Source: http://agreements.realdealdocs.com/Agreement-and-Plan-of-Merger/AGREEMENT-AND-PLAN-OF-MERGER-BY-AND-AMON-3263478/
Timestamp: 2017-01-23 18:58:26
Document Index: 352759433

Matched Legal Cases: ['§ 160', '§ 160', '§\n164', '§ 164', '§ 164', '§\n164', '§ 164']

Agreement And Plan Of Merger By And Among Usmd Holdings, Inc. Wellmed Medical Management, Inc. And Project Z Merger Sub, Inc. Dated As Of August 29, 2016 - Agreement And Plan Of Merger - Free Search.
Become a Member You are here: Agreements > Agreement and Plan of Merger > AGREEMENT AND PLAN OF MERGER BY AND AMONG USMD HOLDINGS, INC. WELLMED MEDICAL MANAGEMENT, INC. AND PROJECT Z MERGER SUB, INC. Dated as of August 29, 2016
Agreement And Plan Of Merger By And Among Usmd Holdings, Inc. Wellmed Medical Management, Inc. And Project Z Merger Sub, Inc. Dated As Of August 29, 2016
This Agreement and Plan of Merger involves USMD HOLDINGS, INC. | Project Z Merger Sub, Inc | UnitedHealth Group Incorporated | USMD Holdings, Inc | WELLMED MEDICAL MANAGEMENT, INC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. Title: AGREEMENT AND PLAN OF MERGER BY AND AMONG USMD HOLDINGS, INC. WELLMED MEDICAL MANAGEMENT, INC. AND PROJECT Z MERGER SUB, INC. Dated as of August 29, 2016 Governing Law: Delaware Date: 8/30/2016 Industry: Healthcare Facilities Law Firm: Vinson Elkins;McDermott Will Sector: Healthcare
WELLMED MEDICAL MANAGEMENT,
PROJECT Z MERGER SUB,
Dated as of August 29,
ARTICLE I THE
Effects of the Merger; Further
ARTICLE II CONVERSION OF SHARES;
Effect of the Merger on Capital
Treatment of Options and Other
No Conflict; Required Filings and
SEC Filings; Financial Statements;
Absence of Certain Changes or
Approvals from Governmental Authorities
Interested Party Transactions;
Company Vote Required
Participation in Governmental and
Other Third Party Payor Programs
Information in the Information
Statement and Proxy Statement
Opinion of Financial
ARTICLE IV REPRESENTATIONS AND
Capitalization and Operation of
No Vote of Parent Stockholders;
PENDING THE MERGER
No Control of Operations
Notification of Certain
ARTICLE VI ADDITIONAL
Company Stockholder Approval;
Preparation of the Information Statement
No Solicitation of
Regulatory Approvals and Other
Company Convertible Notes
Termination of Certain
Treatment of Ancillary
Conditions to Each Party’s
Obligation to Effect the Merger
Conditions to the Obligations of
Conditions to the Obligations of the
Frustration of Closing
ARTICLE VIII TERMINATION,
Waivers 61
Interpretation; Disclosure
Entire Agreement; No Other
Counterparts; Effect; Facsimile
Jurisdiction; Waiver of Jury Trial
APPENDICES, EXHIBITS AND
Form of Amended
and Restated Certificate of Incorporation
and Restated Bylaws
Ventures Consent
THIS AGREEMENT AND PLAN OF MERGER,
dated as of August 29, 2016 (this “ Agreement
”), is entered into by and among USMD Holdings, Inc., a
Delaware corporation (the “ Company ”),
WellMed Medical Management, Inc., a Texas corporation (“
Parent ”), and Project Z Merger Sub, Inc., a
Delaware corporation and a wholly-owned subsidiary of Parent
(“ Merger Sub ”). Capitalized terms used
in this Agreement have the meanings set forth or referenced in
A. The board of directors of the
Company, acting upon the unanimous recommendation of a special
transaction committee of the board of directors of the Company
consisting solely of independent and disinterested directors (the
“ Special Committee ”), has unanimously
(i) determined that this Agreement and the transactions
contemplated hereby, including the merger of Merger Sub with and
into the Company (the “ Merger ”), are
fair to, advisable and in the best interests of the Company and its
stockholders, (ii) approved and declared advisable this Agreement
and the transactions contemplated hereby in accordance with the
DGCL, (iii) authorized the execution and delivery, by the Company
of, and the performance by the Company of its obligations under,
this Agreement, and (iv) resolved to recommend that the
stockholders of the Company adopt this Agreement.
B. The board of directors of each of
Parent and Merger Sub has approved and declared advisable this
Agreement and the transactions contemplated hereby and the
execution, delivery and performance by Parent and Merger Sub of
their respective obligations under this Agreement and the
transactions contemplated hereby, and Parent, as the sole
stockholder of Merger Sub, has agreed to adopt this Agreement
immediately following the execution and delivery hereof.
the premises and the mutual representations, warranties, covenants
and agreements contained herein and for other good and valuable
. Upon the terms and subject to the conditions of this
Agreement, and in accordance with the General Corporation Law of
the State of Delaware (the “ DGCL ”), at
the Effective Time, Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate
existence of Merger Sub shall cease and the Company shall continue
as the surviving corporation in the Merger (sometimes hereinafter
referred to as the “ Surviving Corporation
”) and as a wholly-owned subsidiary of Parent.
. Unless this Agreement shall have been terminated and the
transactions contemplated hereby shall have been abandoned pursuant
to Section 8.01 and
subject to the satisfaction or waiver (to the
extent permitted by applicable Law) of the conditions set forth in
ARTICLE VII , the closing of the Merger (the “
Closing ”) shall take place at 10:00 a.m.,
Dallas, Texas time, on the second (2 nd )
business day after the satisfaction or waiver (to the extent
permitted by applicable Law) of the conditions set forth in
ARTICLE VII , excluding those conditions that, by their
terms, cannot be satisfied until the Closing, but subject to the
satisfaction or waiver (to the extent permitted by applicable Law)
of such conditions at the Closing, at the offices of McDermott Will
& Emery LLP, 2501 N. Harwood Street, Suite 1900, Dallas,
Texas 75201, unless another date, time or place is agreed to in
writing by the Company and Parent. The date on which the
Closing occurs is referred to in this Agreement as the “
Closing Date .”
Section 1.03. Effective Time of
the Merger . Subject to the provisions of this Agreement,
concurrently with the Closing, the parties shall cause a
certificate of merger (the “ Certificate of
Merger ”) to be executed and filed with the Secretary
of State of the State of Delaware (the “ Delaware
Secretary of State ”) in accordance with the
applicable provisions of the DGCL and shall make all other filings
and recordings required under the DGCL. The Merger shall become
effective at such time as the Certificate of Merger has been duly
filed with the Delaware Secretary of State or at such later date or
time as may be agreed by the Company and Parent in writing and
specified in the Certificate of Merger in accordance with the DGCL
(the effective time of the Merger being hereinafter referred to as
the “ Effective Time ”).
Section 1.04. Effects of the
Merger; Further Action . From and after the Effective
Time, the Merger shall have the effects set forth in this Agreement
and in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective
Time, all the properties, rights, privileges, powers and franchises
of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of
the Surviving Corporation. If at any time after the Effective
Time any further action is necessary to vest in the Surviving
Corporation the title to all property or rights of Merger Sub or
the Company, the authorized officers and directors of the Surviving
Corporation are fully authorized in the name of Merger Sub or the
Company, as the case may be, to take, and shall take, any and all
such necessary and lawful action.
Section 1.05. Certificate of
Incorporation; Bylaws . At the Effective Time,
(a) the certificate of incorporation of the Company shall be
amended and restated to read in its entirety as set forth in
Exhibit A hereto and, as so amended and restated, shall
be the certificate of incorporation of the Surviving Corporation,
until thereafter amended or repealed, subject to the limitations
set forth in Section 6.05 , in accordance with its
terms and applicable Law, and (b) the bylaws of the Company
shall be amended and restated to read in their entirety as set
forth in Exhibit B hereto and, as so amended and
restated, shall be the bylaws of the Surviving Corporation, until
thereafter amended or repealed, subject to the limitations set
forth in Section 6.05 , in accordance with the terms
thereof and the certificate of incorporation of the Surviving
Corporation and applicable Law.
Section 1.06. Directors and
Officers . The directors of Merger Sub immediately prior
to the Effective Time shall be the initial directors of the
Surviving Corporation following the Merger, and the officers of
Merger Sub immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation following the Merger,
in each case, until their
respective successors are duly elected or
appointed and qualified or until their earlier death,
incapacitation, retirement, resignation or removal in accordance
with the certificate of incorporation and bylaws of the Surviving
CONVERSION OF SHARES; EXCHANGE OF
Section 2.01. Effect of the
Merger on Capital Stock . At the Effective Time, by virtue
of the Merger and without any action on the part of the Company,
Parent, Merger Sub or any holder of any shares of capital stock of
the Company, Parent or Merger Sub:
(a) Common Stock of Merger
Sub . Each share of common stock, par value $0.01 per
share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into and become one validly
issued, fully paid and nonassessable share of common stock, par
value $0.01 per share, of the Surviving Corporation, and all such
shares shall constitute the only outstanding shares of capital
stock of the Surviving Corporation. From and after the
Effective Time, all certificates that, immediately prior to the
Effective Time, represented the common stock of Merger Sub shall,
without the necessity of presenting the same for exchange, be
deemed for all purposes to represent the number of shares of common
stock of the Surviving Corporation into which they were converted
in accordance with the immediately preceding sentence.
(b) Cancellation of Certain
Company Common Stock . Each share of common stock, par
value $0.01 per share, of the Company (the “ Company
Common Stock ”) that is held by the Company in
treasury, that is owned, directly or indirectly, by any
wholly-owned subsidiary of the Company or that is owned, directly
or indirectly, by Parent, Merger Sub or any other subsidiary of
Parent immediately prior to the Effective Time shall no longer be
outstanding and shall be automatically cancelled and shall cease to
exist, and no cash or other consideration shall be delivered or
deliverable in exchange therefor (collectively, “
Cancelled Shares ”).
(c) Conversion of Company Common
Stock . Subject to the provisions of this
Section 2.01 , each share of Company Common Stock
(other than Cancelled Shares and other than Appraisal Shares),
issued and outstanding immediately prior to the Effective Time
shall be automatically cancelled and shall cease to exist and be
converted into the right to receive $22.34 per share in cash (the
“ Merger Consideration ”), payable
without interest, to the holder of such share, upon surrender, in
the manner provided in Section 2.04 , of a certificate
that immediately prior to the Effective Time evidenced such share
(a “ Certificate ”) (or, if such share is
held in book-entry or other uncertificated form, upon the entry
through a book-entry transfer agent of the surrender of such share
on a book-entry statement; it being understood that any references
herein to “ Certificates ” shall be
deemed to include references to book-entry account statements
relating to the ownership of shares of Company Common
Section 2.02. Treatment of
Options and Other Equity-Based Awards .
(a) At the Effective Time,
(i) each option to acquire shares of Company Common Stock held
by any person (a “ Company Option ”),
whether or not granted under the Company’s 2010 Equity
Compensation Plan (the “ Equity Compensation
Plan ”), including without
limitation, any Assumed Option (as defined in
the Equity Compensation Plan), and whether or not vested and
exercisable, that is outstanding and unexercised immediately prior
to the Effective Time, shall be automatically cancelled without any
action on the part of the holder thereof, and (ii) each
Company Option that is outstanding and unexercised immediately
prior to the Effective Time and by its terms has vested prior to
the Effective Time or will vest immediately prior to or upon the
occurrence of the Effective Time, shall be converted into the right
to receive from Parent or the Surviving Corporation as promptly as
practicable after the Effective Time (and in all events, not later
than the later of (x) five (5) business days thereafter
and (y) the end of the first payroll period ending after the
Effective Time) an amount in cash equal to the product obtained by
multiplying (A) the excess, if any, of the Merger
Consideration over the per share exercise price of such Company
Option, by (B) the aggregate number of shares of Company
Common Stock that were issuable upon exercise or settlement of such
Company Option immediately prior to the Effective Time (such
product, the “ Option Cash Payment ”)
, payable without interest, to the holder of such Company
Option; provided , that if the per share exercise price of
any such Company Option equals or exceeds the Merger Consideration,
the holder thereof shall not be entitled to an Option Cash Payment
in respect of such Company Option. From and after the
Effective Time, all Company Options shall no longer be outstanding
and shall automatically terminate and cease to exist, and each
holder of a Company Option shall cease to have any rights with
respect thereto, except solely in respect of vested Company Options
the right to receive the Option Cash Payment, if any. Company
Options that remain unvested at the Effective Time shall be
cancelled in their entirety and no amounts shall be paid to the
(b) Each share of Company Common
Stock awarded that is subject to a restriction that has not lapsed
or other vesting conditions that remain unsatisfied as of
immediately prior to the Effective Time (each such share shall be
referred to as a share of “ Company Restricted
Stock ”) and that is granted under the Equity
Compensation Plan, including shares of Company Restricted Stock
granted under the Equity Compensation Plan as required under the
terms of the USMD Salary Deferral Plan, whether or not subject to
any restriction or vested, that is outstanding immediately prior to
the Effective Time shall become fully vested immediately prior to
the Effective Time without any action on the part of the holder
thereof, and the restrictions thereon shall lapse immediately prior
to the Effective Time. All such shares of Company Restricted
Stock shall be treated as outstanding shares of Company Common
Stock for purposes of Section 2.01(c) . Any Merger
Consideration payable with respect to such shares of Company
Restricted Stock shall be paid out of the Payment Fund in
accordance with Section 2.04 (less any required Tax
(c) Immediately after the Effective
Time, Parent shall provide or cause to be provided to the Surviving
Corporation cash in an amount sufficient to pay the aggregate
Option Cash Payments.
(d) All payments provided to holders
of Company Options pursuant to this Section 2.02 shall
be made through Parent’s and the Surviving
Corporation’s payroll systems, subject to withholding in
accordance with the provisions of Section 2.04(g)
(e) As soon as reasonably
practicable following the date of this Agreement and in any event
prior to the Effective Time, the Company Board shall take all
requisite action, including adopting such resolutions and such
other actions that are necessary to effectuate the treatment of
Company Options and shares of Company Restricted Stock pursuant to
this Section 2.02 .
