limitation shall be and remain valid in other
jurisdictions.
(d) The Employee acknowledges, warrants and agrees that the restrictive
covenants contained in this Section 11 are necessary for the protection of the
Company's legitimate business interests and are reasonable in scope and content.
(e) Nothing in paragraphs (a) - (d) of this Section 11 shall preclude
Employee from making passive investments in more than 5% of a class of
securities of any business enterprise registered under the Securities Exchange
Act of 1934 the business or activities of which are substantially similar to or
directly competitive with the Company as proscribed under Section 11(a) above.
12. Protection of Proprietary Information. During the course of his
employment as an executive officer of the Company the Employee will have access
to and will gain knowledge with respect to all of the activities and lines of
business the Company will enter, including the planning, development, management
and operation of independent living and assisted living facilities, nursing
homes and other health care facilities and a home health care program for
elderly or infirm people and small retirement living projects, the Company's
research and development techniques with respect to such facilities, homes,
projects and programs, the preparation of market and demand and cost containment
studies, project evaluation methods, facility development programs, management
techniques related to all aspects of such facilities, homes, projects and
programs and related businesses and other valuable and confidential information
relating to the business and activities of the Company ("Confidential
Information"). The parties acknowledge that unauthorized disclosure or misuse of
the Confidential Information could cause irreparable damage to the Company. The
parties also agree that covenants by the Employee not to make unauthorized
disclosures of the Confidential Information and not to use the Confidential
Information after the termination of the Employee's employment with the Company
in a business in competition with that of the Company are essential to the
growth and stability of the business of the Company. Accordingly, the Employee
agrees that, except as required by his duties under this Agreement, he shall not
use or disclose to anyone at any time during or after the term of his employment
by the Company any Confidential Information obtained by him in the course of his
employment with the Company.
The parties acknowledge that the Employee has obtained valuable knowledge,
experience, and information relative generally to the business the Company
presently intends to pursue
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prior to his employment with the Company (the "Prior Confidential Information").
The Prior Confidential Information shall be deemed to be Confidential
Information for purposes of this Section. However, the Prior Confidential
Information shall be subject to the nondisclosure requirements of this Section
for time periods identical to those in Section 11(a) relating to the
Non-Competition Period and for the related termination reasons contained
therein, rather than the infinite time limitations provided in this Section 11
for the Confidential Information.
13. Remedies. In the event of any breach or threatened breach by the
Employee of the provisions of Sections 11 or 12 of this Agreement, the Company
shall be entitled to an injunction restraining such breach in addition to, and
not to the exclusion of, other remedies or relief. Employee acknowledges that
his employment by Company imposes on him a duty to act prudently and for the
benefit of Company in all matters connected with or related to his employment
and the officers he holds in the Company. Employee agrees that in the event that
he violates his duty of loyalty to Company, in addition to any and all other
remedies which the Company may have available to it, Company will be entitled,
at its election, to recover from Employee (i) the value of anything belonging to
the Company which Employee uses in breach of such duty, or (ii) any benefit
which Employee receives as a result of violating his duty of loyalty, or its
proceeds, and the Company shall also be entitled to recover from Employee the
amount of damages thereby caused. In the event of termination of Employee's
employment for breach in any material respect of any of the covenants under this
Employment Agreement, Employee agrees that he shall thereby forfeit all rights
granted to him under any stock option, profit participation, bonus or deferred
compensation arrangement of the Company then existing in which he participates
or has an interest or right, to the extent permitted by law. Nothing herein
shall be construed as prohibiting either party from pursuing any other remedies
available to him or it for any other breach or threatened breach of this
Agreement by the other party, including the recovery of damages from the other
party.
14. Notices. Any notice or other communication pursuant to this
Agreement shall be in writing and shall be personally delivered or sent by
certified or registered mail or by commercial overnight (receipted) courier
addressed to the respective parties as follows:
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If to the Company, to:
CareMatrix Corporation
197 First Avenue
Needham, MA 02194
Attn: Andrew D. Gosman, President
If to the Employee, to:
Kenneth M. Miles, Senior Vice President of Finance
CareMatrix Corporation
197 First Avenue
Needham, MA 02194
15. Governing Law. This Agreement shall be governed in all respects by the
laws of the Commonwealth of Massachusetts.
16. Waiver. Any waiver of a breach of any of the provisions of this
Agreement shall not be deemed to be a waiver of any other provision or breach of
this Agreement.
17. Effect of Headings. Any title of an article or section heading herein
contained is for convenience of reference only, and shall not affect the meaning
or construction of any of the provisions hereof.
18. Miscellaneous.
(a) The parties agree that each provision contained in this
Agreement shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of
any of the other clauses herein. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to scope, activity or subject so as to be unenforceable at all, such
provision or provisions shall be construed by the appropriate judicial body by
limiting and reducing it or them, so as to be enforceable to the extent
compatible with the applicable law.
(b) This Agreement contains the whole agreement as such relates to
the subject matter hereof between the parties hereto and the parties expressly
acknowledge that there are no inducements, promises, terms, conditions or
obligations made or entered into by the Company or the Employee other than
contained herein. This Agreement may not be amended except by a writing signed
by both parties.
