Exhibit 3.16
One or more natural persons of the age of 21 years or more may incorporate
a business corporation by signing, verifying, and delivering Articles of
Incorporation in duplicate to the Corporation Commissioner. The procedure for
the formation of business corporations is set forth in ORS 57.306 through
57.331. See ORS 57.311 for the coated of Articles of Incorporation.
Articles of Incorporation
OF
WILLAMETTE FALLS AMBULANCE SERVICE, INC.
The undersigned natural person(s) of the age of twenty-one years or more,
acting as incorporators under the Oregon Business Corporation Act, adopt the
following Articles of Incorporation:
ARTICLE I The name of this corporation is Willamette Falls Ambulance Service,
Inc. (The corporate name must contain the word "Corporation", "Company",
"Incorporated" or "Limited" or an abbreviation of one of such words.) and its
duration shall be perpetual
ARTICLE II The purpose or purposes for which the corporation is organized are:
To engage in any lawful activity for which corporations may be
organized under the Oregon Business Corporation Act, ORS Chapter 57.
(It is not necessary to set forth in the articles any of the corporate powers
enumerated in ORS 57.030 and 57.035. It, is sufficient to state, either alone or
with other purposes, "That the corporation may engage in any lawful activity for
which corporations may be organized under ORS Chapter 57"; however, it is
desirable to state the primary purpose of the corporation in conjunction with
such statement.)
ARTICLE III The aggregate number of shares which the corporation shall have
authority to issue is
500 shares of capital stock without nominal or par value.
(Insert statement as to par value of such shares or a statement that all of such
shares are to be without par value. If there is more than one class of stock,
insert a statement as to the preferences, limitations and relative rights of
each class.)
ARTICLE IV The address of the initial registered office of the corporation is
1404 Standard Plaza, Portland, Oregon 97204
(Street and Number) (Zip Code)
and the name of its initial registered agent at such address is Joyle C. Dahl
ARTICLE V The number of directors constituting the initial board of directors of
the corporation is three (At least three), and the names and address of the
persons who are to serve as directors until the first annual meeting of
shareholders or until their successors are elected and shall qualify are:
Address
------------------------------------
Name (Street and Number) (Zip Code)
- ---- ----------------------- ----------
Dennis H. Marsh 1015 Cornell Avenue
Gladstone, Oregon 97027
John William Reed 16901 S. E. Division
Portland, Oregon 97236
Joyle C. Dahl 1404 Standard Plaza
Portland, Oregon 97204
ARTICLE VI The name and address of each incorporator is:
Address
------------------------------------
Name (Street and Number) (Zip Code)
- ---- ----------------------- ----------
Joyle C. Dahl 1404 Standard Plaza
Portland, Oregon 97204
ARTICLE VII (Add provisions for the regulation of the internal affairs of the
corporation as may be appropriate.)
Two directors shall constitute a quorum for the transaction of any
business of the corporation.
STATE OF OREGON )
ss.
County of Multnomah )
I, the undersigned incorporator, herewith execute the foregoing and, being first
duly sworn, declare the statements contained therein are true.
Joyle C. Dahl
Subscribed and sworn to before me this 29th day of May, 1968.
/s/ Jean A. Novotny
- -------------------------------------
Notary Public for Oregon
My commission expires: Dec. 18, 1968
Submit Original and One
True Copy
No Fee Required
STATE OF OREGON
DEPARTMENT OF COMMERCE
CORPORATION DIVISION
ARTICLES OF AMENDMENT
By Shareholders
(ORS 57.370)
1. Name of the corporation prior to amendment Willamette Falls Ambulance
Service, Inc.
2. Date amendment was adopted by shareholders August 18, 1986.
3. State article number(s) and set forth article(s) as amended.
Article I
The name of this corporation Is Buck Medical Services, Inc.
4. Shareholder Vote:
Class Number of Shares Number of Shares Number of Shares Number of Shares
of Shares Outstanding Entitled to Vote Voted For Voted Against
- --------- ---------------- ---------------- ---------------- ----------------
Common 30 30 30 0
5. Other provisions if applicable required to be set forth in ORS
57.370(6) and (7).
We, the undersigned officers, declare under the penalties of perjury that
we have examined the foregoing and, to the best of our knowledge and belief it
is true, correct and complete.
By: /s/ X and /s/ X
------------------------------- ------------------------------------
President or Vice President Secretary or Assistant Secretary
Dated Eighteenth of Aug, 1986.
Person to contact about this filing.
G. Todd Norvell (503) 224-5858
NAME PHONE NUMBER
Submit the original and one true copy to the Corporation Division, Commerce
Bldg., 158 12th Street NE, Salem, Oregon 97310.
BC-3 (8-85)
UNANIMOUS WRITTEN CONSENT OF
SHAREHOLDER AND BOARD OF DIRECTORS OF
WILLAMETTE FALLS AMBULANCE SERVICE, INC.
WHEREAS the undersigned are the sole shareholder and all directors of
Willamette; Falls Ambulance Service, Inc., an Oregon corporation, and
WHEREAS the undersigned desire to take the action hereinafter set forth by
unanimous consent pursuant to ORS 57.791,
NOW, THEREFORE the undersigned hereby adopt the following resolutions:
RESOLVED that Article 1 of the corporation's Articles of Incorporation
be amended to read in full as follows:
"Article I
"The name of this corporation is Buck Medical Services, Inc."
IN WITNESS WHEREOF the undersigned have executed this consent as of August
18, 1986.
SHAREHOLDER BOARD OF DIRECTORS
/s/ Dennis H. Marsh /s/ Dennis H. Marsh
- ------------------------------------- ----------------------------------------
Dennis H. Marsh Dennis H. Marsh
/s/ George W. Thomas
----------------------------------------
George W. Thomas
ARTICLES OF MERGER
By Shareholders
PLEASE TYPE OR PRINT LEGIBLY IN BLACK INK
1. Names of corporations proposing to merge:
A. Buck Medical Services, Inc. Oregon registry # 083500-19
B. BMS Acquisition Corp. Oregon registry # 32341380
2. Name of the surviving corporation: Buck Medical Services, Inc.
3. A copy of the plan of merger is attached.
4. Corporation A check the appropriate statement:
[ ] Shareholder approval was not required.
[X] Shareholder approval was required. The shareholder vote was as
follows:
Class or series of Number of shares Number of votes Number of votes Number of votes
shares outstanding entitled to be cast cast for cast against
- ------------------ ---------------- ------------------- --------------- ---------------
Common 30 30 30 0
Corporation B - check the appropriate statement:
[ ] Shareholder approval was not required.
[X] Shareholder approval was required. The shareholder vote was as
follows:
Class or series of Number of shares Number of votes Number of votes Number of votes
shares outstanding entitled to be cast cast for cast against
- ------------------ ---------------- ------------------- --------------- ---------------
Common 100 100 100 0
Execution for
Corporation A /s/ Dennis H. Marsh Dennis H. Marsh President
----------------------------
Signature Printed name Title
Execution for
Corporation B /s/ Paul M. Verrochi Paul M. Verrochi Vice President
----------------------------
Signature Printed name Title
Person to contact about this filing: William George (617) 951-7313
Name Daytime phone number
Make checks payable to the Corporation Division. Submit the completed form and
fee to: Corporation D vision, Business Registry, 158 12th Street NE, Salem,
Oregon 97310-0210.
AGREEMENT AND PLAN OF REORGANIZATION
By and Among
AMERICAN MEDICAL RESPONSE, INC.
BMS ACQUISITION CORP.
BUCK MEDIAL SERVICES, INC.