Section 2.03. Appraisal
Rights . Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than Cancelled
Shares) that are held by any holder who is entitled to demand and
properly demands appraisal of such shares pursuant to, and who
complies in all respects with, the provisions of Section 262
of the DGCL (“ Section 262 ”) shall
not be converted into the right to receive the Merger Consideration
as provided in Section 2.01(c) , but instead such
holder shall be entitled to payment of the fair value of such
shares (the “ Appraisal Shares ”) as
shall be determined in accordance with the provisions of
Section 262. From and after the Effective Time, each
holder of Appraisal Shares shall cease to have any rights with
respect thereto, except the right to receive the fair value of such
Appraisal Shares in accordance with the provisions of
Section 262. Notwithstanding the foregoing, if any such
holder shall fail to properly perfect or otherwise shall
effectively waive, withdraw or otherwise lose the right to
appraisal and payment under, or a court of competent jurisdiction
shall determine that such holder is not entitled to the relief
provided by, Section 262, then the right of such holder to be
paid the fair value of such holder’s Appraisal Shares under
Section 262 shall cease and each of such Appraisal Shares
shall be deemed to have been converted as of the Effective Time
into the right to receive the Merger Consideration (as provided in
Section 2.04(g) , less any required Tax withholdings),
payable without interest, as provided in
Section 2.01(c) , upon surrender of a Certificate or
proper documentary evidence pursuant to Section 2.04 ,
and such shares shall not be deemed to be Appraisal
Shares. The Company shall give prompt written notice to Parent
of any demands received by the Company for appraisal rights in
respect of any shares of Company Common Stock, and Parent shall
have the right to participate in and reasonably direct all
negotiations and proceedings with respect to such
demands. Except with the prior consent of Parent, the Company
shall not make any payment with respect to, or settle or offer to
settle, any such demands.
Section 2.04. Exchange and
(a) Paying Agent . Prior
to the Effective Time, Parent shall (i) appoint Computershare
Trust Company, N.A., to act as agent (the “ Paying
Agent ”) for the payment of the Merger Consideration
upon surrender of the Certificates in accordance with this
ARTICLE II and (ii) enter into a paying agent agreement, in
form and substance reasonably acceptable to the Company and Parent,
with the Paying Agent for the payment of the Merger Consideration
in accordance with this ARTICLE II . At or prior to the
Effective Time, Parent shall deposit, or cause to be deposited,
with the Paying Agent, in trust for the benefit of holders of
shares of Company Common Stock, cash in an amount sufficient to pay
the aggregate Merger Consideration in exchange for all shares of
Company Common Stock issued and outstanding immediately prior to
the Effective Time (other than Cancelled Shares or Appraisal
Shares), payable upon due surrender of the Certificates pursuant to
the provisions of this ARTICLE II (such cash in the
aggregate being referred to as the “ Payment
Fund ”). Such funds shall be invested by the
Paying Agent as directed by Parent or the Surviving Corporation,
pending payment thereof by the Paying Agent to the Company’s
stockholders; provided , however , that
such investments shall be in obligations of or
guaranteed by the United States of America or any agency or
instrumentality thereof and backed by the full faith and credit of
the United States of America, in commercial paper obligations rated
A-1 or P-1 or better by Moody’s Investors Service, Inc. or
Standard & Poor’s Corporation, respectively, or in
certificates of deposit, bank repurchase agreements, or
banker’s acceptances of commercial banks with capital
exceeding $1 billion (based on the most recent financial statements
of such bank that are then publicly available). Earnings from
such investments shall be the sole and exclusive property of the
Surviving Corporation, and no part of such earnings shall accrue to
the benefit of the Company’s stockholders. In the event
any Appraisal Shares cease to be Appraisal Shares, Parent shall
deposit, or cause to be deposited, with the Paying Agent in the
Payment Fund, an amount equal to the product of (A) the Merger
Consideration multiplied by (B) the number of such formerly
Appraisal Shares. Parent shall promptly replace any portion of
the Payment Fund, as necessary, so as to ensure that it is, at all
times, maintained at a level sufficient to make prompt payment of
the Merger Consideration. The Payment Fund shall not be used
for any purpose that is not expressly provided for in this
(b) Termination of Payment
Fund . The Surviving Corporation shall be entitled at any
time after the 180th day following the first anniversary of the
Effective Time to require the Paying Agent to deliver to it any
portion of the Payment Fund that remains undistributed to the
former holders of shares of Company Common Stock, and any such
former holders who have not surrendered their Certificate (or
effective affidavits of loss in lieu thereof) in accordance with
this Section 2.04 prior to that time shall thereafter
look only to the Surviving Corporation for payment of the Merger
Consideration, without any interest thereon, upon due surrender of
their Certificates (or effective affidavits of loss in lieu
thereof), in each case, subject to any abandoned property, escheat
or similar Law. Any net profit resulting from, or interest or
income produced by, the Payment Fund shall be payable to the
(c) Exchange and Payment
Procedures . As soon as practicable after the Effective
Time, and in any event not later than the third (3
rd ) business day following the Closing Date,
Parent and the Surviving Corporation shall cause the Paying Agent
to mail (and to make available for collection by hand) to each
holder of record of a Certificate (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates held by such person shall pass,
only upon proper delivery of the Certificates (or affidavits of
loss together with any required bond or indemnity in lieu thereof)
to the Paying Agent, shall be in customary form and substance
reasonably acceptable to Parent and the Paying Agent, subject to
the Company’s approval (not to be unreasonably conditioned,
withheld or delayed), and shall be prepared prior to Closing) and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration into which
such shares of Company Common Stock previously represented by such
Certificates shall have been converted pursuant to this
Agreement. Upon surrender of a Certificate (or effective
affidavits of loss together with any required bond or indemnity in
lieu thereof) for cancellation to the Paying Agent or to such other
agent or agents as may be appointed by the Surviving Corporation,
together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto (or,
if such shares of Company Common Stock are held in book-entry or
other uncertificated form, upon the entry through a book-entry
transfer agent of the surrender of such shares on a book-entry
account statement), and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate (or
effective affidavit of loss in lieu thereof) shall be
entitled to receive from the Payment Fund in
exchange therefor an amount in cash equal to the product of
(i) the number of shares of Company Common Stock formerly
represented by such holder’s properly surrendered Certificate
(or effective affidavit of loss in lieu thereof) and (ii) the
Merger Consideration (less any applicable withholding Taxes), and
the Certificate so surrendered shall forthwith be
cancelled. In the event of a transfer of ownership of Company
Common Stock that is not registered in the share transfer books of
the Company, the proper portion of the Merger Consideration may be
paid in exchange therefor to a person other than the person in
whose name the Certificate so surrendered is registered if such
Certificate shall be properly endorsed or otherwise be in proper
form for transfer and the person requesting such payment shall pay
any transfer and other applicable Taxes required by reason of the
payment of the Merger Consideration to a person other than the
registered holder of such Certificate or establish to the
reasonable satisfaction of the Surviving Corporation that such Tax
has been paid or is not applicable. No interest shall be paid
or shall accrue on any amount payable upon due surrender of any
Certificate (or any effective affidavit of loss in lieu
(d) No Further Ownership Rights
in Company Common Stock; Share Transfer Books . Until duly
surrendered as contemplated by Section 2.04(c) , each
Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender an amount
in cash equal to the product of (i) the number of shares of
Company Common Stock formerly represented by such holder’s
properly surrendered Certificate (or effective affidavit of loss in
lieu thereof) and (ii) the Merger Consideration (less any
applicable withholding Taxes), without any interest thereon, and
the holders of Certificates shall not have any rights as
stockholders of the Company. All cash paid upon the due
surrender of a Certificate (or any effective affidavit of loss in
lieu thereof) in accordance with the terms of this
ARTICLE II shall be deemed to have been paid at the
Effective Time in full satisfaction of all rights pertaining to the
shares of Company Common Stock formerly represented by such
Certificate. At the Effective Time, the share transfer books
of the Company shall be closed, and there shall be no further
registration of transfers on the share transfer books of the
Surviving Corporation of the shares of Company Common Stock that
were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to Parent, the
Surviving Corporation or the Paying Agent for transfer or any other
reason, the holder of Certificates shall be given a copy of the
letter of transmittal referred to in Section 2.04(c)
and instructed to comply with the instructions in that letter of
transmittal in order to receive the cash to which such holder is
entitled pursuant to this ARTICLE II .
. Anything herein to the contrary notwithstanding, none of
Parent, Merger Sub, the Surviving Corporation, the Paying Agent or
any other person shall be liable to any person in respect of any
portion of the Payment Fund properly delivered to a public official
pursuant to any applicable abandoned property, escheat or similar
(f) Lost, Stolen, Defaced or
Destroyed Certificates . If any Certificate shall have
been lost, stolen, defaced or destroyed, upon the making of an
affidavit of that fact reasonably acceptable to the Surviving
Corporation by the person claiming such Certificate to be lost,
stolen, defaced or destroyed and, if required by the Surviving
Corporation or the Paying Agent, the posting by such person of a
bond in such reasonable and customary amount as Parent, the
Surviving Corporation or the Paying Agent may reasonably direct as
indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent shall pay
respect of such lost, stolen, defaced or
destroyed Certificate an amount in cash equal to the product of
Merger Consideration (less any applicable withholding Taxes),
without any interest thereon.
(g) Withholding Rights
. Each of Parent, the Surviving Corporation and the Paying
Agent shall be entitled to deduct and withhold from any amounts
otherwise payable to any person pursuant to this Agreement such
amounts as are required to be deducted and withheld with respect to
the making of such payment under the Internal Revenue Code of 1986
(the “ Code ”) or any provision of
any other applicable state, local or foreign Tax Law. To the
extent that amounts are so deducted and withheld, such amounts
shall (i) shall be remitted by the applicable entity to the
appropriate Governmental Authority and (ii) be treated for all
purposes under this Agreement as having been paid to the person in
respect of which such deduction and withholding was
Section 2.05. Adjustments
. Without limiting the other provisions of this Agreement, if,
at any time during the period between the date of this Agreement
and the Effective Time, any change in the outstanding shares of
capital stock of the Company, or securities convertible into or
exchangeable into or exercisable for shares of such capital stock,
shall occur, including by reason of any reclassification,
recapitalization, stock split (including reverse stock split) or
subdivision or combination, exchange or readjustment of shares, or
any stock dividend or stock distribution with a record date during
such period, merger or similar transaction, the Merger
Consideration and any other amounts payable pursuant to this
Agreement shall be appropriately adjusted to reflect such change
and such adjustment shall provide the Company’s stockholders
with the same economic effect as contemplated by this Agreement
prior to such change; provided , however , that
nothing in this Section 2.05 shall be deemed to permit
or authorize the Company to effect any such change that it is not
otherwise authorized or permitted to undertake pursuant to this
Agreement, including pursuant to Section 5.01
Except (i) as disclosed in the
Company 10-K and the Company 10-Q (excluding any documents
incorporated by reference therein, exhibits attached thereto or any
disclosures included in such sections that are opinions,
assumptions or beliefs of the Company or general cautionary,
predicative or forward-looking in nature); provided , that
the disclosures in the Company 10-K or Company 10-Q shall not
modify the representations and warranties of the Company in
Section 3.05 , Section 3.08 ,
Section 3.12 , Section 3.14 ,
Section 3.23 and Section 3.24 ) or (ii) as
disclosed in the disclosure schedule delivered by the Company to
Parent immediately prior to the execution of this Agreement (the
“ Disclosure Schedule ”), the Company
represents and warrants to Parent and Merger Sub as set forth in
this ARTICLE III .
Section 3.01. Organization and
Qualification . Each of the Company and its subsidiaries
is duly organized, validly existing and in good standing (or, as
applicable, the equivalent thereof) under the Laws of the
jurisdiction of its organization and has the requisite power and
authority necessary to own, lease and operate its properties and
assets and to carry on its business as it is now being
conducted. Each of the Company and its subsidiaries is
qualified or licensed to do business, and is in
good standing (or, as applicable, the equivalent thereof), in each
jurisdiction where the character of its properties and assets
owned, leased or operated by it or the nature of its activities
makes such qualification or licensing necessary, except where the
failure to be so duly qualified or licensed or in good standing
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. The Company has made
available to Parent (i) a complete and correct copy of the
certificate of incorporation and the bylaws of the Company (the
“ Company Organizational Documents ”) and
the certificates of incorporation and the bylaws (or similar
organizational documents) of each subsidiary of the Company (the
“ Subsidiary Organizational Documents ”
and together with the Company Organizational Documents, the “
Organizational Documents ”), in each case as
amended, modified or restated and currently in effect and
(ii) a list of the directors, members and officers of the
Company and each of its subsidiaries. Neither the Company nor
any of its subsidiaries are in material violation of any provision
of the applicable Organizational Documents.
Section 3.02. Capitalization;
Subsidiaries .
the Company consists of 49,000,000 shares of Company Common Stock,
par value $0.01 per share, and 1,000,000 shares of preferred stock,
par value $0.01 per share (the “ Company Preferred
Stock ”). As of the close of business on August
12, 2016, (i) 11,393,942 shares of Company Common Stock were
issued and outstanding (of which 31,801 shares are shares of
Company Restricted Stock), (ii) no shares of Company Preferred
Stock were issued and outstanding or reserved for issuance,
(iii) no shares of Company Common Stock were held in the
treasury of the Company, (iv) 870,722 shares of Company Common
Stock were subject to or reserved for issuance or transfer upon
exercise of outstanding Company Options or lapse of restrictions on
shares of Company Restricted Stock and (v) 1,502,985 shares of
Company Common Stock were reserved for issuance upon conversion of
the Company Convertible Notes. All outstanding shares of
Company Common Stock have been duly authorized and validly issued
and are fully paid, nonassessable and free of preemptive (or
similar) rights.
(b) As of the close of business on
August 12, 2016, the Company had outstanding Company Options
to purchase 769,939 shares of Company Common Stock and 31,801
shares of Company Common Stock subject to certain restrictions as
shares of Company Restricted Stock granted under the Equity
Compensation Plan. The Equity Compensation Plan (including all
amendments requiring approval) has been duly approved by the
Company’s stockholders to the extent such approval is
required under applicable Law or under the Company Organizational
Documents. All shares of Company Common Stock subject to
issuance or transfer in connection with the exercise, vesting or
settlement of outstanding Company Options or shares of Company
Restricted Stock granted under the Equity Compensation Plan, upon
issuance or transfer on the terms and conditions specified in the
Equity Compensation Plan or other relevant agreement pursuant to
which such Company Option or share of Company Restricted Stock was
granted, shall be duly authorized, validly issued, fully paid,
nonassessable and free of preemptive (or similar)
rights. Except (i) as set forth above and on
Section 3.02(d) of the Disclosure Schedule,
(ii) as a result of the exercise, vesting or settlement of the
outstanding Company Options or shares of Company Restricted Stock
granted under the Equity Compensation Plan, in each case granted
prior to the date hereof, or (iii) for the Company Convertible
Notes, there are no
outstanding or authorized (1) shares of
capital stock or other voting securities of the Company,
(2) securities of the Company convertible into or exchangeable
or exercisable for shares of capital stock or voting securities of
the Company, (3) preemptive or other outstanding rights, stock
appreciation rights, redemption rights, repurchase rights,
agreements, arrangements, calls, commitments, options, warrants or
other rights to acquire from the Company, or obligations of the
Company to issue, any capital stock or voting securities or
capital stock or voting securities of the Company, (4) equity
equivalents, interests in the ownership or earnings of the Company
or other similar rights (the foregoing sections (1) – (4)
collectively, “ Company Securities ”),
and (5) shares of capital stock, voting securities, equity
interests or securities convertible into or exchangeable or
exercisable for shares of capital stock, voting securities or
equity interests of any of the subsidiaries of the Company or any
equity equivalents, interests in the ownership or earnings of any
subsidiary of the Company or other similar rights (collectively,
“ Subsidiary Securities ”). Except
for the Company Convertible Notes, there are no outstanding
obligations of the Company or any of its subsidiaries to
repurchase, redeem or otherwise acquire any Company Securities or
any Subsidiary Securities or to provide funds to or make any
investment (in the form of a loan, capital contribution or
otherwise) in any subsidiary or any other person.