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19. Effect of Prior Agreements/Entire Agreement. The parties agree that any
prior written or oral agreements relating to the subject matter hereof are
hereby terminated and are superseded by this agreement. This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof, and all promises, representations, understandings, warranties and
agreements with reference to the subject matter hereof and inducements to the
making of this Agreement relied upon by any party hereto have been expressed
herein.
IN WITNESS WHEREOF, the parties hereto or their duly authorized
representatives have signed, sealed and delivered this Agreement effective as of
the day and year first above written.
CAREMATRIX CORPORATION
By:
----------------------------------------
Andrew D. Gosman, President
EMPLOYEE
-----------------------------------------
Kenneth M. Miles
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FOR IMMEDIATE RELEASE
Contact:
Michael J. Doyle Andrew D. Gosman
Chairman & CEO President
The Standish Company CareMatrix Corporation
6 New England Executive Park 197 First Avenue
Burlington, MA 01803 Needham, MA 02194
617-270-4500 617-433-1000
THE STANDISH CARE COMPANY AND CAREMATRIX CORPORATION
SIGN MERGER AGREEMENT
BURLINGTON, MASSACHUSETTS, July 5, 1996. The Standish Care Company ("Standish")
(Nasdaq: STAN;STANP) announced today that it has signed a merger agreement with
CareMatrix Corporation ("CareMatrix") of Needham, Massachusetts. CareMatrix, a
privately-held assisted living company, is controlled by Abraham D. Gosman and
his two sons, Andrew and Michael. Under the agreement, Standish, as the
surviving company in the merger, will acquire all of the assets and operations
of CareMatrix and will issue 50 million shares of its common stock to
CareMatrix's stockholders. The transaction is subject to approval of the
merger agreement by both companies' Boards of Directors and shareholders and
other closing conditions.
Commenting on this transaction, Michael J. Doyle, Chairman and Chief Executive
Officer of Standish said, "Standish has been a pioneer and leader in the
assisted living industry. We believe this merger will benefit both organizations
and their shareholders. We look forward to building a world class management
and development company to further our leadership in the assisted living
industry."
Andrew D. Gosman, President of CareMatrix remarked, "We are very pleased with
this transaction and very happy to be working with the senior management of
Standish. Together, the combined company will move forward in the assisted
living industry as a respected provider of high quality assisted living services
with locations throughout the United States. Both companies have a strong
commitment to a standard of excellence for senior living and a focus on
satisfying the needs of each resident in our communities."
Currently both companies enjoy a high census in their existing portfolio. Each
has an experienced management team with extensive experience in the areas of
acquisitions, development, financing, marketing, and operations for senior
housing and health care.
Historically both companies have pursed an aggressive growth strategy.
CareMatrix brings to the merger an extensive development pipeline which will
strengthen the Company's presence in the northeastern and southeastern United
States and expand their operations into the Southwest. The combined Company has
locations in Arizona, Connecticut, Florida,
<PAGE>
Maine, Massachusetts, New Hampshire, New Jersey, North Carolina, Pennsylvania,
Texas, and Virginia.
Standish specializes in acquiring, developing, operating, and managing assisted
living communities and currently provides these services to 14 communities in
six states.
FOR IMMEDIATE RELEASE
Contact:
Michael J. Doyle Andrew D. Gosman
Chairman & CEO President
The Standish Company CareMatrix Corporation
6 New England Executive Park 197 First Avenue
Burlington, MA 01803 Needham, MA 02194
617-270-4500 617-433-1000
BOARDS OF STANDISH CARE COMPANY AND CAREMATRIX
CORPORATION APPROVE MERGER
BURLINGTON, MASSACHUSETTS, July 10, 1996. The Standish Care Company ("Standish")
(Nasdaq: STAN;STANP) announced today that their Board of Directors has voted
to approve the merger agreement with CareMatrix Corporation ("CareMatrix") of
Needham, Massachusetts and to recommend that the Shareholders of Standish also
vote to approve the merger at their meeting in October of this year.
The Board of Directors of CareMatrix also voted today to approve the merger.
CareMatrix, a privately-held assisted living company, is controlled by
Abraham D. Gosman and his two sons, Andrew and Michael. Under the agreement,
Standish, as the surviving company in the merger, will acquire all of the
assets and operations of CareMatrix and will issue 50 million shares of its
common stock to CareMatrix's stockholders.
Michael J. Doyle, Chairman and Chief Executive Officer of Standish said, "We are
pleased with the progress being made on this merger. The unanimous approval from
both Boards of Directors demonstrates their recognition of the potential
strength of the combined companies."
"By combining the strengths of both companies," continued Andrew D. Gosman,
President of CareMatrix, "Standish and CareMatrix have the potential to achieve
a level of growth that would exceed what each company could do independently.
The combination of Standish's existing portfolio with CareMatrix's development
projects makes the merged Company a premier player in the assisted living
industry."
Headquartered in Burlington, Massachusetts, Standish specializes in acquiring,
developing, operating, and managing assisted living communities and currently
provides these services to 14 communities in six states.