DENNIS H. MARSH
and
MICHAEL T. MARSH
January 11, 1993
TABLE OF CONTENTS
PAGE
----
1. MERGER .............................................................. 1
1.1 The Merger .................................................. 1
1.2 Filing of Certificate of Merger ............................. 2
1.3 Effective Time of the Merger ................................ 2
1.4 Effect of the Merger ........................................ 2
1.5 Further Assurances .......................................... 2
2. ARTICLES OF INCORPORATION; BY-LAWS; BOARD OF DIRECTORS; OFFICERS .... 2
2.1 Articles of Incorporation ................................... 2
2.2 By-Laws ..................................................... 2
2.3 Directors ................................................... 2
2.4 Officers .................................................... 3
3. CONVERSION OF SHARES ................................................ 3
3.1 Conversion................................................... 3
3.2 Certificates................................................. 3
4. CLOSING ............................................................. 4
5. ESCROW .............................................................. 4
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS ...................... 4
6.1 Due Organization............................................. 4
6.2 Authorization................................................ 5
6.3 No Conflicts; Approvals ..................................... 5
6.4 Capital Stock of Company ................................... 6
6.5 Transactions in Capital Stock ............................... 6
6.6 No Bonus Shares ............................................. 6
6.7 Subsidiaries................................................. 6
6.8 Predecessor Status; etc...................................... 6
6.9 Financial Statements ........................................ 6
6.10 Liabilities and Obligations ................................. 7
6.11 Accounts and Notes Receivable ............................... 8
6.12 Permits and Intangibles...................................... 8
6.13 Real and Personal Property .................................. 9
6.14 Material Contracts and Commitments .......................... 10
6.15 Labor Matters ............................................... 11
6.16 Real Property ............................................... 11
6.17 Insurance ................................................... 11
6.18 Compensation ................................................ 11
6.19 Employee Benefit Plans ...................................... 12
6.20 Qualified Plans ............................................. 12
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6.21 Conformity with Law ......................................... 13
6.22 Taxes........................................................ 13
6.23 Completeness ................................................ 14
6.24 Government Contracts......................................... 14
6.25 Absence of Changes........................................... 14
6.26 Deposit Accounts; Powers of Attorney......................... 15
6.27 Environmental Matters ....................................... 16
6.28 Underground Storage Tanks ................................... 16
6.29 Brokers and Finders ......................................... 17
6.30 Relations with Government ................................... 17
6.31 Disclosure................................................... 17
7. REPRESENTATIONS OF AMERICAN AND NEWCO ............................... 17
7.1 Due Organization ............................................ 17
7.2 Authorization ............................................... 18
7.3 No Conflicts; Approvals...................................... 18
7.4 American Stock .............................................. 18
7.5 Prospectus................................................... 19
7.6 Disclosure .................................................. 19
7.7 Investigation ............................................... 19
7.8 Brokers and Finders.......................................... 19
8. COVENANTS OF STOCKHOLDERS AND THE COMPANY PRIOR TO CLOSING........... 19
8.1 Access, and Cooperation...................................... 19
8.2 Conduct of Business Pending Closing ......................... 20
8.3 Prohibited Activities........................................ 20
8.4 Notice to Bargaining Agents ................................. 22
8.5 No Shop...................................................... 22
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDERS
9.1 Representations and Warranties; Performance of Obligations... 22
9.2 Proceedings Satisfactory .................................... 22
9.3 No Litigation................................................ 22
9.4 Escrow Agreement............................................. 23
9:5 Employment Agreement......................................... 23
9.6 Consulting Agreement......................................... 23
9.7 Opinion of Counsel........................................... 23
9.8 Environmental Reports........................................ 23
10. CONDITIONS TO OBLIGATIONS OF AMERICAN AND NEWCO...................... 23
10.1 Representations and Warranties; Performance of Obligations .. 24
10.2 Proceedings Satisfactory .................................... 24
10.3 No Litigation ............................................... 24
10.4 Examination of Financial Statements.......................... 24
10.5 No Material Adverse Change................................... 24
10.6 Due Diligence ............................................... 24
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10.7 Stockholders Release......................................... 24
10.8 Escrow Agreement ............................................ 25
10.9 Employment Agreements ....................................... 25
10.10 Consulting Agreement ........................................ 25
10.11 Environmental Reports ....................................... 25
10.12 Durable Medical Division .................................... 25
10.13 Related Transactions ........................................ 25
10.14 Opinion of Counsel .......................................... 25
10.15 Consents and Approvals ...................................... 25
10.16 Additional Liabilities and Obligations ...................... 25
10.17 Additional Contracts ........................................ 26
10.18 Repayment of Indebtedness ................................... 26
11. COVENANTS AFTER CLOSING ............................................. 26
11.1 Release from Guarantees ..................................... 26
11.2 Payment of Taxes ............................................ 26
11.3 Filing Final Tax Return ..................................... 26
12. INDEMNIFICATION ..................................................... 26
13. TERMINATION OF AGREEMENT ............................................ 27
13.1 Termination ................................................. 27
13.2 Liabilities in Event of Termination ......................... 27
14. NONCOMPETITION ...................................................... 27
14.1 Prohibited Activities ....................................... 27
14.2 Damages ..................................................... 28
14.3 Reasonable Restraint ........................................ 29
14.4 Severability; Reformation ................................... 29
14.5 Independent Covenant ........................................ 29
14.6 Materiality ................................................. 29
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION............................ 29
15.1 Stockholder ................................................. 29
15.2 American .................................................... 30
15.3 Damages ..................................................... 30
16. FEDERAL SECURITIES ACT AND RESTRICTIONS ON THE SHARES ............... 31
16.1 Sophistication............................................... 31
16.2 Registration Rights ......................................... 32
16.3 Availability of Rule 145..................................... 33
17. GENERAL . ........................................................... 34
17.1 Cooperation ................................................. 34
17.2 Successors and Assigns ...................................... 34
17.3 Entire Agreement ............................................ 34
17.4 Counterparts ................................................ 34
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17.5 Expenses .................................................... 34
17.6 Notices ..................................................... 35
17.7 Governing Law ............................................... 36
17.8 Survival of Representations and Warranties................... 36
17.9 Exercise of Rights and Remedies.............................. 36
17.10 Time......................................................... 36
17.11 Reformation and Severability................................. 36
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AGREEMENT AND PLAN OP REORGANIZATION
THIS AGREEMENT AND PLAN OP REORGANIZATION (the "Agreement") is made as of
the 11th day of January, 1993, among AMERICAN MEDICAL RESPONSE, INC., a Delaware
corporation ("American"), BMS ACQUISITION, INC., an Oregon corporation
("Newco"), BUCK MEDICAL SERVICES, INC., an Oregon corporation (the "Company")
and DENNIS H. MARSH and MICHAEL T. MARSH (collectively, the "Stockholders"), the
owners of all of the outstanding capital stock of the Company.
RECITALS
WHEREAS, Newco is a corporation duly organized and existing under the laws
of the State of Oregon, having been incorporated on December 14, 1992, solely
for the purpose of completing this transaction, and is a wholly-owned subsidiary
of American;
WHEREAS, the Company is a corporation duly organized and existing under the
laws of the State of Oregon; and
WHEREAS, the Acquisition Committee of the Board of Directors of American
and the respective Boards of Directors of Newco and the Company (all of which
companies are hereinafter collectively referred to as "Constituent
Corporations") deem it advisable and in the best interests of the Constituent
Corporations and their respective stockholders that Newco merge with and into
the Company pursuant to this Agreement and the applicable provisions of the laws
of the State of Oregon, such transaction sometimes being herein called the
"Merger".
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. MERGER.
1.1 The Merger. At the Effective Time (as defined in Section 1.3), Newco
shall be merged with and into the Company pursuant to the Oregon Business
Corporation Act (the "Corporation Law"). Thereupon, the corporate identity and
existence of the Company, with all its rights, privileges, impunities, powers
and purposes, shall continue unaffected and unimpaired by the Merger, and the
corporate identity and existence of Newco, with all its rights, privileges,
immunities, powers and purposes, shall be merged into the Company as the
corporation surviving the Merger and the Company shall be fully vested
therewith. The separate identity, existence and corporate organization of Newco
shall cease upon the Merger becoming effective as herein provided and thereupon
Newco and the Company shall be a single corporation (herein sometimes called the
"Surviving Corporation").
1.2 Filing of Certificate of Merger. At the Closing (as defined in Section
5), the Company and Newco will cause Articles of Merger in substantially the
form of Annex I hereto (the "Articles of Merger") to be executed, attested and
filed with the office of the Secretary of State of the State of Oregon as
provided in the Corporation Law.
1.3 Effective Time of the Merger. The Merger shall be effective immediately
upon the filing of the Articles of Merger as aforesaid, which time is herein
sometimes referred to as the "Effective Time".
1.4 Effect of the Merger. The Merger shall have the effect set forth in the
Corporation Law.