(c) None of the Company or any of
its subsidiaries is a party to any stockholders’ agreement,
voting trust agreement or registration rights agreement relating to
Company Securities or Subsidiary Securities or any other Contract
relating to disposition, voting or dividends with respect to any
Company Securities or Subsidiary Securities or granting to any
person or group of persons the right to elect, or to designate or
nominate for election, a director to the Company Board or the board
of directors (or equivalent governing body) of any of its
(d) Section 3.02(d) of
the Disclosure Schedule contains a complete and correct list of
each subsidiary of the Company and all other entities in which the
Company owns, directly or indirectly, any shares of capital stock
or other equity interests. Such list sets forth the
jurisdiction of organization, the amount of all shares of capital
stock or other equity interests therein owned by the Company,
directly or indirectly, and, with respect to each subsidiary of the
Company, describes all of its outstanding Subsidiary Securities and
lists the holders thereof. Each of the outstanding shares of
capital stock or other equity interests of each such subsidiary is
duly authorized, validly issued, fully paid and non-assessable and
was issued free of preemptive (or similar rights), and all such
shares or other interests in any such subsidiary or person that are
owned by the Company or a subsidiary of the Company are owned free
and clear of all security interests, liens, claims, pledges,
limitations or restrictions in voting, dividend or transfer rights,
charges or other encumbrances of any nature whatsoever (“
Liens ”), except for Permitted Liens and such
transfer restrictions of general applicability as may be provided
under the Securities Act and other applicable securities
Laws. The Company does not directly or indirectly control or
own any capital stock of, or other voting securities or equity or
similar interests in, or investment in or have any obligation to
invest in, any other entity, except as set forth on
Section 3.02(d) of the Disclosure Schedule.
(e) Except as (i) set forth in
Section 3.02(e) of the Disclosure Schedule and (ii) as
may be incurred after the date hereof in accordance with
Section 5.01 , there is not any indebtedness for
borrowed money, or guarantees of indebtedness for borrowed money of
any person, by the Company or any of its subsidiaries.
(f) As of the date hereof, other
than distributions by the Company’s subsidiaries in the
ordinary course of business, there are no dividends or similar
distributions that have accrued or been declared but are unpaid on
the Company Common Stock, Company Preferred Stock, Company
Restricted Stock or other equity interests of the Company or any of
its subsidiaries, and neither the Company nor any of its
subsidiaries is subject to any obligation (contingent or otherwise)
to pay any dividend or otherwise to make any distribution or
payment to any current or former holder of any of the Company
Securities, Subsidiary Securities, Company Restricted Stock, shares
of capital stock or other equity interests of the Company or any of
its subsidiaries, as applicable, in respect of any such
holder’s ownership of such equity securities.
(a) The Company has all necessary
corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery
and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate
action on the part of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize
such execution and delivery of this Agreement or consummation of
the transactions contemplated hereby, except for the Common
Stockholder Approval. This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due
authorization, execution and delivery hereof by Parent and Merger
Sub, constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms, except as may be affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
Laws relating to or affecting creditors’ rights generally,
general equitable principles (whether considered in a proceeding in
equity or at law).
(b) At a meeting duly called and
held, prior to the execution of this Agreement, at which all
directors of the Company were present and voting in favor, the
Company Board, acting upon the unanimous recommendation of the
Special Committee, duly adopted resolutions, which, except as
permitted by Section 6.03 after the date hereof, have
not been subsequently terminated, rescinded, withdrawn, modified or
amended in any way, (i) determining that this Agreement and
the transactions contemplated hereby, including the Merger, are
stockholders, (ii) approving and declaring advisable this
Agreement and the transactions contemplated hereby in accordance
with the DGCL, (iii) authorizing the execution and delivery by
the Company of, and the performance by the Company of its
obligations under, this Agreement, and (iv) recommending that
the stockholders of the Company adopt this Agreement (the actions
in clause (iv) , the “ Company Board
Recommendation ”).
Section 3.04. No Conflict;
Required Filings and Consents .
Section 3.04(a) of the Disclosure Schedule, the
execution, delivery and performance of this Agreement by the
Company and the consummation of the
transactions contemplated hereby do not and will
not: (i) conflict with or violate the Organizational
Documents; (ii) materially conflict with or materially violate
any laws, statutes, codes, rules, regulations, ordinances, common
laws or Orders of any Governmental Authority (collectively, “
Laws ”) applicable to the Company or any of its
subsidiaries or by which its or any of their respective properties
are bound (assuming that all consents, approvals and authorizations
contemplated by clauses (i) through (vii) of
subsection (b) below have been obtained and all filings
described in such clauses have been made); or (iii) result in
any material breach or material violation of, constitute a material
default, require consent or result in the loss of a material
benefit under, give rise to any increased payment or any penalty or
premium under, give rise to any right of termination, amendment,
acceleration or cancellation of (in each case, with or without
notice or lapse of time or both) any material Contract to which the
Company or any of its subsidiaries is a party, or by which the
Company or any of its subsidiaries or its or any of their
respective properties are bound, or result in the creation of a
Lien, other than a Permitted Lien, on any of the properties or
assets of the Company or any of its subsidiaries.
(b) The execution, delivery and
performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby by the Company do not and
will not require any permit, license, franchise, authorization,
certification, exemption, tariff, consent, approval, concession or
franchise (collectively, “ Approvals ”)
from, action by, filing with or notification to, any Governmental
Authority, except for (i) compliance with the applicable
requirements of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder (the “ Exchange
Act ”), or state securities, takeover and “blue
sky laws,” (ii) filings and recordings as may be
required under the DGCL in connection with the Merger, including
the filing and recordation of the Certificate of Merger,
(iii) compliance with applicable requirements of the
Marketplace Rules of Nasdaq, (iv) filings, permits,
authorizations, consents and approvals as may be required under the
HSR Act, (v) any required filings with the U.S. Securities and
Exchange Commission (the “ SEC ”) and
Nasdaq, including the (A) Information Statement and, as
applicable, the Proxy Statement, and (B) any such reports
under Section 13(a) of the Exchange Act as may be required in
connection with this Agreement and the Merger, (vi) filings
and Healthcare Permits required by any healthcare regulatory
Governmental Authority set forth on Section 3.04(b)(vi)
of the Disclosure Schedule and (vii) such other Approvals,
actions, filings or notifications of a type not referenced above
the failure of which to be made or obtained would not reasonably be
expected to have, individually or in the aggregate, a Material
Section 3.05. SEC Filings;
Financial Statements; Internal Controls .
(a) The Company has filed or
furnished all forms, certifications, reports, schedules,
declarations, statements, applications and other documents required
to be filed with or furnished to the SEC by it prior to the date
hereof and since July 1, 2013 (collectively, in each case
as may have been amended since their filing, the “
Company Reports ”), each of which, as of their
respective effective dates or filing dates, as applicable, and as
amended prior to the date of this Agreement, complied in all
material respects with the applicable requirements of the
Securities Act of 1933 and the rules and regulations promulgated
thereunder (the “ Securities Act ”), the
Exchange Act, and the Sarbanes-Oxley Act of 2002 (the “
Sarbanes-Oxley Act ”), each as in effect on the
date such Company Report was so filed or effective. Except to
the extent that any information in any Company Report has been
revised or superseded by a Company Report filed prior to the date
hereof, none of the Company Reports (including any financial
schedules included therein), when filed or
furnished, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. None of the Company’s
subsidiaries is required to file any forms, reports or documents
with the SEC under the Exchange Act. As of the date of this
Agreement, there are no unresolved comments received by the Company
from the Staff of the SEC with respect to any of the Company
(b) Each of the audited and
unaudited financial statements (including any related notes)
included in or incorporated by reference in the Company Reports, as
amended or supplemented prior to the date hereof (collectively,
together with all notes and schedule thereto, the “
Financial Statements ”), (i) complied as
to form in all material respects with the applicable rules and
regulations of the SEC with respect thereto when filed,
(ii) was prepared in accordance with United States generally
accepted accounting principles (“ GAAP ”)
(except, in the case of unaudited quarterly statements, as
permitted for purposes of Quarterly Reports on Form 10-Q) applied
on a consistent basis throughout the periods involved (except as
may be indicated in the notes thereto and subject, in the case of
unaudited consolidated interim financial statements, to normal
year-end audit adjustments and the absence of notes not required by
GAAP) and (iii) fairly presents in all material respects the
consolidated financial position of the Company and its subsidiaries
as of the date thereof and the consolidated results of operations
and cash flows of the Company and its subsidiaries for the period
then ended (subject, in the case of unaudited interim Financial
Statements, to normal year-end audit adjustments which,
individually or in the aggregate, were not, and would not be
reasonably expected to be, material).
(c) The Company has established and
maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15 and Rule 15d-15 under the Exchange
Act) sufficient for the Company and its subsidiaries to comply in
all material respects with all applicable legal and accounting
requirements required by Rule 13a-15 and Rule 15d-15 under the
Exchange Act; such disclosure controls and procedures are
reasonably designed to ensure that material information relating to
the Company, including its consolidated subsidiaries, required to
be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms,
and that all such material information is accumulated and
communicated to the Company’s principal executive officer and
its principal financial officer to allow timely decisions regarding
required disclosure and to make the certifications required
pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act
regarding the Company’s and each of its subsidiaries’
disclosure controls and procedures. With respect to each
Annual Report on Form 10-K, each Quarterly Report on Form 10-Q and
each amendment of any such report included in the Company Reports
filed after the effective date of the Sarbanes-Oxley Act, the
principal executive officer and the principal financial officer of
the Company (or each former principal executive officer and each
former principal financial officer of the Company) have made all
certifications required by the Sarbanes-Oxley Act and any related
rules and regulations promulgated by the SEC. The Company has
disclosed, based on its most recent evaluation of its disclosure
controls and procedures prior to the date hereof, to the
Company’s auditors and the audit committee of the Company
Board (i) any significant deficiencies and material weaknesses
in the design or operation of internal controls over financial
reporting which, at the time of such disclosure, were then
reasonably likely to adversely affect in any material respect the
ability to record, process, summarize and report
financial information and (ii) any fraud, whether or not
material, that, at the time of such disclosure, involved management
or other employees who then had a significant role in the
Company’s internal controls over financial reporting. As
used herein, the terms “significant deficiencies” and
“material weaknesses” have the meaning assigned to them
in Public Company Accounting Oversight Board Auditing Standard 2,
as in effect on the date of this Agreement.
(d) Except (i) as set forth on
Section 3.05(d) of the Disclosure Schedule,
(ii) as reflected or reserved against in the Financial
Statements, (iii) for liabilities and obligations incurred
since May 31, 2016 (the “ Balance Sheet Date
”) in the ordinary course of business and consistent with
past practice, none of which is a material liability for breach of
contract, breach of warranty, tort or a violation of Law by the
Company or any subsidiary of the Company, (iv) for liabilities
or obligations that have been discharged or paid in full,
(v) for liabilities and obligations (other than those incurred
in the ordinary course of business, which are addressed by the
foregoing clause (iii ) and not this
clause (v) ), less than $1,500,000 in the aggregate,
(vi) for liabilities incurred pursuant to this Agreement or in
connection with the transactions contemplated hereby and
(vii) for liabilities and obligations incurred under any
executory Contract other than liabilities or obligations due to
breaches by the Company or any subsidiary of the Company
thereunder, neither the Company nor any subsidiary of the Company
has incurred any liabilities or obligations of any nature that,
whether or not accrued, contingent or otherwise and whether or not
such liabilities or obligations would be required by GAAP to be
recognized or disclosed on a consolidated balance sheet of the
Company and its subsidiaries or in the notes thereto.
Section 3.06. Absence of Certain
Changes or Events . Since the Balance Sheet Date through
(a) the Company and its subsidiaries
have conducted their respective businesses in all material respects
in the ordinary course of business consistent with past practice,
except in connection with this Agreement and the transactions
contemplated hereby,
(b) there has not been a Material
Adverse Effect, and
(c) there has not been any event,
condition, action or effect that would constitute a breach of
Section 5.01(d) , Section 5.01(e) ,
Section 5.01(f) , Section 5.01(h) ,
Section 5.01(i) , Section 5.01(j) ,
Section 5.01(k) , or Section 5.01(o) if
such sections had been in effect from the Balance Sheet Date to the
Section 3.07. Absence of
Litigation . As of the date hereof, there are no material
legal or administrative suits, claims, demands, actions,
complaints, proceedings, litigation, arbitrations, mediations,
charges, inquiries or investigations (“ Actions
”) pending or, to the Knowledge of the Company, threatened
against the Company or any of its subsidiaries or any assets,
properties or rights of the Company or any of its subsidiaries or,
to the Knowledge of the Company, any of the executive officers or
directors of the Company in their capacity as such, in each case by
or before any Governmental Authority. As of the date hereof,
there is no material order, writ, judgment, injunction, ruling,
decree, determination, or award by any Governmental Authority
(“ Order ”) with respect to the Company
or any of its subsidiaries, nor any of their respective
Section 3.08. Tax Matters
(a) All material Tax Returns
required to be filed by or with respect to the Company and its
subsidiaries have been timely filed taking into account extensions
validly obtained, and all such Tax Returns are complete and correct
in all material respects. The Company and its subsidiaries
have timely paid all material Taxes that are due, whether or not
shown on any Tax Return, or that have been asserted in writing by
any Governmental Authority to be due, from or with respect to it,
except for matters contested in good faith or for which adequate
reserves have been established in accordance with GAAP.
(b) There are no outstanding
Contracts or waivers extending the statutory period of limitation
applicable to any claim for, or the period for the collection or
assessment of, Taxes due from or with respect to the Company or any
subsidiary of the Company for any taxable period.
(c) No deficiencies for Taxes with
respect to Company or any of its subsidiaries have been claimed,
proposed or assessed by a Tax authority or other Governmental
Authority in writing. No audit or other Action by any
Governmental Authority has formally commenced and no written
notification has been given to the Company or any subsidiary of the
Company that such an audit or other Action is pending or threatened
with respect to any material Taxes due from the Company or any
subsidiary of the Company or any Tax Return filed by the Company or
any subsidiary of the Company. Neither the Company nor any of
its subsidiaries has been informed in writing by any jurisdiction
that the jurisdiction believes that such entity was required to
file any Tax Return in such jurisdiction that was not
(d) Neither the Company nor any of
its subsidiaries is a party to, bound by or has any obligation
under, any Tax sharing, Tax indemnity or similar Contract (other
than an agreement or arrangement solely among members of an
affiliated group of which the Company is the common
(e) Neither the Company nor any of
its subsidiaries (i) is currently or has ever been a member of
an affiliated group (other than a group the common parent of which
is the Company or any of its subsidiaries) filing a consolidated
federal income Tax Return or (ii) has any liability for the
Taxes of any person (other than the affiliated group of which the
Company is the common parent) under Treasury Regulations
Section 1.1502-6 (or any similar provision of state, local or
foreign Laws), or as a transferee or successor, by Contract or
(f) Neither the Company nor any of
its subsidiaries has been a “distributing corporation”
or a “controlled corporation” (within the meaning of
Section 355(a)(1)(A) of the Code) in connection with a
distribution of stock qualifying for tax-free treatment under
Section 355 of the Code at any time during the two (2)
year period ending on the date of this Agreement.
(g) Neither the Company nor any of
its subsidiaries has participated in any “listed
transaction” within the meaning of Section 6707A(c)(2)
of the Code and Treasury Regulations
Section 1.6011-4(b)(2).
(h) The unpaid Taxes of the Company
and its subsidiaries (i) did not, as of the Balance Sheet
Date, materially exceed the reserve for Tax liability (rather than
any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of
the Financial Statements (rather than any notes thereto) and
(ii) do not materially exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with the
past custom and practice of the Company and its subsidiaries in
filing their Tax Returns.
(i) The net operating losses or
other tax attributes of the Company and each of its subsidiaries,
prior to giving effect to the transactions contemplated by this
Agreement, are not currently subject to any limitation under
Section 382, 383 or 384 of the Code.
representations and warranties in this Agreement, the
representations and warranties in this Section 3.08 are
the only representations and warranties in this Agreement with
respect to Taxes.
Section 3.09. Employee Benefit
Plans; ERISA .
(a) Section 3.09(a) of
each “employee benefit plan” (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of
1974 (“ ERISA ”)) (including
“multiemployer plans” (within the meaning of ERISA
Section 3(37))), stock purchase, stock option, stock
ownership, other equity or equity-based compensation, severance,
employment, retirement, pension, profit sharing, change-of-control,
fringe benefit, vacation, disability, death benefit,
hospitalization, medical, collective bargaining, bonus, incentive,
deferred compensation and all other employee benefit plans,
programs, policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect or
required in the future as a result of the transaction contemplated
by this Agreement or otherwise), sponsored, maintained, contributed
to or required to be maintained or contributed to by the Company or
any of its subsidiaries or with respect to which the Company or any
of its subsidiaries would reasonably be expected have any present
or future material liability. All plans, programs, policies
and arrangements required to be set forth in
Section 3.09(a) of the Disclosure Schedule are
collectively referred to as the “ Company Plans
.” Any current or former employee, consultant, independent
contractor of the Company or any of its subsidiaries is referred to
as a “ Company Employee .”
(b) All Company Plans that are
intended to qualify under Section 401(a) of the Code and any
trust agreement that is intended to be tax exempt under
Section 501(a) of the Code have been determined by the
Internal Revenue Service to be qualified under Section 401(a)
of the Code and exempt from taxation under Section 501(a) of
the Code (or there remains a period of time under the applicable
remedial amendment period with respect to such a Company Plan to
request such a determination), and, to the Knowledge of the
Company, nothing has occurred and no circumstances exist since the
date of such letter which would reasonably be expected to adversely
affect the qualified status of such plan.
(c) Neither the Company nor any
subsidiary or ERISA Affiliate of the Company has, since
July 1, 2013, contributed or has been obligated to contribute
to, nor do any of them have any liability, contingent or otherwise,
with respect to, any “employee pension plans”, as
defined in Section 3(2) of ERISA, subject Title IV of ERISA or
Section 412 of the Code, including a
“multiemployer plan”, as defined in
Section 4001(a)(3) of ERISA. Since July 1, 2013, neither the
Company nor any ERISA Affiliate has maintained, established,
sponsored, participated in, or contributed to a “funded
welfare plan” within the meaning of Section 419 of the Code,
a “voluntary employee beneficiary association” as
defined in Section 501(c)(9) of the Code, a
“multiple-employer welfare arrangement” as defined in
Section 3(40) of ERISA or “employee stock ownership
plan” as defined in Section 4975(e)(7) of the Code. With
respect to each Company Plan set forth on Section 3.09(a) of
the Disclosure Schedule, (i) the Company, its subsidiaries and
their respective ERISA Affiliates have complied in all material
respects with the minimum funding requirements of Sections 412 of
the Code and 302 of ERISA, and there have been no applications for
variance from minimum funding standards (as described in Section
412(c) of the Code or Section 302(c) of ERISA), (ii) there have
been no material violations of the applicable benefits restrictions
under Section 436 of the Code, (iii) no Lien on the assets of the
Company, its subsidiaries or their respective ERISA Affiliates has
arisen under ERISA or the Code, nor is such Lien expected to arise,
(iv) no event described in Section 4043 (excluding events with
respect to which reporting was waived) or 4062(e) of ERISA nor any
transaction described in Section 4069 of ERISA has occurred or is
reasonably expected to occur, and (v) all premiums described in
Section 4006 of ERISA payable to the Pension Benefit Guaranty
Corporation under Section 4007 of ERISA have been timely paid. Note
of the Company, any of its subsidiaries or any of their respective
ERISA Affiliates is party to any agreement intended to comply with
Section 4204 of ERISA.
(d) With respect to each Company
Plan, the Company has delivered or made available to Merger Sub a
complete and correct (or, to the extent no such copy exists, an
accurate description) copy of the plan document relating to such
plan and, to the extent applicable, (i) any related trust
agreement, annuity contract or other funding instrument; (ii) the
most recent determination letter or opinion letter issued by the
Internal Revenue Service with respect to such plan; (iii) the most
recent summary plan description prepared with respect to such
Company Plan and other written communications by the Company that
modify in any significant respect the benefits provided under the
terms of any Company Plan in a manner not reflected in any of the
documents provided pursuant to this Section 3.09(d) ;
(iv) the three (3) most recent (A) annual reports on Form 5500
filed with the Internal Revenue Service and attached schedules, (B)
audited financial statements and (C) actuarial valuation reports;
(v) the results of the non-discrimination testing for each of the
three (3) most recently completed years; (vi) all material
correspondence with a Governmental Authority since July 1, 2013;
and (vii) the results of the Company’s Section 280G
(e) All Company Plans are in
material compliance with and have been administered in all material
respects in form and operation in accordance with their terms and
all requirements of applicable Laws, including the Code and ERISA,
and none of the Company nor any of its subsidiaries has received
any written claim or notice that any such Company Plan is not in
compliance with its terms and all applicable Laws, regulations,
rulings and other authority issued thereunder. There are no
Actions pending (other than routine claims for benefits) or, to the
Knowledge of Company, threatened alleging any breach of the terms
of any Company Plan or of any fiduciary duties thereunder or
violation of any applicable Law with respect to any such
(f) All contributions, premiums and
other payments required by Law or any Company Plan to have been
made under any such plan to any fund, trust or account established
thereunder or in connection therewith have been made by the due
(g) Neither the execution and
delivery of this Agreement nor the consummation or performance of
any of the transactions contemplated by this Agreement, whether
alone or in combination with any other event, shall result in
(i) the payment to any Company Employee of any money or other
property, or forgiveness of indebtedness of any Company Employee,
(ii) the provision of any benefits or other rights of any
individual or (iii) the increase, acceleration of vesting or
provision of any payments, benefits or other rights provided to or
for the benefit of any Company Employee (including the acceleration
of any funding obligations), whether or not any such payment,
right, benefit, increase, acceleration or provision could
constitute a “parachute payment” within the meaning of
(h) None of the payments
contemplated by the Company Plans or any other agreements to which
the Company or any of its subsidiaries is a party, would,
individually or in the aggregate, whether alone or in combination
with any other event, constitute excess parachute payments (as
defined in Section 280G of the Code (without regard to
subsection (b)(4) thereof)) or would exceed the amount
deductible pursuant to Section 162(m) of the Code. No
individual has been promised any “gross-up” payment for
excise taxes imposed by Section 280G and 4999 of the
(i) There has been no amendment to,
written interpretation of or announcement by the Company or any of
its subsidiaries relating to, or any change in employee
participation or coverage under, any Company Plan that would
materially increase the expense of maintaining such Company Plan
above the level of the expense incurred in respect thereof for the
most recent fiscal year ended prior to the date of this
(j) No Company Plan provides health,
medical or other welfare benefits after retirement or other
termination of employment (other than for continuation coverage
required under Section 4980(B)(f) of the Code or applicable
Law for which the covered individual pays the full cost of
coverage). To the Knowledge of the Company, there has been no
communication (whether oral or written) to any Company Employee
that would reasonably be expected to promise or guarantee any such
health, medical, or other welfare benefits after retirement or
other termination of employment.
(k) Each Company Plan that is
subject to Section 409A of the Code has been administered in
compliance in all material respects with its terms and the
operational and documentary requirements of Section 409A of
the Code and all applicable Internal Revenue Service guidance
(including notices, rulings and proposed and final regulations)
(l) Each Company Plan that is also a
“group health plan” for purposes of the Patient
Protection and Affordable Care Act of 2010 (Pub. L. No. 111-148)
and the Health Care and Education Reconciliation Act of 2010 (Pub.
L. No. 111-152) (collectively, with the regulations and guidance
issued thereunder, the “
Affordable Care Act ”) is in material
compliance with the applicable terms of the Affordable Care
Act. Neither the Company nor any ERISA Affiliate has ever
maintained, established, sponsored, participated in, or contributed
to any Company Plan
outside of the United States. The Company offers
minimum essential health coverage, satisfying affordability and
minimum value requirements, to its full-time employees sufficient
to prevent liability for assessable payments under
Sections 4980H(a) and 4980H(b) of the Code.
Section 3.10. Labor Matters
(a) Section 3.10(a) of
the Disclosure Schedule contains a complete and accurate list of
the name, employee identification number, job title, base salary or
wage rate, target incentive compensation (as applicable),
commission rate (as applicable), bonus or commissions payments in
the last two (2) years, other compensation, accrued or granted
but unused paid leave balance, date of commencement of employment,
work location, full time or part time status, exempt or non-exempt
status, temporary or permanent status, status as a regular or
leased employee, status as an active or inactive employee, and date
of commencement of leave (as applicable) of each employee, officer,
and director of the Company and any of its subsidiaries as of the
date of this Agreement (or as of a day within the period of the
five (5) days prior to the date of this Agreement).
(b) None of the Company Employees
are, or have been since July 1, 2013, represented by any union
with respect to their employment by the Company or such subsidiary.
To the Knowledge of the Company, no labor organization or group of
employees of the Company or any of its subsidiaries has made a
demand for recognition or certification to the Company or any of
its subsidiaries and there are no representation or certification
proceedings or petitions seeking a representation proceeding
presently pending or threatened to be brought or filed with the
National Labor Relations Board or any other Governmental Authority,
nor have any such demands, proceedings or petitions
occurred since July 1, 2013. Since July 1,
2013, neither the Company nor any of its subsidiaries has
experienced any union organization attempts, threatened strikes,
work stoppages, slowdowns, lockouts, concerted refusals to work
overtime, or other labor disputes.
Section 3.10(c) of the Disclosure Schedule, since
July 1, 2013, the Company and each of its subsidiaries is, and
during such period, has been, in compliance in all material
respects with all applicable Employment Laws.
(d) Since July 1, 2013, neither
the Company nor any of its subsidiaries has conducted a “mass
layoff,” “relocation,” “plant
closing,” or “termination” as defined by the
federal Worker Adjustment and Retraining Notification Act, or any
similar applicable state or local Law that requires advance notice
of group personnel or employment actions.
(e) Except as set forth on
Section 3.10(e) of the Disclosure Schedule, there is
(i) no unfair labor practice charge or complaint against the
Company or any of its subsidiaries pending before the National
Labor Relations Board or any similar state or local agency relating
to an alleged material violation or material breach of any
Employment Laws or (ii) no material Action pending or, to the
Knowledge of the Company, threatened against the Company or any of
its subsidiaries concerning employment-related matters, the Company
Employees or a material violation of any Employment Laws or a
material breach of any contractual obligations, including any
material Actions pending with, or threatened in writing by, the
Equal Employment Opportunity Commission, the Department of Labor,
the Internal Revenue Service, the National Labor Relations Board,
or any other Governmental Authority.
(f) To the Knowledge of the Company,
no Company Employee is in violation in any material respect of any
employment contract, confidentiality, non-competition,
non-solicitation, or other proprietary rights agreement or any
other contract relating to the right of such person to be employed
by, or provide services to, the Company or any of its
Section 3.11. Environmental
(a) The Company and each of its
subsidiaries is, and since July 1, 2013, has been, in
compliance in all material respects with all applicable
(b) The Company and its subsidiaries
have duly obtained, maintain, and are in compliance, in all
material respects with, all material Approvals required under
applicable Environmental Laws, and all such Approvals are valid and
in good standing, and there is no action pending or, to the
Knowledge of the Company, threatened to revoke, cancel, modify,
suspend or terminate any such Approval.
(c) Neither the Company nor any of
its subsidiaries has received any notice of any Order relating to
or arising under Environmental Laws that is outstanding or
unresolved and there is no pending or, to the Knowledge of the
Company, threatened Action relating to any actual or alleged
material violation of or material liability under Environmental
Laws or with respect to the Release, disposal, transportation,
spill, cleanup, investigation or other discard of Hazardous
(d) Neither the Company nor its
subsidiaries has Released or arranged for the disposal or treatment
of any Hazardous Materials in a manner that would reasonably be
expected to give rise to material liabilities pursuant to any
applicable Environmental Law.