1.5 Further Assurance. If at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or that any other things are necessary,
desirable or proper to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, the title to any property or rights of Newco acquired or
to be acquired by the Surviving Corporation by reason of, or as a result of, the
Merger, the Company and Newco agree that the Company, Newco and their proper
officers and directors shall and will execute and deliver all such proper deeds,
assignments and assurances in law and do all things necessary, desirable or
proper to vest, perfect or confirm title to such property or rights in the
Surviving Corporation and otherwise to carry out the purpose of this Agreement,
and that the proper officers and directors of Newco, the proper officers and
directors of the Company, and the proper officers and directors of the Surviving
Corporation are fully authorized in the name and on behalf of the Company or
Newco or otherwise to take any and all such action.
2. ARTICLES OF INCORPORATION; BY-LAWS; BOARD OF DIRECTORS; OFFICERS.
2.1 Articles of Incorporation. From and after the Effective Time, the
Articles of Incorporation of the Company, as in effect immediately prior to the
Effective Time, as the same may thereafter be amended from time to time as
provided by the Corporation Law, shall be, and may be separately certified as,
the Articles of Incorporation of the Surviving Corporation.
2.2 By-Laws. The by-laws of the Company as in effect immediately prior to
the Effective Time shall be the by-laws of the Surviving Corporation until the
same shall thereafter be altered, amended or repealed in accordance with the
Corporation Law, the Articles of Incorporation of the Surviving Corporation and
said by-laws.
2.3 Directors. From and after the Effective Time, the members of the Board
of Directors of the Surviving Corporation shall consist of the following
persons, each of such persons to serve, subject to the provisions of the
Articles of Incorporation and by-laws of the Surviving Corporation, until his
successor is elected and qualified:
Paul M. Verrochi
Dominic J. Puopolo
Paul T. Shirley
Trace Skeen
2.4 Officers. From and after the Effective Time, the officers of the
Company immediately prior to the Effective Time shall continue as the officers
of the Surviving Corporation in the same capacity or capacities, each of such
officers to serve, subject to the
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provisions of the Articles of Incorporation and by-laws of the Surviving
Corporation, until his successor is elected and qualified.
3. CONVERSION OF SHARES.
3.1 Conversion. At the Effective Time, the issued shares of capital stock
of Company and Newco shall, by virtue of the Merger and without any action on
the part of any holder thereof, become and be converted or canceled as follows:
(a) Each outstanding share of common stock of Newco ("Newco Stock")
held of record by American will automatically be converted into one fully
paid and non-assessable share of common stock of the Surviving Corporation.
(b) All the outstanding shares of Company Stock (as defined in Section
6.4) will be converted into the right to receive (i) that number of shares
of the common stock, $.01 par value of American (the "American Common
Stock"), obtained by dividing $2,300,000 by the Closing Market Price, (ii)
an amount equal to $4,750,000 in cash, and (iii) an amount equal to
$750,000, which shall be placed in escrow in accordance with Section 5. The
term "Closing Market Price" shall mean the average of the closing prices of
American Common Stock on the New York Stock Exchange, as reported in the
Wall Street Journal, for the ten consecutive trading days ending on the
fifth business day prior to the closing.
(c) The consideration recited in paragraph (b) above shall be
allocated between the Stockholders in accordance with Schedule 3.1(c)
attached hereto, and each Stockholder hereby elects to receive in the
Merger the consideration set forth next to his name on said Schedule.
3.2 Certificates. On or prior to the Effective Time, each Stockholder shall
surrender to American for cancellation by the Company the certificates
representing all of the issued and outstanding shares of Company Stock owned by
such Stockholder. Each such certificate surrendered shall be duly endorsed in
blank, or accompanied by stock powers, with signatures guaranteed by a national
bank or a member firm of the New York Stock Exchange (with all necessary
transfer taxes paid by, and stamps affixed acquired at the expense of, the
Stockholders), and shall be signed by each Stockholder exactly as his name
appears on the face of the certificate. At the Effective Time after such
surrender to American of such certificates, American shall deliver to the holder
thereof, a certificate or certificates evidencing the number of shares of
American Common Stock to which such holder is entitled pursuant to clause (i) of
Section 3.1(b) and the amount of cash to which such holder is entitled pursuant
to clause (ii) of Section 3.1(b). Each such certificate delivered by American
shall bear the legend required under Section 16.
4. CLOSING.
The closing of the Merger and the other transactions contemplated hereby
(the "Closing") shall take place at the offices of Ropes & Gray, Boston,
Massachusetts, or at such other place as may be agreed to by American, the
Company and the Stockholders, on January 11, 1993, or on
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such date not later than January 31, 1993, as may be agreed to by American, the
Company and the Stockholders (the "Closing Date").
5. ESCROW.
At the Effective Time, American shall deliver $750,000 to First Interstate
Bank Oregon, N.A. as escrow agent (the "Escrow Agent") under the Escrow
Agreement (the "Escrow Agreement"), which funds plus, to the extent provided in
the Escrow Agreement, interest thereon (the "Escrow Funds") shall be held in
escrow by the Escrow Agent pursuant to the Escrow Agreement as security for the
Stockholders' obligations as provided therein.
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS.
The Stockholders jointly and severally make the following representations
and warranties to, and covenants with, American. When a person makes a
representation "to the best of his or its knowledge" such person shall have
conducted a reasonable investigation of the subject matter of such
representation and shall have reasonable ground to believe, and shall believe,
that the representation and warranty as stated is true.
6.1 Due Organization. The Company is a duly organized and validly existing
corporation under the laws of the State of Oregon, and is duly authorized,
qualified and licensed under all applicable laws, regulations, ordinances and
orders of public authorities to carry on its business in the places and in the
manner as now conducted, except where the failure to be so authorized, qualified
or licensed would not have a material adverse effect on the business of the
Company taken as a whole. Complete and correct copies of the Articles of
Incorporation of the Company (certified by the Secretary of State of the State
of Oregon) and the By-laws of the Company, (certified by the Secretary of the
Company) are attached hereto as Schedule 6.1. The stock records and minute books
of the Company heretofore made available to American are complete and correct.
6.2 Authorization. The Company has all corporate power and authority, and
each of the Stockholders has all power and authority, to enter into and perform
this Agreement and the other documents and instruments to be delivered pursuant
to this Agreement and to consummate the Merger and the other transactions
contemplated hereby. The execution and delivery by the Company of this Agreement
and the consummation by the Company of the Merger and the other transactions
contemplated by this Agreement have been duly and validly authorized by all
necessary corporate action on the part of Company. This Agreement has been duly
and validly executed and delivered by the Company and each of the Stockholders,
constitutes the legal, valid and binding obligation of each of them and is
enforceable against each of them in accordance with its terms, subject as to
enforcement of remedies to fraudulent conveyance, bankruptcy, reorganization,
insolvency and similar laws from time to time in effect.
6.3 No Conflicts; Approvals.
(a) Neither the execution, delivery and performance of this Agreement
by the Company and by the Stockholders nor the consummation of the Merger
and the other transactions contemplated hereby will (i) conflict with or
result in a breach of any provision of the Articles of Incorporation or
Bylaws of Company, (ii) except as disclosed
-4-
on Schedule 6.3, result in any conflict with, breach of, or default (or
give rise to any right to termination, cancellation or acceleration or loss
of any right or benefit) under or require any consent or approval which has
not been obtained with respect to any of the terms, conditions or
provisions of any material contract or agreement to which either
Stockholder or the Company is a party or by which any of them or their
respective assets may be bound, including without limitation, the Contracts
(as defined in Section 6.14) or (iii) violate any order, law, rule or
regulation applicable to either Stockholder or the Company or by which any
of them or their respective properties or assets may be bound.
(b) No action, consent or approval by, or filing by the Company or any
Stockholder with, any Federal, state, municipal, foreign or other court or
governmental body or agency, or any other regulatory body, is required in
connection with the execution, delivery or performance by the Stockholders
or the Company of this Agreement or the consummation by Company of the
Merger and the other transactions contemplated hereby, except (i) the
filing of the Articles of Merger with the Secretary of State of the State
of Oregon, (ii) any consent or approval obtained prior to the Closing, or
(iii) any consent or approval the failure of which to obtain would not have
a material adverse effect on the business of the Company taken as a whole.
6.4 Capital Stock of Company. The authorized capital stock of the Company
consists of 500 shares of common stock, no par value ("Company Stock"), of which
30 shares are issued and outstanding. All of the issued and outstanding shares
of the Company Stock have been duly authorized and validly issued and are fully
paid and nonassessable, and are owned, beneficially and of record, by the
Stockholders as set forth on Schedule 6.4. The Stockholders have, and as of the
Closing Date will have, good title to such shares, free and clear of all liens,
claims, security interests and encumbrances of every kind. Such shares were
offered, issued, sold and delivered by the Company in compliance with all
applicable state and federal laws governing the offer and sale of securities and
none of such shares were issued in violation of the preemptive rights of any
past or present stockholder.
6.5 Transactions in Capital Stock. Except as described in Schedule 6.5, the
Company has not acquired, directly or indirectly, any shares of its capital
stock in the previous two years. No option, warrant, call, conversion right or
commitment of any kind exists that obligates the Company to issue any of its
authorized but unissued capital stock. In addition, the Company has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its capital stock or any interests therein or to pay any dividend or make
any distribution in respect thereof. Neither the voting stock structure of the
Company nor the ownership of shares by Stockholders has been altered or changed
within the previous two years.
6.6 No Bonus Shares. None of the shares of the Company Stock were issued
pursuant to awards, grants or bonuses.
6.7 Subsidiaries. The Company has no subsidiaries. Except as set forth in
Schedule 6.7, the Company does not presently own, of record or beneficially, or
control, directly or indirectly, any capital stock, securities convertible into
capital stock or any other equity interest in any corporation, association or
business entity. The Company is not, directly or indirectly, a participant in
any joint venture, partnership or other noncorporate entity.
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6.8 Predecessor Status, etc. Set forth in Schedule 6.8 is a listing of the
corporate names of all predecessor companies of the Company, including the names
of any entities from whom the Company previously acquired significant assets.
6.9 Financial Statements. Attached as Schedule 6.9 are copies of the
following financial statements of the Company (the "Financial Statements"):
(a) the Balance Sheet of the Transportation Services Division and
Transportation Management Services Division of the Company at December 31,
1991, and the related statement of operations, stockholders equity and cash
flows for the one-year period then ended, audited by KPMG Peat Marwick,
independent public accountants, together with the audit report thereon of
such independent public accountants; and
(b) the Balance Sheets of the Company at December 31, 1991, and
December 31, 1990, and the Statement of Operations and Retained Earnings
and the Statement of Cash Flows of the Company for the years then ended,
reviewed by Van Beek and Company, the Company's independent public
accountants, together with the review report thereon of such independent
public accountants; and
(c) the unaudited Balance Sheet of the Transportation Services
Division and Transportation Management Services Division of the Company at
October 31, 1992 (hereinafter referred to as the "Balance Sheet Date"), and
the related unaudited statements of operations, stockholders' equity and
cash flows for the ten-month period then ended reviewed by KPMG Peat
Marwick, independent public accountants, together with the review report
thereon of such independent public accountants.
The Financial Statements described in paragraph (b) above have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated (except as noted). The Financial
Statements described in paragraphs (a) and (c) above present fairly the
financial condition of the Transportation Services Division and Transportation
Management Services Division of the Company at the respective dates thereof and
the results of their operations for the periods covered thereby. The Financial
Statements described in paragraph (b) above present fairly the financial
condition of the Company at the respective dates thereof and the results of
their operations for the periods covered thereby.
6.10 Liabilities and Obligations. Schedule 6.10 sets forth an accurate list
as of the Balance Sheet Date of all material liabilities or obligations (other
than the liabilities and obligations of the Durable Medical Division assumed by
Marsh Medical Services, Inc., in connection with the transaction described in
Section 10.12) of the Company which are not reflected in the balance sheet
described in Section 6.9(c), or in the footnotes thereto, and any material
liabilities or obligations incurred thereafter not in the ordinary course of
business of any kind, character and description, whether accrued, absolute,
secured or unsecured, contingent or otherwise (other than the liabilities and
obligations of the Durable Medical Division assumed by Marsh Medical Services,
Inc., in connection with the transaction described in Section 10.12), together
with, in the case of those liabilities which are not fixed (other than possible
liabilities described on the "incident reports" described on Schedule 6.10), an
estimate of the maximum
-6-
amount which may be payable. For each such liability or Obligation for which the
amount is not fixed or is contested, Schedule 6.10 sets forth the following:
(a) a summary description of the liability together with the
following:
(i) references to copies of all relevant documentation relating
thereto provided to American;
(ii) amounts claimed and any other action or relief sought; and
(iii) name of claimant and all other parties to the information:
claim, suit or proceeding.
(b) the name of each court or agency before which such claim, suit or
proceeding is pending;
(c) the date such claim, suit or proceeding was instituted; and
(d) a reasonable best estimate by the Stockholders of the maximum
amount, if any, which is likely to become payable with respect to each such
liability (other than possible liabilities described on the "incident
reports" described on Schedule 6.10). (If no estimate is provided, the
Stockholders' best estimate shall for purposes of this Agreement be deemed
to be zero.)
6.11 Accounts and Notes Receivable. Schedule 6.11 sets forth an accurate
summary list as of the Balance Sheet Date of the accounts and notes receivable
of the Company, including receivables from and advances to employees and the
Stockholders, and an aging of all accounts and notes receivable showing amounts
due in 30-day aging categories. An accurate, detailed list of such items has
been delivered to American. All accounts and notes receivable of the Company
outstanding on the Closing Date arose from the sale of products and services in
the ordinary course of business and are legal and binding claims of the Company.
To the best of the Stockholders' knowledge, there have been no changes in the
accounts and notes receivable of the Company since the Balance Sheet Date other
than trade receivables in the ordinary course of business.
6.12 Permits and Intangibles.
(a) Schedule 6.12 sets forth an accurate list and summary description
of all material certificates of need, permits, titles (including motor
vehicle titles and current registrations), fuel permits, licenses,
franchises and certificates owned, held, licensed or otherwise used by the
Company (collectively, "Permits") and all trademarks, trade names, service
marks, patents, patent applications and copyrights owned or held by the
Company (collectively, "Intellectual Property"). To the best of the
Stockholders' knowledge, the Company's rights in such Permits and
Intellectual Property are adequate for the operation of the Company's
business as presently conducted. Neither the Company nor, to the best of
the Stockholders' knowledge, any other Party thereto, is in material
default thereunder. There are no claims or proceedings pending or, to the
best of the Stockholders' knowledge, threatened against the Company
asserting the infringement
-7-
by the Company of any trademark, service mark, copyright, patent, patent
right or other proprietary right of any other person. Neither the execution
and delivery of this Agreement nor the consummation of the Merger or the
other transactions contemplated hereby, will cause a default under or alter
or impair any rights, or give rise to any right to termination,
cancellation, or acceleration or loss of any right or benefit, or require
any consent or approval which has not been obtained under, or with respect
to, any Permit or Intellectual Property which could have a material adverse
effect on the business of the Company.
(b) The Stockholders have made available to, and specifically
identified (in writing or through employees of the Company) for, American,
a description and copies as of the date of this Agreement, of all material
records, reports, notifications, certificates of need, permits, pending
permit applications, engineering studies, environmental impact studies,
filed or submitted or, to the best of the Stockholder's knowledge, required
to be filed or submitted, to governmental agencies and of all material
notifications from such governmental agencies relating to the above or
relating to the discharge or release of materials into the environment or
otherwise relating to the protection of the public health or the
environment.
6.13 Real and Personal Property. Schedule 6.13:
(a) sets forth an accurate list and a substantially complete
description of all the real property leased by the Company;
(b) sets forth an accurate list of all licensed vehicles owned or
leased by the Company, and a fixed asset schedule that lists in summary
form all the fixed assets used in the Company's business carried on the
Company's books for tax purposes;
(c) includes true and complete copies of written leases for material
items of equipment and for real property on which are situated buildings,
warehouses, workshops, garages and other structures used in the operation
of the business of the Company;
(d) identifies those assets used in the Company's business which are
owned by affiliates of the Company;
(e) includes copies of all title reports and title insurance policies
received or owned by the Company; and
(f) includes a complete list and description of all real property
owned or leased by the Company or any of the Company's predecessors during
the previous ten years, other than residential properties leased by the
Company for living quarters for its employees.