(e) To the Knowledge of the Company,
there is not on, in, under or from any Company Real Property:
(i) any leaking underground storage tanks; (ii) any
asbestos-containing materials or lead-based paint that must be
removed or abated under applicable Environmental Laws;
(iii) any landfills, dumps or surface impoundments used to
treat or dispose of Hazardous Materials; or (iv) any other
Hazardous Material that would reasonably be expected to give rise
to material liabilities pursuant to any applicable Environmental
(f) The Company and each of its
subsidiaries has made available to Parent copies of all material
environmental assessments, environmental reports, environmental
audits and other material environmental documents in its possession
or under its reasonable control related to any non-compliance by
the Company or its subsidiaries, in any material respect, since
July 1, 2013 or that is currently outstanding or
unresolved with Environmental Laws or the environmental condition
of any real property that the Company or its subsidiaries currently
or formerly have owned, operated or leased.
Section 3.12. Compliance with
Applicable Laws; Approvals from Governmental Authorities
. Except as set forth in Section 3.12 of the
Disclosure Schedule, (a) the Company and each of its
subsidiaries and their relevant personnel and operations are, and
since July 1, 2013,
have been, in compliance in all material
respects with all Laws applicable to them or by which any of their
respective properties are bound, (b) neither the Company nor
any of its subsidiaries has received written notice of any material
violation of any Law applicable to the Company or any of its
subsidiaries or by which any of their respective properties are
bound, (c) the Company and its subsidiaries have, and are in
compliance in all material respects with, all Approvals from any
Governmental Authority necessary to conduct their businesses as now
being conducted and to own, lease or operate their properties and
assets, and there has occurred no material violation of, material
default (with or without notice or lapse of time or both) under, or
event giving to any person any right of termination, amendment or
cancellation (with or without notice or lapse of time or both) of
any such Approval and (d) neither the Company nor any of its
subsidiaries has received written notice of any suspension,
limitation, cancellation, revocation, modification of or refusal to
renew any Approval from any Governmental Authority material to the
Company and its subsidiaries taken as a whole. No
representation or warranty is made in this Section 3.12
with respect to (i) compliance with the Securities Act and the
Exchange Act, which is covered solely in Section 3.05 ,
(ii) compliance with applicable Tax Laws, which is covered
solely in Section 3.08 , (iii) compliance with
ERISA and other applicable Laws relating to employee benefits,
which is covered solely in Section 3.09 ,
(iv) compliance with applicable Employment Law matters, which
is covered solely in Section 3.10 , (v) compliance
with applicable Environmental Laws, which is covered solely in
Section 3.11 , (vi) compliance with applicable
Healthcare Laws, which is covered solely in
Section 3.22 and Section 3.23 or
(vii) compliance with applicable Information Privacy and
Security Laws, which is covered solely in Section 3.24
Section 3.13. Contracts
(a) Section 3.13 of the
Disclosure Schedule contains a correct and complete list of each of
the following types of Contracts (including all modifications or
amendments thereto) to which the Company or any of its subsidiaries
is a party, or by which the Company or any of its subsidiaries or
its or any of their respective properties are bound as of the date
(i) any Contract that is or would be
required to be filed by the Company as a “material
contract” pursuant to Item 601(b)(10) of Regulation S-K
under the Securities Act;
(ii) any Contract with any third
party involving expenditures, liabilities or revenues in excess of
$150,000 per year;
(iii) any material Contract between
the Company or any of its subsidiaries, on the one hand, and any
officer of the Company or any of its subsidiaries, on the other
(iv) any Contract containing
covenants restricting the Company or any of its subsidiaries (or,
after the Closing, Parent or its subsidiaries) (A) from
engaging in any line of business or competing with any person or
operating at any location or hiring or soliciting for employment
any person, or (B) requiring the disposition of any assets or
line of business of the Company or any of its subsidiaries other
than in the ordinary course of business (or, after the Closing,
Parent or its subsidiaries);
(v) any Contract that contains any
“most favored nation” provisions granted by the Company
or any of its subsidiaries or pursuant to which the Company or any
of its subsidiaries is (or, after the Closing, Parent or its
subsidiaries would be) restricted from entering any territory,
market or field or freely engaging in business anywhere in the
United States of America and that is material to the Company or its
(vi) any Contract that provides for
continuing indemnification extending after the Closing by the
Company or any of its subsidiaries of any person, except for any
such Contract that is entered into in the ordinary course of
business consistent with past practice;
(vii) any Contract with any third
party that relates to the formation, creation, operation,
management or control of any joint venture, limited liability
company, partnership, profit sharing, joint development or other
(viii) any Contract for the
acquisition or disposition (by merger or otherwise), of any of the
material assets or properties of the Company or any of its
subsidiaries or any capital stock or other equity interests of any
other person for aggregate consideration in excess of $250,000,
with rights or obligations that remain outstanding, other than
Contracts for the procurement or sale of assets or properties in
the ordinary course of business consistent with past
(ix) any Contract
(A) evidencing Indebtedness by the Company or any of its
subsidiaries having an outstanding or committed amount in excess of
$100,000, other than (1) Indebtedness solely between or among
any of the Company and any of its subsidiaries and (2) trade
payables incurred in the ordinary course of business, or
(B) relating to the mortgaging, pledging or otherwise placing
of a Lien on any material asset or material group of assets of the
Company or any of its subsidiaries, except for Permitted
(x) any Contract under which the
Company or any of its subsidiaries has advanced or loaned any
amount to, or guaranteed any obligations of, any third party
(excluding, for avoidance of doubt, trade accounts receivable
incurred in the ordinary course of business);
(xi) any Contract for the license or
sublicense (whether as a licensor or a licensee) of any
Intellectual Property or other intangible asset (excluding
commercial off-the-shelf or shrink wrap software than has not been
modified or customized), that provides for payment or receipt of
$100,000 or more in each year of such Contract;
(xii) any collective bargaining
agreement with any labor organization;
(xiii) any Contract under which any
benefits to any Company Employee or officer or director of the
Company or any of its subsidiaries will be materially increased, or
the vesting of material benefits to any Company Employee or officer
or director of the Company or any of its subsidiaries will be
accelerated, in connection with the Merger;
(xiv) any executory Contract with
any Material Payor;
(xv) any executory Contract with any
Governmental Authority, including with respect to a Federal Health
Care Program, that is material to the Company and its subsidiaries,
(xvi) any lease or rental Contract
involving real property or personal property and payments in excess
of $100,000 per year; and
(xvii) any Contract that would
prohibit or materially delay the consummation of the Merger or any
of the transactions contemplated hereunder;
provided , that (1) any Transaction Documents and
(2) any Company Plans or agreements documenting any awards
granted pursuant to such Company Plans shall not be required to be
listed in Section 3.13 of the Disclosure Schedule and
shall not be deemed a “Material Contract” for any
purposes hereunder (whether or not filed pursuant to
Item 601(b)(10) of Regulation S-K under the Securities
Act). The term “ Material Contract ”
shall include: (x) each Contract of the type described in
clauses (i) through (xvii) , (y) each BAA,
and (z) each Contract pursuant to which the Company licenses
to or from a third party any Personal Information or any data
derived from Personal Information for a commercial
(b) Each Material Contract is
(1) valid and binding on the Company and each of its
subsidiaries party thereto and, to the Company’s Knowledge,
each other party thereto, and (2) in full force and effect and
enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar Laws of
general applicability relating to or affecting creditors’
rights and to general equity principles. The Company and each
of its subsidiaries has performed in all material respects all
obligations required to be performed by it under each Material
Contract and has not materially violated or defaulted under, and no
event has occurred that with the lapse of time or the giving of
notice or both would constitute a material violation or default
under, each Material Contract. To the Company’s Knowledge,
each other party to each Material Contract has performed in all
material respects all obligations required to be performed by it
under such Material Contract and has not materially violated or
defaulted under, and no event has occurred that with the lapse of
time or the giving of notice or both would constitute a material
violation or default under, each Material Contract. None of
the Company or any of its subsidiaries knows of, or has received
written notice of, any material violation or default under (or any
condition which with the passage of time or the giving of notice
would cause such a violation of or default under) any Material
Contract. The Company has made available to Parent for review,
prior to the execution of this Agreement, true and complete copies
of all of the Material Contracts, which are not filed as exhibits
to the Company Reports, and the Material Contracts filed as
exhibits to the Company Reports are true and complete copies of
Section 3.14. Interested Party
Transactions; Company Advances . Since April 29, 2016
to the date hereof, except for the transactions contemplated by
this Agreement, no event has occurred that would be required to be
reported by the Company pursuant to Item 404 of
Regulation S-K. Section 3.14 of the
Disclosure Schedule sets forth, as of the date of this Agreement, a
true and correct list of all loans made by the Company to any
Company Employees, including the current outstanding balance
Section 3.15. Brokers . No
broker, finder or investment banker, other than the Financial
Advisor, the fees and expenses of which shall be paid by the
Company, is entitled to any brokerage, finder’s, financial
advisor’s or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or
on behalf of the Company or any of its subsidiaries. True and
correct copies of all agreements between the Company and the
Financial Advisor concerning this Agreement and the transactions
contemplated hereby, including any fee arrangements, have been
previously made available to Parent.
Section 3.16. Company Vote
Required . The only vote or consent of holders of any class of
capital stock of the Company necessary to adopt this Agreement is
the affirmative vote of holders of a majority of the outstanding
shares of Company Common Stock entitled to vote thereon, voting as
a single class (such vote or consent, “ Common
Stockholder Approval ”). UANT Ventures, L.P. (“
Ventures ”) is the holder of a majority of the
outstanding shares of Company Common Stock.
Section 3.17. Intellectual
(a) The Company or its subsidiaries
exclusively owns free and clear of all Liens (except for Permitted
Liens) and exclusively licenses or has the defensible right to use,
pursuant to a valid and enforceable written agreement, all material
Intellectual Property used in or held for use in the businesses of
the Company or any of its subsidiaries as currently conducted
(“ Company Intellectual Property ”). The
Company Intellectual Property constitutes all material Intellectual
Property used in the conduct of the business of the Company and its
subsidiaries as currently conducted, and the Company and each of
its subsidiaries has valid, sufficient and enforceable rights to
such Company Intellectual Property.
(b) As of the date hereof, no
written claim of invalidity or conflicting ownership rights has
been made or, to the Knowledge of the Company, threatened by a
third party with respect to any Company Intellectual Property and
no Company Intellectual Property is the subject of any pending or,
to the Knowledge of the Company, threatened Action challenging or
other orders, judgments or agreements restricting the
Company’s ownership rights in or use of such Company
Intellectual Property. Except as set forth in
Section 3.17(b) of the Disclosure Schedule, there are
no royalties or fees payable by the Company or any of its
subsidiaries by reason of the ownership, development, use, license,
sublicense, sale, distribution or other disposition of the Company
Intellectual Property, in each case, in the ordinary course of
business. As of the date hereof, no registration for or
application to register any Company Intellectual Property (“
Registered Intellectual Property ”) has been
cancelled, abandoned or adjudicated invalid, and all Registered
Intellectual Property is subsisting and in good standing, except
where such cancellation or abandonment was made in the ordinary
course of business and would not have or reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect. Section 3.17(b) of the Disclosure
Schedule sets forth a complete and accurate list of (i) all
Registered Intellectual Property, if any, indicating for each such
item the registration or application number and the applicable
filing jurisdiction, and (ii) all material unregistered
trademarks, service marks, and copyrights (including Software)
owned by the Company or any of its subsidiaries.
(c) To the Knowledge of the Company,
the conduct of the business of the Company and its subsidiaries
(including their respective products and services), as currently
conducted, does not infringe or misappropriate the Intellectual
Property rights of any person. As of the date hereof, no
person has given written notice to the Company or any of its
subsidiaries or, to the Knowledge of the Company, has threatened
that the conduct of such business (including such products and
services) is infringing or has infringed any person’s
Intellectual Property rights, or that the Company or any of its
subsidiaries has misappropriated or violated such person’s
trade secrets. To the Knowledge of the Company, no valid basis
exists for any such claim or notice. To the Knowledge of the
Company, none of the Company Intellectual Property has been or is
currently being infringed, misappropriated or otherwise violated by
any third party, and no such claims have been made by the Company
(d) The Company and each of its
subsidiaries have taken commercially reasonable measures to
safeguard the confidentiality of all Company Intellectual Property
comprising trade secrets or other confidential information, and to
the Knowledge of the Company no unauthorized use or disclosure of
any such trade secrets or material confidential information has
the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated
hereby will not breach, violate or conflict with any instrument or
agreement concerning the Company’s or any of its
subsidiaries’ use of or rights to any Company Intellectual
Property, will not cause the forfeiture or termination of or other
modification to, or give rise to a right of forfeiture or
termination of or other modification to, any rights in or to the
Company Intellectual Property, or impair any right of Parent or the
Surviving Corporation to (i) any Company Intellectual Property
and (ii) make, use, sell, license or dispose of, or to bring
any action for the infringement of, any Company Intellectual
Property, all in the same form and manner as the Company or any of
its subsidiaries has prior to the date hereof.
(f) Section 3.17(f) of
the Disclosure Schedule lists all third party Intellectual Property
licensed by the Company (“ Licensed Intellectual
Property ”) requiring payments in excess of $100,000
per year, other than commercially available “off the
shelf” Software that has not been modified or
(g) Except for those physicians who
executed certain physician employment agreements with the Company,
no current or former officers or directors of the Company and its
subsidiaries, or any current or former employees or consultants of
the Company and its subsidiaries who are or were at any time
involved in the design, development or implementation of material
Company Intellectual Property for or on behalf of the Company or
any of its subsidiaries, or who may be or were exposed to any trade
secret or confidential know-how of the Company or any of its
subsidiaries, have executed and delivered to the Company or one of
its subsidiaries, as applicable, an agreement assigning to the
Company or subsidiary their entire right, title and interest in and
to such Intellectual Property and protecting the secrecy,
confidentiality and value of such trade secrets and confidential
information. Section 3.17(g) of the Disclosure Schedule
identifies by name, and employer, all individuals who have
participated in the design, development or implementation of
(h) The Company and its subsidiaries
have sufficient rights to use all material computer software,
middleware and systems, information technology equipment, and
associated documentation used in connection with the operation of
the business of the Company and its subsidiaries (the “
IT Assets ”), all of which rights shall survive
unchanged the consummation of the transactions contemplated
(i) Section 3.17(i) of
the Disclosure Schedule lists all Software that is distributed as
“open source software” or under a similar licensing or
distribution model (collectively, “ Open Source
Software ”) that has been incorporated into and/or
distributed with any products or services of the Company or any of
its subsidiaries in any way.
(j) Section 3.17(j) of
the Disclosure Schedule lists all source code of any Software owned
or controlled by the Company or any subsidiary that has been
licensed or otherwise provided to any third party, and describes
the purpose of any such license or provision, the scope of any such
license or use by any such third party of the provided source code,
and the restrictions on use and/or disclosure of such source code
by any such third party. Except for authorized employees of the
Company or its subsidiaries who access or use source code owned or
controlled by the Company or any subsidiary in the course of their
authorized activities or employment, no person has any right to
access or use any source code owned or controlled by the Company or
Section 3.18. Insurance . All
material insurance policies to which any of the Company and its
subsidiaries is either an insured or a beneficiary and all
insurance policies for any managed entities of the Company or any
of its subsidiaries that the Company or any of its subsidiaries is
required to maintain (the “ Insurance Policies
”) are with reputable insurance carriers (other than existing
self-insurance) and maintain in such amounts and cover such risks
as the Company reasonably believes are in accordance with normal
industry practice for companies engaged in businesses similar to
that of the Company and its subsidiaries. Except as would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (a) all premiums due and payable in
respect of each Insurance Policy have been paid, (b) neither the
Company nor any of its subsidiaries is in breach or default of any
of the Insurance Policies and neither the Company nor any of its
subsidiaries has taken any action or failed to take any actions
which, with notice or the lapse of time, would constitute such a
breach or default or permit termination or modification of any of
the Insurance Policies, (c) none of the Company and its
subsidiaries has received written notice from any insurer or agent
of any intent to cancel, terminate or deny coverage under any such
Insurance Policy, and (d) the Insurance Policies are valid and
enforceable policies. Section 3.18 of the Disclosure
Schedule lists each of the Insurance Policies and sets forth for
each such Insurance Policy the (i) policy type, (ii) insurance
carrier name, (iii) insured entity(ies), (iv) effective
date, (v) limits of liability,
(vi) deductible/self-insured retention, (vii) policy number,
and (viii) premium.
Section 3.19. Property
(a) Personal Property . Each
of the Company and its subsidiaries has good and valid title to,
or, in the case of leased tangible personal properties and assets,
valid leasehold interests in, all of the material tangible personal
properties and assets used in the conduct of the business of the
Company and its subsidiaries as currently conducted. All of
the Company’s and each of its subsidiaries’ material
tangible personal properties and assets are free and clear of any
Lien, except for Permitted Liens.
(b) Real Property . Neither
the Company nor any of its subsidiaries owns any real property.
Section 3.19(b) of the Disclosure Schedule identifies
all land, buildings and structures leased or otherwise occupied by
the Company or its subsidiaries as lessee, sublessee or licensee
(the “ Leased Real Property ”) including
the street address, the title and date of the lease, sublease or
other occupancy agreement to which the Company or its subsidiaries
is a party, the name of the entity holding such leasehold,
subleasehold or other occupancy interest, and the name of the other
parties thereto (such Leased Real Property, including all
improvements thereon, referred to collectively as the “
Company Real Property ”). The Company Real
Property set forth in Section 3.19(b) of the Disclosure
Schedule comprises all of the material real property currently used
in the operation of the business of the Company and its
subsidiaries as of the date hereof.
(c) The Company has made available
to Parent and Merger Sub true and complete copies of (i) the
Company’s headquarters lease for premises leased in the
building located at 6333 North State Highway 161, Suite 200,
Irving, Texas, (ii) real property leases for sites at which
the Company’s hospitals, cancer treatment centers and primary
care and specialty clinics are located and (iii) all other
real property leases for any real property used and occupied by the
Company or its subsidiaries (collectively, the “
Company Leases ”). The Company and its
subsidiaries have a valid leasehold interest in each Leased Real
Property, and each Company Lease is in full force and effect
(except to the extent it has expired or been terminated in
accordance with its terms) and is a legal, valid and binding
obligation of the Company or its subsidiaries and is enforceable
against the Company or its subsidiaries in accordance with its
terms except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency or other similar Laws of general
applicability, now or hereafter in effect, affecting
creditors’ rights generally, and (ii) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be
brought. The Company and its subsidiaries have not exercised
or given notice of exercise, nor, to the Knowledge of Company, has
any lessor or landlord exercised or given any notice of exercise,
of any option, right or first offer or right of first refusal
contained in any Company Lease. Neither the Company nor any of
its subsidiaries nor, to the Knowledge of the Company, any other
party to any Company Lease, is in material breach of or in material
default under any of the Company Leases and, to the Knowledge of
the Company, no event has occurred or circumstance exists which,
with the delivery of notice, the passage of time, or both, would
constitute a material breach or material default under any Company
Lease on the part of the Company or its subsidiaries, nor to the
Knowledge of the Company, any other party to any Company
Lease. The Company’s or its subsidiaries’
leasehold interest in each Leased Real Property is free and clear
of all Liens, except for Permitted Liens. The Company does not
owe any material brokerage commissions or material finder’s
fees with respect to any Company Leases.
(d) Section 3.19(d) of
the Disclosure Schedule sets forth, as of the date hereof, a true
and complete list of all leases, subleases or similar agreements
relating to any Company Real Property under which the Company or
any of its subsidiaries is the landlord or the sublandlord other
than leases, subleases and similar agreements that do not provide
for annual rent in excess
of $100,000 (such leases, subleases and similar
agreements, collectively, the “ Real Property
Subleases ”). Each Real Property Sublease is valid
and binding on the Company or its subsidiaries party thereto and
each Real Property Sublease is in full force and effect (except to
the extent it has expired or been terminated in accordance with its
terms) and is a legal, valid and binding obligation of the Company
or its subsidiaries and is enforceable against the Company or its
subsidiaries in accordance with its terms except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or
other similar Laws of general applicability, now or hereafter in
effect, affecting creditors’ rights generally, and
(ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(e) As of the date hereof, there are
no condemnation or compulsory purchase proceedings pending or, to
the Knowledge of the Company, threatened with respect to any
portion of the Company Real Property that would reasonably be
likely to materially impair or materially interfere with the
continued use and operation of Company Real Property in the
business of the Company and its subsidiaries as currently
conducted; and the Company has received no written notice
indicating that any of the Company Real Property or the condition
or operation of the Company’s or its subsidiaries’
business, or any of the buildings, structures, fixtures and other
improvements thereon contravenes or violates in any material
respect any building, zoning, fire safety, health safety or other
(f) All certificates of occupancy,
permits, licenses, franchises, approvals and authorizations
(collectively, the “ Real Property Permits
”) of all Governmental Authorities, boards of fire
underwriters, associations or any other person having jurisdiction
over the Company Real Property that are required to use or occupy
the Company Real Property or operate the Company’s business
as currently conducted thereon, have been issued and are in full
force and effect, except where the failure of the Company to obtain
or maintain such Real Property Permits would not reasonably be
Section 3.20. Certain
Payments . Neither the Company nor any of its subsidiaries
(nor, to the Knowledge of the Company, any of their respective
directors, executives, representatives, agents or employees, in
each case, acting for or on behalf of the Company or its
subsidiaries, as applicable) (a) has used or is using any
corporate funds for any illegal contributions, gifts, entertainment
or other unlawful expenses relating to political activity,
(b) has used or is using any corporate funds for any direct or
indirect unlawful payments to any foreign or domestic governmental
officials or employees, (c) has violated or is violating any
provision of the Foreign Corrupt Practices Act of 1977,
(d) has established or maintained, or is maintaining, any
unlawful fund of corporate monies or other properties or
(e) has made any bribe, unlawful rebate, payoff, influence
payment, kickback or other unlawful payment of any
Section 3.21. Healthcare
Permits . All Healthcare Permits applicable to the Company,
each of its subsidiaries, and, to the Knowledge of the Company each
of the Company Employees that are required for the operation of the
Company and its subsidiaries: (a) have been obtained, are in effect
and are set forth in Section 3.21 of the Disclosure
Schedule, (b) are valid and in good standing in each jurisdiction
in which such Healthcare Permits were issued or are operable, and
(c) have not been subject to revocation or forfeiture.
Section 3.22. Participation in
Governmental and Other Third Party Payor Programs .
(a) Section 3.22 of the
Disclosure Schedule lists all provider numbers for the Company and
each subsidiary of the Company that participates in any Federal
Health Care Program. Since July 1, 2013, there have been no
audits, or investigations, and, to the Knowledge of the Company, no
event has occurred or facts exist which reasonably might be
expected to result in the revocation, suspension, termination,
probation, restriction, limitation, nonrenewal or other materially
adverse modification of the participation of the Company, any
subsidiary, or, to the Knowledge of the Company, any Company
Employee, in any Federal Health Care Program.
(b) Since July 1, 2013, neither the
Company nor any of its subsidiaries and none of their respective
directors, officers, employees and, to the Knowledge of the
Company, independent contractors, has been (i) debarred,
excluded or suspended from participating in any Federal Health Care
Program, (ii) subject to a civil monetary penalty assessed
under Section 1128A of the Social Security Act or
(iii) listed on the General Services Administration published
list of parties excluded from federal procurement programs and
non-procurement programs. There is no action pending, or, to
the Knowledge of the Company, threatened, which has resulted in or
would reasonably be expected to result in any revocation,
suspension, termination, probation, material restriction, material
limitation, non-renewal or other materially adverse modification
(excluding routine audits or adjustments in the ordinary course of
business) of the participation by the Company or any subsidiary in
any Third Party Payor Program or of any supplier or provider
number, or result in the Company’s or any of its
subsidiaries’ exclusion from any Third Party Payor
(c) The Company and each of its
subsidiaries that participates in any Federal Health Care Program
is duly enrolled and certified therein, and has the requisite
provider and supplier numbers to bill the Medicare program, the
respective Medicaid program in the state or states in which such
entity operates, and all other Third Party Payor Programs that the
Company or each of such subsidiaries currently bills to such
programs. The Company and each of its subsidiaries is
operating and, since July 1, 2013, has operated in material
compliance with all Third Party Payor Program rules and regulations
and all provisions of each Third Party Payor Program contract to
which it is a party or by which it is bound.
its subsidiaries is party to an individual or corporate integrity
agreement with the Office of the Inspector General of the United
States Department of Health and Human Services or otherwise has any
continuing reporting obligations pursuant to any deferred
prosecution, settlement or other agreement with any Governmental
(e) The Company and each of its
subsidiaries has, since July 1, 2013, (i) timely filed
all reports required to be filed with respect to each Third Party
Payor Program, all of which were prepared and filed in compliance
with applicable Laws and applicable payor requirements, except as
would not reasonably be expected to result in material liability to
the Company or its subsidiaries, taken as a whole, and
(ii) paid all material known and undisputed refunds and
overpayments due with respect to any such report. All claims
submitted by or on behalf of the Company or any of its subsidiaries
have been submitted in material compliance with
Laws and the rules, regulations, policies and
procedures of the applicable third party payors, except as has not
resulted in, and would not reasonably be expected to result in,
material liability to the Company or its subsidiaries, taken as a
whole, and there are no material pending or, to the Knowledge of
the Company, threatened, audits (including written notice of an
intent to audit), investigations, appeals, adjustments or Actions
for or relating to such claims (excluding routine audits or
adjustments in the ordinary course of business). All claims
submitted by the Company or its subsidiaries were for goods
actually sold to or services actually performed for eligible
Section 3.23. Healthcare Laws
. Except as set forth on Section 3.23 of the
Disclosure Schedule, the Company and its subsidiaries and their
respective directors, managers, officers and employees,
(a) are, and since July 1, 2013, have been, in compliance in
all material respects with all applicable Healthcare Laws; and
(b) to the Knowledge of the Company, since July 1, 2013,
have not received any notice of any alleged material violation of,
or any citation for material non-compliance with any applicable
Section 3.24. Privacy and Data
(a) Except as set forth on
Section 3.24 of the Disclosure Schedule, each of the
Company’s and each of its subsidiaries’ receipt,
collection, monitoring, maintenance, creation, transmission, use,
analysis, disclosure, storage, disposal and security of Personal
Information, since July 1, 2013, has complied in all material
respects, and complies in all material respects, with (i) any
Contracts, including BAAs, to which the Company or its subsidiaries
is a party, (ii) applicable Information Privacy and Security Laws,
(iii) if applicable, PCI DSS, and (iv) all patient, consumer or
employee consents and authorizations that apply to the
Company’s and/or its subsidiaries’ receipt, access, use
and disclosure of Personal Information. Each of the Company and
each of its subsidiaries has all necessary authority, consents and
authorizations to receive, access, use and disclose the Personal
Information in the Company’s and/or each of its
subsidiaries’ possession or under its control in connection
with the operation of the Company and/or its subsidiaries. The
Company and each of its subsidiaries has materially complied with
their privacy policies that apply to any Personal Information
received, created, used or disclosed by the Company or any of its
subsidiaries, as applicable.
(b) Except as set forth on
Section 3.24 of the Disclosure Schedule, the Company
and each of its subsidiaries is a party to a BAA with the
applicable third party in each instance where the Company or its
subsidiaries (as the case may be) (i) acts as a Business Associate
to that third party or (ii) provides protected health information
(as defined in 45 C.F.R. § 160.103) to a third party service
provider of the Company or its subsidiaries, in each case as
required by, and in material conformity with, applicable
Information Privacy and Security Laws and the applicable Contracts
to which the Company or its subsidiaries is a party.
(c) Employees of the Company and
each of its subsidiaries who have access to Personal Information
have received documented training (in accordance with commercially
reasonable standards) with respect to (i) compliance with all
applicable Information Privacy and Security Laws, to the extent
training is required by such laws and (ii) to the extent
applicable, the PCI DSS.
(d) Since July 1, 2013, the
Company and each of its subsidiaries has adopted written policies
and procedures that apply to the Company and/or each of its
subsidiaries with respect to privacy, data protection, security,
and the collection, disclosure and use of protected health
information (as defined in 45 C.F.R. § 160.103) gathered or
accessed in the course of the operations of the Company and its
subsidiaries, and those policies and procedures are reasonable and
(e) Except as set forth in
and each of its subsidiaries has commercially reasonable safeguards
in place to protect the confidentiality, integrity and security of
its Personal Information and IT Assets against any unauthorized
control, use, access, interruption, modification or corruption in
material conformance with Information Privacy and Security
(f) Except as set forth in
Section 3.24 of the Disclosure Schedule, since
July 1, 2013, there has been no data security breach of any IT
Asset, or unauthorized access, use, acquisition or disclosure of
any Personal Information, owned, used, stored, received, or
controlled by or on behalf of the Company or any its subsidiaries,
including any unauthorized access, use or disclosure of Personal
Information that would constitute a breach for which notification
to individuals and/or Governmental Authorities is required under
any applicable Information Privacy and Security Laws or Contracts
(g) Since July 1, 2013, the
Company and each of its subsidiaries has identified and
investigated each Security Incident (as defined in 45 C.F.R. §
164.304) to identify successful Security Incidents. For each
successful Security Incident, the Company and each of its
subsidiaries has identified, documented, investigated, responded
to, and mitigated (to the extent practicable) each such Security
Incident related to Personal Information or other confidential data
of the Company and each of its subsidiaries or a customer of the
Company or its subsidiaries transmitted, processed, maintained,
stored or otherwise available on or through the Company’s or
its subsidiaries’ IT Assets and taken all other actions with
respect to those Security Incidents as required by the Information
Privacy and Security Laws.