Except as shown on Schedule 6.13, to the best of the Stockholders'
knowledge, substantially all of the vehicles, machinery and equipment of
the Company are in good working order and condition, ordinary wear and tear
excepted. All leases set forth on Schedule 6.13 are in full force and
effect and constitute valid and binding agreements of the Company and, to
the best of the Stockholders'
-8-
knowledge, the other parties (and their successors) thereto and neither the
Company, nor to the best of the Stockholders' knowledge, any other party
thereto, is in material default thereunder. All material fixed assets used
by the Company in the operation of its business are either owned by the
Company or leased by the Company under an agreement listed on Schedule
6.13.
6.14 Material Contracts and Commitments.
(a) Schedule 6.14 sets forth an accurate list of all material
contracts, commitments and similar agreements or arrangements, whether
written or oral (collectively, the "Contracts") to which the Company is a
party or by which it or any of its properties are bound (including, but not
limited to, employment agreements, joint venture or partnership agreements,
contracts with any labor organizations, loan agreements, indemnity or
guaranty agreements, bonds, mortgages, options to purchase land, liens,
pledges or other security agreements).
(b) The Stockholders have delivered to American true and complete
copies of Contracts that are in writing and an accurate and complete
description of all oral Contracts.
(c) Except to the extent set forth on Schedule 6.14, to the best of
the Stockholders' knowledge, the Company has complied with all material
commitments and obligations pertaining to the Contracts and is not in
material default under any Contract and has not received or given any
notice of default thereunder and no other party to a Contract is in
material default thereunder.
(d) Each of the Contracts is the legal, valid and binding obligation
of the Company, and to the best of the Stockholders' knowledge, the other
parties thereto. To the best of the Stockholders' knowledge, each of the
Contracts is in full force and effect and will continue in full force and
effect immediately following the Merger and the other transactions
contemplated hereby.
(e) To the best of the Stockholders' knowledge, none of the Company's
customers have canceled or substantially reduced or are currently
attempting or threatening to cancel or substantially reduce service.
(f) To the best of the Stockholder's knowledge, the Company is not a
party to any contract, agreement or other instrument or commitment which,
singly or in the aggregate, materially and adversely affects or is likely
to materially and adversely affect, the business of the Company taken as a
whole.
6.15 Labor Matters. Except as set forth in Schedule 6.15, the Company is
not bound by or subject to (and none of its assets or properties is bound by or
subject to) any arrangement with any labor union. Except as set forth in
Schedule 6.15, no employees of the Company are represented by any labor union or
covered by any collective bargaining agreement nor, to the best of the
Stockholders' knowledge, is any organization campaign to establish such
representation in progress. There is no pending or, to the best of the
Stockholders' knowledge threatened, labor dispute involving the Company and any
group of its employees nor has the
-9-
Company experienced any labor interruptions over the past three years. The
Company considers its relationship with employees to be good and, except as
disclosed on Schedule 6.15, does not anticipate that its relationships with its
union or employees will, or is likely to, result in a material adverse effect on
the business, operations, properties, assets or condition, financial or
otherwise, of the Company.
6.16 Real Property. The Company owns no real property.
6.17 Insurance. Schedule 6.17(a) sets forth an accurate list of all
insurance policies carried by the Company, copies of all property, general
liability, excess liability, data processing, commercial automobile, garage,
scheduled property, and workers' compensation insurance loss runs received for
the past three (3) policy years are identified on Schedule 6.17(a) and have been
previously provided to American. Copies of all policies currently in effect have
previously been delivered to American and are complete and correct. The
insurance carried by the Company with respect to its properties, assets and
business is in amounts sufficient for the reasonably prudent protection of the
properties, assets and business of the Company. To the best of the Stockholders'
knowledge, such insurance policies are currently in full force and effect and
shall remain in full force and effect through the Closing Date. To the best of
the Stockholders' knowledge, except as set forth on Schedule 6.17(b), the
Company's insurance has never been canceled and the Company has never been
denied coverage.
6.18 Compensation. Schedule 6.18 sets forth an accurate list of all
officers, directors and non-union key employees (having an annual salary in
excess of $35,000) of the Company, the rate of compensation (and the portions
thereof attributable to salary, bonus and ether compensation, respectively) of
each such person as of the Balance Sheet Date and any increase therein since the
Balance Sheet Date.
6.19 Employee Benefit Plans. Schedule 6.19 sets forth an accurate schedule
listing all material employee benefit or welfare plans of Company, including
without limitation any pension, profit-sharing, bonus, stock option, incentive,
deferred compensation, hospitalization, medical, insurance or other plan or
arrangement, and any employment or other agreement containing "golden parachute"
provisions, a description of such plans and arrangements and classifications of
employees covered thereby. Copies of such plans, agreements, and any trusts
related thereto have been delivered to American. To the best of the
Stockholders' knowledge, all employee benefit plans listed on Schedule 6.19 are
in substantial compliance with all applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and the regulations
issued thereunder, as well as with all other applicable federal, state and local
statutes, ordinances and regulations to the extent such laws are applicable.
6.20 Qualified Plans. All plans listed on Schedule 6.19 that are intended
to qualify (the "Qualified Plans") under Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code") are so qualified. Except as disclosed on
Schedule 6.19, to the best of the Stockholders' knowledge, all reports and other
documents required to be filed with any governmental agency or distributed to
plan participants or beneficiaries (including, but not limited to, actuarial
reports, audits or tax returns) have been timely filed or distributed, and
copies thereof have been delivered to American. To the best of the Stockholders'
knowledge, neither the Company nor any Stockholder nor any such plan listed in
Schedule 6.19 has engaged in any transaction
-10-
prohibited under the provisions of Section 4975 of the Code or Section 406 of
ERISA which has not been fully resolved. To the best of the Stockholders'
knowledge, no such plan listed in Schedule 6.19 has incurred an accumulated
funding deficiency, as defined in Section 412(a) of the Code and Section 302(1)
of ERISA; and, to the best of the Stockholders' knowledge, the Company has not
incurred any liability for excise tax or penalty due to the Internal Revenue
Service nor any liability to the Pension Benefit Guaranty Corporation which has
not already been paid. The Stockholders further represent that:
(i) there have been no terminations, partial terminations or
discontinuance of contributions to any such Qualified Plan intended to
qualify under Section 401(a) of the Code without notice to and approval by
the Internal Revenue Service to the extent notice and approval were
required;
(ii) no such plan listed in Schedule 6.19 subject to the provisions of
Title IV of ERISA has been terminated;
(iii) there have been no "reportable events" (as that phrase is
defined in Section 4043 of ERISA) with respect to any such plan listed in
Schedule 6.19 for which a required filing has not been made; and
(iv) the Company has no unsatisfied liability under Section 4062 of
ERISA.
6.21 Conformity with Law. 'To the best of the Stockholders' knowledge, the
Company is not in material default under any law or regulation or under any
order of any court or federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality having
jurisdiction over it. Except to the extent set forth in Schedule 6.10 there are
no claims, actions, suits or proceedings, pending or to the best of the
Stockholders' knowledge threatened, against or affecting the Company, at law or
in equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality having
jurisdiction over it and no notice of any such claim, action, suit or proceeding
has been received. To the best of the Stockholders' knowledge, the Company has
conducted and is conducting its business in substantial compliance with the
requirements, standards, criteria and conditions set forth in applicable
federal, state and local statutes, ordinances, permits, licenses, orders,
approvals, variances, rules and regulations and is not in violation of any of
the foregoing which might materially and adversely affect the business,
operations, affairs, prospects, properties, assets, profits or condition,
financial or otherwise, of the Company taken as a whole.
6.22 Taxes.
(a) The Company made an election to be taxed under the provisions of
Subchapter S of the Internal Revenue Code on December 22, 1986, to be
effective January 1, 1987. The Company has a taxable year ended December 31
and has not made an election to retain a fiscal year other than December 31
under Section 444 of the Code. Prior to January 1, 1993, the Company
utilized the cash receipts and disbursements method of accounting for
income tax purposes and had not changed its method of accounting in the
past five years. The Stockholders have executed all documents
-11-
sufficient to terminate the Company's election to be taxed as an S
corporation effective as of January 1, 1993, and the Company has changed to
the accrual method of accounting for tax purposes effective for the year
ending December 31, 1992, in each case in conformity with the Code and
applicable regulations thereunder and with applicable state law and
regulations.