(h) Except as set forth on
Section 3.24 of the Disclosure Schedule, as of the date
hereof there are no Orders or Actions pending or, to the Knowledge
of the Company or any of its subsidiaries, threatened against the
Company or any of its subsidiaries or its “workforce”
(as defined under HIPAA) by any person or by or before any
Governmental Authority for: (i) a violation of any Information
Privacy and Security Laws; (ii) any alleged “breach”
(as defined in 45 C.F.R. § 164.402); and/or (iii) the
Company’s or any if its subsidiaries’ processing of
(i) The (execution, delivery and
performance of this Agreement and the other agreements and
instruments contemplated hereby and the consummation of the
transactions contemplated hereby and thereby complies in all
material respects with the Company’s and each of its
subsidiaries’ applicable privacy notices and policies and
with all applicable Information Privacy and Data Security
(j) Except as set forth on
and each of its subsidiaries has performed a security risk
assessment that meets (i) the standards set
forth at 45 C.F.R. § 164.308(a)(1)(ii)(A),
including an assessment as described at 45 C.F.R. §
164.306(d)(3), taking into account factors set forth in 45 C.F.R.
§ 164.306(a)–(c) and (ii) any requirements to perform
security assessments under any Information Privacy and Security Law
(collectively, the “ Security Risk Assessment
”). The Company has made available to Parent and Merger Sub
true and complete copies of (i) the most recent Security Risk
Assessment conducted by the Company and its subsidiaries and (ii)
all written mitigation plans of the Company and its subsidiaries
associated with such Security Risk Assessment. Except as set forth
on Section 3.24 of the Disclosure Schedule, the Company
and each of its subsidiaries has addressed and fully resolved or
mitigated (in accordance with HIPAA and applicable industry
standards (excluding PCI DSS)) all material, critical or high risk
threats and deficiencies identified in every Security Risk
Assessment and has developed and implemented plans to address other
identified threats and deficiencies.
Section 3.25. Information in the
Information Statement and Proxy Statement . The Information
Statement or, if applicable, the Proxy Statement (and any
amendments thereof or supplements thereto), at the date mailed or
otherwise provided to the Company’s stockholders, shall not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they are made, not misleading, except that no
representation or warranty is made by the Company with respect to
statements made therein based on information supplied by Parent or
Merger Sub for inclusion in the Information Statement or Proxy
Statement. The Information Statement or Proxy Statement shall
comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations
Section 3.26. Takeover
Statutes . Assuming the accuracy of the representations in
Section 4.09 , the Company has taken all such actions
as are necessary such that the restrictions on “business
combinations” between the Company and an “interested
stockholder” (as such terms are defined in Section 203 of the
DGCL (“ Section 203 ”)) set forth in
Section 203 do not apply to this Agreement, the Merger, or the
other transactions contemplated hereby. No Takeover Statute
applies to this Agreement, the Merger, or the other transactions
Section 3.27. Opinion of
Financial Advisor . The Special Committee has received (and the
Company Board has relied on) the written opinion of Jefferies LLC
(the “ Financial Advisor ”) to the effect
that, as of the date of the opinion and subject to the factors and
assumptions set forth in such opinion, the Merger Consideration to
be received by the holders of Company Common Stock (other than
Parent and its affiliates) pursuant to this Agreement is fair, from
a financial point of view, to such holders. A complete copy of the
written opinion will be made available to Parent solely for
informational purposes as soon as practicable after the date of
Parent and Merger Sub, jointly and
severally, represent and warrant to the Company as set forth in
this ARTICLE IV .
Section 4.01. Organization .
Each of Parent and Merger Sub is duly organized, validly existing
and in good standing (or, as applicable, the equivalent thereof)
under the Laws of the jurisdiction of its organization and has the
requisite power and authority necessary to own, lease and operate
its properties and assets and to carry on its business as it is now
being conducted, except where the failure to have such power and
authority would not reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect. Parent has made
available to the Company complete and correct copies of the
certificate of incorporation and the bylaws (or similar
organizational documents) of Merger Sub, as amended, modified or
restated and currently in effect. Said certificate of incorporation
and bylaws (or similar organizational documents) are in full force
and effect and no other organizational documents are applicable to
or binding upon Merger Sub.
Section 4.02. Authority
. Each of Parent and Merger Sub has all necessary corporate
power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement by each of Parent and Merger Sub and
the consummation by each of Parent and Merger Sub of the
transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent
and Merger Sub and shall be adopted by the sole stockholder of
Merger Sub pursuant to Section 6.09 and no other
corporate proceedings on the part of each of Parent and Merger Sub
are necessary to authorize such execution and delivery of this
Agreement or consummation of the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by
each of Parent and Merger Sub and, assuming the due authorization,
execution and delivery hereof by the Company, constitutes a legal,
valid and binding obligation of each of Parent and Merger Sub
enforceable against them each in accordance with their terms,
except as may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar Laws
relating to or affecting creditors’ rights generally, general
equitable principles (whether considered in a proceeding in equity
or at law).
Section 4.03. No Conflict;
(a) The execution, delivery and
the consummation of the transactions contemplated hereby do not and
will not: (i) conflict with or violate the certificate of
incorporation or the bylaws (or, as applicable, the equivalent
thereof) of either Parent or Merger Sub; (ii) materially conflict
with or materially violate any Laws applicable to either Parent or
Merger Sub or by which it or its properties are bound (assuming
that all consents, approvals and authorizations contemplated by
clauses (i) through (iv) of subsection (b) below
have been obtained and all filings described in such clauses have
been made); or (iii) result in any material breach or material
violation of, constitute a material default, require consent or
result in the loss of a material benefit under, give rise to a
right to permit or require the purchase or sale of assets or
securities under, give rise to any right
of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any of the
properties or assets of either Parent or Merger Sub (in each case,
with or without notice or lapse of time or both) pursuant to, any
Contract to which either Parent or Merger Sub is a party or by
which either Parent or Merger Sub or their properties are
the consummation of the transactions contemplated hereby by each of
Parent and Merger Sub do not and will not require any Approvals
requirements of the Exchange Act or state securities, takeover and
“blue sky laws,” (ii) filings and recordings as
may be required under the DGCL in connection with the Merger,
including the filing and recordation of the Certificate of Merger,
(iii) filings, permits, authorizations, consents and approvals
as may be required under the HSR Act, and (iv) such other
Approvals, actions, filings or notifications of a type not
referenced above the failure of which to be made or obtained would
not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.
Section 4.04. Brokers . The
Company will not be responsible for any brokerage, finder’s
or other fee or commission to any broker, finder or investment
banker in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of any of
Parent, Merger Sub or their affiliates.
Section 4.05. Sufficient
Funds . Parent and Merger Sub have full access to, and will
have at the Closing, sufficient funds to make all payments
contemplated by this Agreement in connection with the Merger,
including (a) the payment of all amounts payable pursuant to
ARTICLE II and (b) all fees and expenses required to be paid by
Parent or Merger Sub in connection with the Merger.
Section 4.06. Capitalization and
Operation of Merger Sub . The authorized capital stock of
Merger Sub consists of 1,000 shares of common stock, par value
$0.01 per share, all of which are validly issued and
outstanding. All of the issued and outstanding capital stock
of Merger Sub is, and at the Effective Time will be, owned by
Parent. Other than as contemplated by this Agreement, Merger
Sub has outstanding no option, warrant, right or any other
agreement pursuant to which any person other than Parent may,
directly or indirectly, acquire any equity security of Merger
Sub. Merger Sub has been formed solely for the purpose of
engaging in the transactions contemplated by this Agreement; except
for its formation, has not engaged in any other business activities
or incurred any liabilities or obligations prior to the date of
this Agreement, and prior to the Effective Time, will have
conducted its operations only as contemplated hereby and will have
incurred no liabilities or obligations other than as contemplated
Section 4.07. No Vote of Parent
Stockholders; Required Approval . No vote or consent of the
holders of any class or series of capital stock of Parent or the
holders of any other securities of Parent (equity or otherwise) is
necessary to adopt this Agreement or to approve the Merger or the
other transactions contemplated hereby. The vote or consent of
Parent as the sole stockholder of Merger Sub is the only vote or
consent of the holders of any class or series of capital stock of
Merger Sub necessary to approve the Merger and adopt this
Agreement, which consent shall be given immediately following the
Section 4.08. Absence of
Litigation . There are no material Actions pending or, to the
Knowledge of Parent, threatened against Parent or Merger Sub.
Neither Parent nor Merger Sub is subject to any material
Section 4.09. Ownership of
Shares . As of the date hereof, none of Parent, Merger Sub or
any of their respective “affiliates” or
“associates” “owns” (as such terms are
defined in Section 203) any shares of Company Common Stock. Each of
Parent and Merger Sub is not, and at no time since July 1,
2013, has been, an “interested stockholder” of the
Company as defined in Section 203.
Section 4.10. Information in the
supplied by Parent or Merger Sub in writing expressly for inclusion
or incorporation by reference in the Information Statement or, if
applicable, the Proxy Statement (or any amendments thereof or
supplements thereto) will not, at the date mailed to the
Company’s stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they are made,
not misleading, except that no representation or warranty is made
by Parent and Merger Sub with respect to statements made therein
based on information supplied by the Company for inclusion in the
Information Statement or Proxy Statement.
CONDUCT OF BUSINESS PENDING THE
Section 5.01. Conduct of Business
by the Company Pending the Merger . During the period from
and after the date of this Agreement to the earlier of the
Effective Time or the termination of this Agreement pursuant to
Section 8.01 , unless (a) otherwise required,
contemplated or permitted by this Agreement, (b) set forth on
Section 5.01 of the Disclosure Schedule, (c) required
by applicable Law or Nasdaq rule or (d) Parent gives its written
consent, which consent shall not be unreasonably withheld,
conditioned or delayed, the Company shall, and shall cause its
subsidiaries to conduct the Company’s business in all
material respects in the ordinary course consistent with past
practice, and use commercially reasonable efforts to
(i) preserve in all material respects its present
relationships with each of its customers, suppliers, and other
persons with whom the Company has material business relations,
(ii) maintain satisfactory relationships with and keep
available the services of the Company’s current officers and
other Key Employees, and (iii) preserve in all material
respects its present relationships with Governmental Authorities
and maintain in effect all material Healthcare Permits that are
required for the Company or its subsidiaries to carry on their
respective businesses as currently conducted. During the
period from the date of this Agreement to the earlier of the
Section 8.01 , the Company shall not, and shall not
permit any of its subsidiaries to, unless (A) otherwise
required, contemplated or permitted by this Agreement (including to
the extent required to comply with the Company’s obligations
in the immediately preceding sentence), (B) forth on
conditioned or delayed:
(a) amend the Company Organizational
(b) issue, deliver, grant, sell,
lease, sell and leaseback, pledge, license, transfer, mortgage,
encumber, dispose of or otherwise subject to any Lien (other than
any Permitted Lien) (i) any Company Securities or Subsidiary
Securities (except for the issuance or transfer and delivery of
shares of Company Common Stock issuable or transferable in
accordance with the terms of the Company Options or shares of
Company Restricted Stock or upon conversion of the Company
Convertible Notes, in each case outstanding as of the date of this
Agreement, which were granted under the Equity Compensation Plan,
to the extent accounted for under the Equity Compensation Plan), or
(ii) any material property or assets, whether tangible or
intangible, of the Company or any of its subsidiaries, in each
case, other than (A) in the ordinary course of business and in
a manner consistent with past practice, (B) pursuant to
Contracts in existence on the date of this Agreement or
(C) dispositions of equipment and property no longer used in
(c) declare, set aside, make or pay
any dividend or other distribution, payable in cash, stock or other
equity interests, property or otherwise, with respect to any of the
Company’s or its subsidiaries’ capital stock (except
dividends or other distributions paid by any direct or indirect
subsidiary to the Company or to any direct or indirect wholly-owned
subsidiary of the Company);
(d) reclassify, adjust, combine,
split, subdivide or redeem, purchase or otherwise acquire, any
Company Securities or Subsidiary Securities, except for purchases
of Company Securities or Subsidiary Securities pursuant to any
Company Plan and the agreements underlying awards of Company
Securities or Subsidiary Securities pursuant to such Company
(e) incur, assume, redeem,
repurchase, prepay, defease, cancel or otherwise acquire, or modify
the terms of, any Indebtedness or authorize, issue, deliver, grant
or sell any notes, bonds, debentures or other securities in respect
of Indebtedness or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the Indebtedness of any other
person, except for (i) borrowings under the Company’s current
credit facilities in the ordinary course of business consistent
with past practice, (ii) Indebtedness of up to $100,000 in the
aggregate with respect to capitalized lease obligations, and (iii)
Indebtedness solely between or among the Company and any of its
(f) make any loans, advance or
capital contributions to, or investments in, any other person
(other than a subsidiary of the Company);
(g) (i) enter into, amend or modify
in any material respect, terminate, cancel or renew any Material
Contract or Contract that, if in effect on the date hereof would
have been a Material Contract, other than in the ordinary course of
business consistent with past practice, or (ii) assign or waive any
material term or rights, claims, benefits or default under, or
release, settle or compromise any material claim against the
Company or material liabilities or obligation owing to the Company
under, any Material Contract, other than in the ordinary course
consistent with past practice;
(h) acquire (whether by merger,
consolidation or acquisition of stock or assets or otherwise) in
one transaction or any series of related transactions, except in
the ordinary course of business in a manner consistent with past
practice or in respect of capital expenditures as contemplated by
the budget set forth on Section 5.01(i) of the
Disclosure Schedule, (i) any assets or (ii) any equity
interests in any person or any business or division of any person
or all or substantially all of the assets of any person (or
business or division thereof), in the case of the foregoing
clauses (i) and (ii) , except to the extent (A)
otherwise obligated pursuant to any agreement as of the date
hereof, a copy of which has previously been made available to
Parent, or (B) solely among or between the Company and its
(i) authorize, incur or make any
capital expenditures that exceed the aggregate amount of
expenditures budgeted in the Company’s current capital
expenditure plan set forth on Section 5.01(i) of the
Disclosure Schedule;
(j) except to the extent required
under applicable Law, this Agreement or existing Company Plans as
in effect on the date of this Agreement, (i) increase in any
respect, or accelerate the payment of, the compensation, bonus,
bonus opportunity or fringe benefits of any Company Employee except
in the ordinary course of business in a manner consistent with past
practice, (ii) make or grant, or accelerate the payment of,
any retention, severance or termination pay not currently required
to be paid under existing Company Plans to, or enter into, or
amend, any employment, consulting or severance Contract with, any
present or former Company Employee; (iii) enter into, adopt,
amend or terminate any Company Plan; or (iv) enter into any
employment, consulting, change of control or severance Contract
with any newly hired employee or consultant;
(k) implement, adopt or make any
change to the accounting methods used by it materially affecting
its assets, liabilities or business, except for such changes that
are required by GAAP or Regulation S-X promulgated under the
Exchange Act or as otherwise specifically disclosed in the Company
Reports, each as concurred with by the Company’s independent
registered public accountants;
(l) (i) make, change or rescind
any Tax election or Tax accounting method, except as required by
applicable Law; (ii) fail to file material Tax Returns and other
documents required to be filed with any Governmental Authority,
subject to timely extensions permitted by applicable Law; (iii)
extend the statute of limitations with respect to any Tax; (iv)
file any amended Tax Return reflecting a material amount of income
Taxes; or (v) settle or compromise any material federal, state,
local or foreign Tax liability;
(m) waive, release, assign, settle
or compromise any pending or threatened Action that is material,
that relates to the transactions contemplated hereby or that is
brought by any current, former or purported holder of any
securities of the Company or its subsidiaries in such
(n) amend or modify the
Company’s engagement letter with the Financial Advisor in a
manner that increases the fee or commission payable by the
(o) adopt a plan or agreement of
complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries (other
than the Merger);
(p) announce, implement or effect
any material reduction in labor force, lay-off, early retirement
program, group severance program or other program or effort
concerning the termination of employment of Company Employees other
than routine employee terminations;
(q) revalue in any material respect
any of its material assets, including writing down the value of
inventory or writing down notes or accounts receivable, other than
(i) in the ordinary course of business consistent with past
practice, (ii) as required by GAAP or Regulation S-X promulgated
under the Exchange Act, (iii) or as otherwise specifically
disclosed in the Company Reports;
(r) fail to maintain in full force
and effect (i) insurance policies covering the Company and its
subsidiaries and their respective properties, assets and businesses
and (ii) insurance policies covering all managed entities for which
the Company is required to obtain and maintain insurance, in a form
and amount consistent with prudent industry practice; or
(s) take, agree, resolve or commit
to take any of the actions described in Section 5.01(a)
through Section 5.01(r) .
Notwithstanding any of the
foregoing, nothing in this Section 5.01 shall be
construed to prohibit the Company or any of its subsidiaries from
engaging in any act which the Company or its applicable subsidiary
reasonably believes is necessary for patient safety needs or to
comply with the requirements of any Governmental
Section 5.02. No Control of
Operations . Nothing contained in this Agreement is intended to
give Parent or Merger Sub, directly or indirectly, the right to
control or direct the Company’s or any of its
subsidiaries’ operations prior to the Effective Time. Prior
to the Effective Time, the Company shall exercise, consistent with
the terms and conditions of this Agreement, complete control and
supervision over its and its subsidiaries’ respective
Section 5.03. Notification of
Certain Matters .
(a) The Company shall give prompt
notice to Parent and Merger Sub of (i) the occurrence or
non-occurrence of any event whose occurrence or non-occurrence, as
the case may be, would be expected to cause any representation or
warranty of the Company contained in ARTICLE III of
this Agreement to be untrue or inaccurate in any material respect
at any time from the date hereof to the Effective Time, only to the
extent that such breach would reasonably be expected to result in
any of the conditions to the obligations of Parent and Merger Sub
to consummate the Merger set forth in Section 7.02(a)
or Section 7.02(b) to fail to be satisfied at the
Closing, and (ii) any material failure of the Company or any
officer, director, employee or agent thereof, to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder that would reasonably be expected to
result in any condition to the obligations of any party to effect
the Merger and the other transactions not to be satisfied at the
(b) Parent and Merger Sub shall give
prompt notice to the Company of (i) the occurrence or
warranty of Parent or Merger Sub contained in
ARTICLE IV of this Agreement to be untrue or inaccurate
in any material respect at any time from the date hereof to the
Effective Time, only to the extent that such breach would
reasonably be expected to result in any of the conditions to the
obligations of the Company to consummate the Merger set forth in
Section 7.03(a) or Section 7.03(b) to fail
to be satisfied at the Closing, and (ii) any material failure
of the Parent, Merger Sub or any officer, director, employee or
agent thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder that
would reasonably be expected to result in any condition to the
obligations of any party to effect the Merger and the other
transactions not to be satisfied at the Closing;
provided , however , in the case of the foregoing
clauses (a) and (b), that such notice shall not be deemed to
(i) modify or cure any breach of any representations or
warranties contained in this Agreement, (ii) supplement or
update the Disclosure Schedule, or (iii) have any effect for
the purpose of determining satisfaction of the conditions set forth
in ARTICLE VII .
Section 5.04. Takeover
Statutes . If any Takeover Statute is or may be come applicable
to the transactions contemplated hereby after the date of this
Agreement, Parent and the Company shall each use its respective
commercially reasonable efforts to grant such approvals and take
such actions as are reasonably necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable
on the terms contemplated by this Agreement and otherwise act to
eliminate or minimize, to the extent possible, the effects of such
Takeover Statute on the transactions contemplated
Section 6.01. Company Stockholder
Approval; Preparation of the Information Statement; Proxy
(a) Subject to and in accordance
with the Company Organizational Documents and applicable Laws,
including Section 228 and Section 251(c) of the DGCL,
immediately following the execution and delivery of this Agreement
by the parties hereto, the Company shall seek to obtain as promptly
as practicable, and in any event, on or before 5:00 p.m., Dallas,
Texas time, on the day immediately following the date of this
Agreement (the “ Stockholder Approval Deadline
”), an irrevocable written consent from Ventures in
substantially the form attached to this Agreement as
Exhibit C in order to satisfy the Common Stockholder
Approval in lieu of a meeting pursuant to Section 228 of the
DGCL (such written consent, as duly executed and delivered by
Ventures, the “ Ventures Consent ”) for
the purpose of adopting this Agreement. Promptly following the
receipt by the Company of the Ventures Consent, if delivered to the
Company from Ventures, the Company shall deliver to Parent a copy
of the executed Ventures Consent (including by facsimile or other
electronic image scan transmission).
(b) If the Ventures Consent is
obtained and delivered to Parent before the Stockholder Approval
Deadline, as soon as reasonably practicable, and in any event
thereafter, the Company shall, with the
assistance of Parent, giving good faith consideration to
Parent’s comments, prepare and file with the SEC an
information statement in preliminary form of the type contemplated
by Rule 14c-2 promulgated under the Exchange Act related to
the Merger and this Agreement (including therein a notice of
appraisal rights in accordance with Section 262(d) of the DGCL
and the notices of action by written consent required by
Section 228(e) of the DGCL) (collectively, as amended or
supplemented, the “ Information Statement
”). Notwithstanding the foregoing, if, and only if, an
Alternative Approval Determination is made, as soon as reasonably
practicable thereafter, the Company shall, with the assistance of
Parent, giving good faith consideration to Parent’s comments,
and in lieu of the Information Statement, prepare and file with the
SEC preliminary proxy materials constituting the Proxy Statement
and shall take, in accordance with the Company Organizational
Documents and applicable Laws, all reasonable actions necessary to
seek the Common Stockholder Approval, as mutually agreed by the
Company and Parent, by either: (1) soliciting the written
consent of the Company’s stockholders by proxy (the “
Company Stockholders Consent ”) or
(2) soliciting the vote of the Company’s stockholder at
a meeting of the Company’s stockholders (the “
Company Stockholders Meeting ”). Unless
the Company Board has made a Change in Board Recommendation in
accordance with Section 6.03 , the Company shall
include the Company Board Recommendation in any Proxy Statement
filed by the Company in accordance herewith.
(c) The Company shall use
commercially reasonable efforts to have the Information Statement
or Proxy Statement, as applicable, cleared by the SEC as promptly
as practicable and shall thereafter file with the SEC and mail to
the Company stockholders as promptly as practicable the definitive
Information Statement or Proxy Statement, as applicable, and all
other materials required for obtaining either the Company
Stockholders Consent or holding the Company Stockholders Meeting.
The Company shall (i) use its commercially reasonable efforts to
respond as promptly as reasonably practicable to any comments
received from the SEC or any required amendments with respect to
the preliminary Information Statement or Proxy Statement, as
applicable, and resolve such comments with the SEC, and (ii) as
promptly as reasonably practicable after the date on which the
Company files the definitive Information Statement or Proxy
Statement, as applicable, in compliance with the Exchange Act,
cause such filing to be mailed to the stockholders of the Company.
Each of Parent, Merger Sub and the Company shall furnish all
information concerning itself and the transactions contemplated by
this Agreement as may be reasonably requested by the SEC in
connection with the preparation, filing and distribution of an
Information Statement or a Proxy Statement, as applicable. The
Company shall notify Parent and Merger Sub promptly upon the
receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to
the Information Statement or Proxy Statement, as applicable, or for
additional information and shall consult with Parent and Merger Sub
regarding, and supply Parent and Merger Sub with copies of, all
correspondence between the Company and its officers, directors,
employees, accountants, consultants, auditors, counsel, financial
advisors and other agents and representatives (collectively,
“ Representatives ”), on the one hand,
and the SEC and its staff, on the other hand, with respect to the
Information Statement or Proxy Statement, as applicable. Prior to
filing or mailing any proposed amendment of or supplement to the
Information Statement or Proxy Statement, as applicable, or
responding to any comments of the SEC with respect thereto, the
Company shall (x) provide Parent a reasonable opportunity to review
and comment on such document or response and (y) give reasonable
consideration to all additions, deletions or changes
suggested thereto by Parent and its legal
counsel. If at any time prior to obtaining the Company Stockholders
Consent or the Company Stockholders Meeting any information
relating to the Company or Parent, or any of their respective
affiliates, is discovered by the Company or Parent that should be
set forth in an amendment or supplement to the Information
Statement or Proxy Statement, as applicable, so that such filing
shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
circumstances under which they are made, not misleading, or as
otherwise required by applicable Law or any applicable rules or
regulations of Nasdaq, the party that discovers such information
shall promptly notify the other parties, and an appropriate
amendment or supplement describing such information promptly shall
be filed with the SEC and, to the extent required by Law,
disseminated to the stockholders of the Company, in each case as
and to the extent required by applicable Law or any applicable
rules or regulations of Nasdaq.
(d) If an Alternative Approval
Determination is made, the Company shall seek the Company
Stockholders Consent unless the Company and Parent mutually
determine, in good faith, that seeking the Company Stockholders
Consent may be reasonably expected to be adverse to the Company or
otherwise delay the consummation of the transactions contemplated
by this Agreement, in which case the Company shall hold a Company
Stockholders Meeting in accordance herewith. If there is an
Alternative Approval Determination and the parties have determined
(and such determination is made in accordance with the immediately
preceding sentence) to hold a Company Stockholders Meeting, the
Company, acting through the Company Board, shall promptly and duly
call, give notice of, convene and hold as soon as reasonably
practicable following confirmation by the SEC that the SEC has no
further comments to the Proxy Statement a Company Stockholders
Meeting, and shall use its commercially reasonable efforts to
solicit and obtain the Common Stockholder Approval at such Company
Stockholders Meeting. Subject to termination of this Agreement
pursuant to Section 8.01 , if there is an Alternative
Approval Determination and the parties have determined (and such
determination is made in accordance with the first sentence of this
Section 6.01(d) ) to seek the Company Stockholders Consent
and such Company Stockholders Consent is not obtained, the Company
shall be required to hold the Company Stockholders Meeting and
comply with its other obligations under this Agreement regardless
of whether the Company Board has effected a Change in Board
Recommendation (as defined in Section 6.03(c) ) in
accordance with Section 6.03(c) . Notwithstanding any
provision of this Agreement to the contrary, the Company may, after
consultation with Parent, determine to adjourn, recess or postpone
the Company Stockholders Meeting (i) to the extent required by Law
or fiduciary duty, (ii) to the extent necessary to ensure that any
required supplement or amendment to the Proxy Statement is provided
to the stockholders of the Company within a reasonable amount of
time in advance of the Company Stockholders Meeting, (iii) if, as
of the time for which the Company Stockholders Meeting is
originally scheduled (as set forth in the Proxy Statement), there
are insufficient shares of Company Common Stock represented (either
in person or by proxy) to constitute a quorum necessary to conduct
the business of the Company Stockholders Meeting, solely for the
purpose of obtaining, and for the time reasonably necessary to
obtain, such a quorum, or (iv) if, as of the time for which the
Company Stockholders Meeting is originally scheduled (as set forth
in the Proxy Statement), sufficient votes to constitute the Common
Stockholder Approval have not been obtained, solely for the purpose
of soliciting, and for the time reasonably necessary to solicit,
additional proxies and votes to obtain Common Stockholder
(e) All documents that the Company,
Parent or Merger Sub are responsible for filing with the SEC in
connection with the transactions contemplated hereby shall comply
in all material respects with the requirements of applicable Law,
including the Exchange Act.
Section 6.02. Access to
Information; Confidentiality of Information .
(a) From the date of this Agreement
to the earlier of the Effective Time or the termination of this
Agreement pursuant to Section 8.01 , the Company shall,
and shall cause its subsidiaries and its and their respective
Representatives to afford Parent and Merger Sub and their
Representatives, upon reasonable prior notice, reasonable access
during normal business hours to the Representatives, properties,
offices and other facilities and to the books and records of the
Company and its subsidiaries and the Company shall furnish as
promptly as reasonably practicable to Parent (i) a copy of
each report, schedule, registration statement and other document
submitted or filed by the Company during such period with any
Governmental Authority as Parent may reasonably request and
(ii) all information concerning its business and properties as
Parent may reasonably request, subject to compliance with
applicable Law and other than any such information that relates to
the negotiation and execution of this Agreement or any Acquisition
Proposals (it being understood that information relating to any
Acquisition Proposal shall be governed by Section 6.03
). The foregoing notwithstanding, the Company shall not be
required to afford such access if such access would reasonably be
likely to (i) unreasonably disrupt or interfere with the
business or operations of the Company or any of its subsidiaries,
(ii) violate the terms of the Clean Room Agreement or any
other Contract to which the Company or any of its subsidiaries is a
party (provided that, in the case of the other Contracts, the
Company shall use commercially reasonable efforts to obtain