(b) The Company has timely filed all requisite tax and information
returns which are required to be filed by it and has paid, or has made
adequate provision for the payment of, all taxes which may have or become
due pursuant to such returns or to any assessment received by it. To the
best of the Stockholders' knowledge, there is no additional assessment on
any basis therefor. To the best of the Stockholders' knowledge, there are
no open years, examinations in progress or claims against the Company for
federal or other taxes (including penalties and interest) for any period
and no notice of any claim, whether pending or threatened, for taxes has
been received. To the best of the Stockholders' knowledge, the amounts
shown as accruals for taxes on the financial statements of the Company as
of the Balance Sheet Date delivered to American as a part of Schedule 6.9
are sufficient for the payment of all taxes of the kinds indicated
(including penalties and interest) for all fiscal periods ended on or
before that date. Copies of (i) any tax examinations within the last six
years, (ii) extensions of statutory limitations and (iii) the federal and
local income tax returns and franchise tax returns of the Company for the
last three (3) fiscal years are attached hereto as Schedule 6.22.
6.23 Completeness. To the best of the Stockholders' knowledge, the copies
of all leases, instruments, agreements, licenses, permits, certificates or other
documents which are included on schedules attached hereto or have been
delivered, or made available to, and specifically identified (in writing or
through employees of the Company) for, to American in connection with the
transactions contemplated hereby are complete and correct.
6.24 Government Contracts. Except as set forth on Schedule 6.24, to the
best of the Stockholders' knowledge, the Company is not now and has never been a
party to any governmental contracts subject to price redetermination or
renegotiation.
6.25 Absence of Changes. Except as set forth on Schedule 6.25, since the
Balance Sheet Date, there has not been:
(i) any material adverse change in the financial condition, assets,
liabilities (contingent or otherwise), income or business of the Company;
(ii) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or business of the
Company;
(iii) any change in the authorized capital of the company or in its
securities outstanding or any change in its ownership interests or any
grant of any options, warrants, calls, conversion rights or commitments;
(iv) any declaration or payment of any dividend or distribution in
respect of the capital stock or any direct or indirect redemption, purchase
or other acquisition of any of the capital stock of the Company);
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(v) any increase in the compensation, bonus, sales commissions or fee
arrangement payable or to become payable by the Company to its officers,
directors, the Stockholders, employees, consultants or agents;
(vi) any work interruptions, labor grievances or claims filed,
proposed law or regulation or any event or condition of any character,
materially adversely affecting the business or future prospects of the
Company;
(vii) any sale or transfer, or any agreement to sell or transfer, any
material assets, property or rights of the Company to any person,
including, without limitation, the Stockholders and their affiliates;
(viii) any cancellation, or agreement to cancel, any indebtedness or
other obligation owing to the Company, including without limitation any
indebtedness or obligation of any Stockholder or any affiliate thereof;
(ix) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the assets, property
or rights of the Company or requiring consent of any party to the transfer
and assignment of any such assets, property or rights;
(x) any purchase or acquisition, or agreement, plan or arrangement to
purchase or acquire, any material property, rights or assets;
(xi) any waiver of any material rights or claims of the Company;
(xii) to the best of the Stockholders' knowledge, any breach,
amendment or termination of any material contract, agreement, license,
permit or other right to which the Company is a party; or
(xiii) any other transaction by the Company outside the ordinary
course of business.
6.26 Deposit Accounts; Powers of Attorney. Schedule 6.26 sets forth an
accurate schedule as of the date of this Agreement of:
(i) the name of each financial institution in which the Company has
accounts or safe deposit boxes;
(ii) the names in which the accounts or boxes are held;
(iii) the type of account; and
(iv) the name of each person authorized to draw thereon or have access
thereto.
-13-
Schedule 6.26 also sets forth the name of each person, corporation, firm or
other entity holding a general or special power of attorney from the Company and
a description of the terms of such power of attorney.
6.27 Environmental Matters. Except as set forth on Exhibit 6.27, (a) to the
best of the Stockholders' knowledge, the Company has never disposed of, or
contracted for the disposal of, in violation of law, hazardous wastes, hazardous
substances, infectious or medical waste, radioactive waste or sewage sludges as
those terms are defined by the Resource Conservation and Recovery Act of 1976,
as amended (the "RCM"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA"), the Atomic Energy Act of 1954,
as amended, or any comparable state laws, rules or regulations and (b) no such
wastes, substances, or sludges generated by the Company have finally come to be
located on any site which is or has been (including as a potential or suspect
site) included in any published federal, state, or local "superfund" or other
list of hazardous or toxic waste sites. Except as disclosed on Schedule 6.27, to
the best of the Stockholders' knowledge, there has been no storage or treatment
of solid wastes or hazardous wastes (as defined in RCRA) by Company or any
predecessor in interest (at any site or other facility owned or operated by
Company) in violation of any applicable law, rule, regulation, order, judgment
or permit or that would require any material remedial action under any
applicable law. Except as disclosed on Schedule 6.27, (a) the Company has not
received any notice of any violation with respect to asbestos or hazardous
substances at any of its sites, and (b) to the best of the Stockholders'
knowledge, there has been no spill, discharge, leak, emission, injection,
escape, dumping or release in reportable quantities onto any property owned by
the Company, leased by Company from Dennis H. Marsh or leased by the Company
from a third party other than residential properties leased by the Company from
a third party for living quarters for its employees, or into the environment
surrounding any such property of any hazardous substances as defined under any
local, state or Federal regulations or laws. The Company has never owned,
operated and/or leased a waste transfer, recycling, treatment, storage or
disposal facility. None of the Company's employees has, in the course and scope
of employment with the Company, been exposed in violation of any law or
regulation to hazardous, infectious, radioactive or toxic wastes or substances.
In addition, to the best of the Stockholders' knowledge, there has been no
assertion by any governmental agency or other regulatory authority or any
environmental lien or action.
6.28 Underground Storage Tanks. Except as set forth on Schedule 6.28, to
the best of the Stockholders' knowledge, the Company has never owned or leased
any real estate having any underground storage tanks containing petroleum
products (other than tanks containing heating oil in the case of residential
properties leased by the Company for living quarters for its employees) or
wastes or other hazardous substances regulated by 40 CFR 280 and/or other
applicable federal, state or local laws, rules and regulations and requirements.
6.29 Brokers and Finders. Neither any Stockholder nor the Company nor any
officer, director or employee of the Company has employed any broker, agent or
finder or incurred any liability for any brokerage fees, commissions or finders'
fees for the Merger or any other transactions contemplated by the Agreement or
otherwise. Neither the Company nor any of its officers, directors, or employees
on behalf of the Company has incurred any liabilities for any financial advisory
fees, brokerage fees, commissions or finders' fees that remain unpaid in
connection with any transaction or proposed transaction.
-14-
6.30 Relations with Government. Neither the Company nor any Stockholder has
made, offered or agreed to offer anything of value to any governmental official,
political party or candidate for government office in violation of applicable
law nor has it otherwise taken any action which would cause the Company to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended, for any law
of similar effect.
6.31 Disclosure. This Agreement and the schedules hereto and all other
document and information furnished to American and its representatives pursuant
hereto do not and will not include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein not
misleading. If the Company or the Stockholders become aware of any fact or
circumstance which would change a representation or warranty of the Company or
the Stockholders in this Agreement or any representation made on behalf of the
Company, the Company and the Stockholders shall immediately give notice of such
fact or circumstance to American. However, such notification shall not relieve
either the Company or the Stockholders of their respective obligations under
this Agreement.
7. REPRESENTATIONS OF AMERICAN AND NEWCO.
American and Newco jointly and severally make the following representations
and warranties to, and covenants with, the Stockholders.
7.1 Due Organization. Each of American and Newco is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and is duly authorized, qualified aid
licensed under all applicable laws, regulations, and ordinances of public
authorities to carry on its business in the places and in the manner as now
conducted except for where the failure to be so authorized, qualified or
licensed would not have a material adverse affect on the business of American,
on a consolidated basis. Copies of the Certificate of Incorporation of American
(certified by the Secretary of State of the State of Delaware), the Articles of
Incorporation of Newco (certified by the Secretary of State of the State of
Oregon) and the Bylaws of each of American and Newco (certified by the secretary
or assistant secretary of the respective corporations) have previously been
delivered to the Stockholders.
7.2 Authorization. Each of American and Newco has all corporate power and
authority to execute and deliver this Agreement and the other documents and
instruments to be delivered pursuant to this Agreement and to consummate the
Merger and the other transactions contemplated hereby. The execution and
delivery by American and Newco of this Agreement, the consummation of the Merger
and other transactions contemplated hereby by American and Newco have been duly
and validly authorized by all necessary corporate action on the part of American
and Newco. This Agreement has been duly and validly executed and delivered by
each of American and Newco and constitutes the valid and binding obligations of
each of them enforceable in accordance with its terms, subject as to enforcement
of remedies to fraudulent conveyance, bankruptcy, reorganization, insolvency and
similar laws from time to time in effect.
7.3 No Conflicts; Approvals.
(a) Neither the execution, delivery and performance of this Agreement,
the consummation of the Merger and other transactions contemplated hereby
by American
-15-
and Newco will (i) conflict with or result in a breach of any provision of
the charter or bylaws of either American or Newco, (ii) result in any
conflict with, breach of, or default (or give rise to any right to
termination, cancellation or acceleration or loss of any right or benefit)
under or require any consent or approval which has not been obtained with
respect to any of the terms, conditions or provisions of any indenture,
contract, agreement or instrument to which American or Newco is a party or
by which any of their respective properties maybe bound or (iii) violate
any order, law, rule or regulation applicable to American or Newco or by
which any of their respective properties is bound.
(b) No action, consent or approval by, or filing by American or Newco
with, any Federal, state, municipal, foreign or other court or governmental
body or agency, or any other regulatory body, is required in connection
with the execution and delivery by American or Newco of this Agreement or
the consummation by American and Newco of the Merger and the other
transactions contemplate hereby, other than such as shall have been made or
obtained prior to the Closing and other than the filing of the Articles of
Merger with the Secretary of State of the State of Oregon.
7.4 American Stock. The shares of American Common Stock to be issued to the
Stockholders pursuant to Section 3.2 (the "Shares") will be duly authorized,
validly issued, fully paid and nonassassable.
7.5 Prospectus. American has furnished to the Stockholders a copy of
American's Prospectus dated January 7, 1993 (the "Prospectus"), which is part of
the Registration Statement on Form S-1 filed with the Securities and Exchange
Commission ("SEC") covering the issuance of the Shares to the Stockholders (the
"Registration Statement"). On the Closing Date, the issuance of the Shares to
the Stockholders will be registered under the Securities Act of 1933, as amended
(the "Act"). The Registration Statement will be effective on the Closing Date
and, to the best knowledge of American, there is no stop or cease and desist
order pending, threatened or in effect with respect to the Registration
Statement or qualification or any similar order of any applicable regulatory
authority pending, threatened or in effect.
7.6 Disclosure. The Prospectus, including the financial disclosure
contained therein, does not include an untrue statement of material fact or omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. There has been no
material adverse change in the business of American, taken as a whole, since the
date of the Prospectus.
7.7 Investigation. American has conducted a due diligence review of the
Company and its assets, books and records. American has been provided access to
such records relating to the Company and its business and affairs as it has
requested both in writing and orally, together with such opportunity as American
has desired to interview employees, agents, and representatives of the Company.
Nothing in this Section 7.7 shall limit in any way the representations and
warranties of the Stockholders made in this Agreement.
7.8 Brokers and Finders. Neither American nor Newco nor any of their
respective officers, directors or employees has employed any broker, agent or
finder or incurred any
-16-
liability for any brokerage fees, commissions or finders' fees for the Merger or
any other transactions contemplated by the Agreement or otherwise.
8. COVENANTS OF STOCKHOLDERS AND THE COMPANY PRIOR TO CLOSING.
8.1 Access and Cooperation. During the period from the date hereof through
the Closing Date, the Company will afford to the officers and authorized
representatives of American access to all of the Company's sites, properties,
books and records and will furnish American with such additional financial and
operating data and other information as to the business and properties of the
Company as American may from time to time reasonably request. The Company will
cooperate with American, its representatives, engineers, auditors and counsel in
the preparation of any documents or other material which may be required in
connection with any documents or materials required by any governmental agency.
8.2 Conduct of Business Pending Closing. During the period from the date
hereof through the Closing Date, the Company shall, and the Stockholders will
cause the Company to:
(a) carry on its business in substantially the same manner as it has
heretofore and not introduce any material new method of management,
operation or accounting;
(b) maintain its properties, facilities and equipment, including those
held under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
(c) perform all of its material obligations under agreements relating
to or affecting its respective assets, properties, equipment or rights;
(d) keep in full force and effect present insurance policies or other
comparable insurance coverage with comparable insurers;
(e) use its reasonable efforts to maintain and preserve its business
organization intact, retain its present employees and maintain its
relationships with suppliers, customers and others having business
relations with the Company;
(f) use its reasonable efforts to maintain compliance with all
permits, laws, rules and regulations, consent orders, and similar
requirements;
(g) maintain present debt and lease instruments and not enter into new
or amended debt or lease instruments, without the knowledge and consent of
American; and
(h) maintain present salaries and commission levels for all officers,
directors, employees and agents, except that the Company may increase
salaries of employees (other than the Stockholders) in accordance with
merit reviews and consistent with past practices.
8.3 Prohibited Activities. The Company will not, without prior written
consent of American:
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(a) make any change in its Articles of Incorporation or Bylaws;
(b) effect any change in the capital structure of the Company,
including without limitation, the issuance of any securities, options,
warrants, calls, conversion rights or commitments relating to its
securities of any kind;
(c) declare or pay any dividend, or make any other distribution in
respect of its stock, except that (i) the Company may declare and pay
dividends to the Stockholders, as of December 31, 1992, in an aggregate
amount not to exceed $175,000 and (ii) the Company may declare and pay, as
of December 31, 1992, the dividends described in Section 10.12;
(d) purchase, redeem or otherwise acquire or retire for value any
shares of its stock or other securities;
(e) enter into any contract or commitment or incur or agree to incur
any liability except in the normal course of business or make any capital
expenditures in excess of $10,000 except that the Company may make the
capital expenditures described on Schedule 8.3(e) hereto;
(f) increase the compensation payable or to become payable to any
officer, director, the Stockholders, employee or agent, or pay any bonus or
management fee to any such person, except that the Company may (i) increase
salaries of employees (other than the Stockholders) in accordance with
merit reviews and consistent with past practices ands (ii) pay a bonus to
Trace Skeen with respect to the fiscal year ended December 31, 1992, in an
aggregate amount not to exceed $50,000;
(g) create, assume or permit to exist any mortgage, pledge or other
lien or encumbrance (other than mechanics' liens and similar non-material
liens arising in the ordinary course of business) upon any assets or
properties whether now owned or hereafter acquired, except as set forth in
Schedule 8.3(g);
(h) except as provided by Schedule 8.3(h) and in Section 10.12, sell,
assign, lease or otherwise transfer or dispose of any property or equipment
except in the normal course of business;
(i) make any contribution pursuant to the Company's employee benefit
plans other than mandatory employer contributions;
(j) negotiate for the acquisition of any business or the start-up of
any new business or project;
(k) merge or consolidate or agree to merge or consolidate with or into
any other corporation;
(l) waive any material rights or claims of the Company;
-18-
(m) knowingly breach or permit a breach of, or amend or terminate any
material agreement or any permit, license or other right of the Company; or
(n) enter into any other transaction outside the ordinary course of
its business or prohibited hereunder.
8.4 Notice to Bargaining Agents. Prior to the Closing Date, the Company
shall satisfy any requirement for notice of the transactions contemplated by
this Agreement under applicable collective bargaining agreements, and shall
provide American with proof that any required notice has been sent.
8.5 No Shop. None of the Stockholders, the Company or any agent, officer,
director or any representative of any of the foregoing will, during the period
commencing on the date of this Agreement and ending with the earlier to occur of
the Closing or January 31, 1993, directly or indirectly:
(a) solicit or initiate the submission of proposals or offers from any
person for,
(b) participate in any discussions pertaining to or
(c) furnish any information to any person other than American or Newco
relating to,
any acquisition or purchase of all or a material amount of the assets of, or any
equity interest in, the Company or a merger, consolidation or business
combination of the Company.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDERS.
The obligations of the Stockholders to consummate the Merger are subject to
the fulfillment, prior to the Effective Time of each of the following
conditions, any of which may be waived by the Stockholders. Upon consummation of
the Merger, all of such conditions not satisfied shall be deemed to be waived.
9.1 Representations and Warranties; Performance of Obligations. The
representations and warranties of American and Newco contained in Section 7
shall be true and correct on and as of the Closing Date with the same force and
effect as though made on and as of such date; all of the terms, covenants and
conditions of this Agreement to be complied with, performed and satisfied by
American and Newco on or before the Closing Date shall have been complied with,
performed and satisfied; and a certificate to the foregoing effect dated the
Closing Date and signed by a duly authorized officer of American shall have been
delivered to the Stockholders.
9.2 Proceedings Satisfactory. All actions, proceedings, instruments and
documents required to carry out this Agreement or incidental hereto and all
other related legal matters shall be reasonably satisfactory to the Stockholders
and their counsel.
9.3 No Litigation. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger or the
-19-
consummation of the other transactions contemplated hereby, and no governmental
agency or body shall have taken any other action or made any request of the
Company as a result of which the management of the Company deems it inadvisable
to proceed with the transactions hereunder.
9.4 Escrow Agreement. American and First Interstate Bank Oregon, N.A. shall
have executed and delivered to the Stockholders an Escrow Agreement in
substantially the form of Annex II hereto (the "Escrow Agreement").
9.5 Employment Agreement. American and the Company shall have executed and
delivered to Michael T. Marsh an Employment Agreement in substantially the form
of Annex III-A hereto.
9.6 Consulting Agreement. American and the Company shall have executed and
delivered to Dennis H. Marsh a Consulting Agreement in substantially the form of
Annex IV hereto.
9.7 Opinion of Counsel. The Stockholders shall have received an opinion
from counsel for American, dated the Closing Date, in form and substance
satisfactory to the Stockholders, to the effect that:
(a) American is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware;
(b) this Agreement has been duly authorized, executed and delivered by
each of American and Newco and constitutes a valid and binding agreement of
each of American and Newco enforceable against American and Newco in
accordance with its terms subject to (i) bankruptcy, moratorium,
insolvency, reorganization, arrangement and other similar laws relating to
or affecting the rights and remedies of creditors and (ii) general
principles of equity, regardless of whether applied in proceeding in equity
or at law, except that no opinion need be expressed as to the second
sentence of Section 11.1 or as to the enforceability of the provisions of
Section 16.2 relating to indemnification; and
(c) the Shares are duly authorized and, when issued pursuant to
Section 3.2, will be validly issued, fully paid and nonassessable.
9.8 Environmental Reports. The environmental audit reports with respect to
the Properties (as defined in Section 10.11) shall be satisfactory to Dennis H.
Marsh.
10. CONDITIONS TO OBLIGATIONS OF AMERICAN AND NEWCO.
The obligations of American and Newco to consummate the Merger are subject
to the fulfillment, prior to the Effective Time of each of the following
conditions, any of which may be waived by American and Newco. Upon consummation
of the Merger, all of such conditions not satisfied shall be deemed to be
waived.
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10.1 Representations and Warranties; Performance of Obligations. The
representations and warranties of the Stockholders contained in Section 6 shall
be true and correct on and as of the Closing Date with the same force and effect
as though made on and as of such date; all of the terms, covenants and
conditions of this Agreement to be complied with, performed and satisfied by the
Company or the Stockholders on or before the Closing Date shall have been
complied with, performed and satisfied; and a certificate to the foregoing
effect dated the Closing Date and signed by each of the Stockholders shall have
been delivered to American.
10.2 Proceedings Satisfactory. All actions, proceedings, instruments and
documents required to carry out this Agreement or incidental hereto and all
other related legal matters shall be reasonably satisfactory to American and its
counsel.
10.3 No Litigation. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Merger or the other transactions contemplated by this Agreement
and no governmental agency or body shall have taken any other action or made any
request of American as a result of which the management of American deems it
inadvisable to proceed with the transactions hereunder.
10.4 Examination of Financial Statements. Prior to the Closing Date,
American's independent public accountants shall have completed an audit of the
Company's financial statements for the fiscal year ended December 31, 1991, and
a review of the Company's financial statements for the ten-month period ended
October 31, 199_ the results of which are satisfactory to American, in its sole
discretion.
10.5 No Material Adverse Change. No material adverse change in the results
of operations, financial condition or business of the Company shall have
occurred, and the Company shall not have suffered any material loss or damages
to any of its properties or assets, whether or not covered by insurance, since
the Balance Sheet Date, which change, loss or damage materially affects or
impairs the ability of the Company to conduct its business; and American shall
have received a certificate signed by the Stockholders dated the Closing Date to
such effect.
10.6 Due Diligence. American shall have completed and shall be satisfied
with, its due diligence review of the business, operations, assets, prospects
and condition, financial and otherwise, of the Company.
10.7 Stockholders Release. Each of the Stockholders shall have delivered to
American an instrument dated the Closing Date, in form and substance
satisfactory to American, releasing the Company from any and all claims of the
Stockholders against the Company.
10.8 Escrow Agreement. The Escrow Agreement shall have executed and
delivered to American by each of the Stockholders and First Interstate Bank
Oregon, N.A.
10.9 Employment Agreements. Michael T. Marsh and Trace Skeen shall have
executed and delivered to American and the Company Employment Agreements in
substantially the forms of Annexes III-A and III-B hereto, respectively.
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10.10 Consulting Agreement. Dennis H. Marsh shall have executed and
delivered to American and the Company a Consulting Agreement in substantially
the form of Annex IV hereto.
10.11 Environmental Reports. Dennis H. Marsh shall have furnished to
American environmental audit reports with respect to the properties listed on
Schedule 10.11 (the "Properties") in form and substance satisfactory to
American.
10.12 Durable Medical Division. The Company shall have declared and paid to
the Stockholders a cash dividend in the aggregate amount of $200,000, which will
be paid to the Company as a down payment of the purchase price for the purchase
of assets of the Company's Durable Medical Division, as described in this
Section 10.12. Marsh Medical Services, Inc., shall have, in compliance with all
applicable laws, purchased from the Company the assets and assumed the
liabilities of the Company's Durable Medical Division described on Schedule
10.12 at a purchase price equal to the amount shown on Schedule 10.12 as the
"Net assets withdrawn." The net worth of the Company as a result of such
transactions shall not have been reduced by more than $200,000. American shall
have received a certificate to these effects dated the Closing Date signed by
each of the Stockholders.
10.13 Related Transactions. All existing leases, agreements and
arrangements between the Company and any Stockholder or any affiliate of a
Stockholder shall either have been canceled or the terms thereof shall have been
renegotiated on a basis no less favorable to the Company than would be the case
if such transaction had been effected with an unrelated third-party.
10.14 Opinion of Counsel. American shall have received an opinion from
Miller, Nash, Wiener, Hager & Carlsen, counsel to the Stockholders, dated the
Closing Date, in form and substance satisfactory to American.
10.15 Consents and Approvals. All necessary consents of, and filings with,
any governmental authority or agency and any other person or entity relating to
the consummation of the Merger and the transactions contemplated hereby shall
have been obtained and made.
10.16 Additional Liabilities and Obligations. The Stockholders shall have
delivered to American a schedule, dated the Closing Date, updating the
information on Schedule 6.10 as of the Closing Date.
10.17 Additional Contracts. The Stockholders shall have delivered to
American a schedule, dated the Closing Date, showing all material contracts and
agreements of the type required to be set forth on Schedule 6.14, together with
copies thereof, entered into by Company since the date of Schedule 6.14.
10.18 Repayment of Indebtedness. Prior to the Closing Date, the
Stockholders shall have repaid the Company in full all amounts owing to the
Company by them.
10.19 Documents Relating to Termination of S Corporation Status. The
Stockholders shall have delivered to American the documents described in Section
6.22(a) relating to the
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termination of the Company's status as an S corporation in proper form for
filing with appropriate federal tax authorities.
11. COVENANTS AFTER CLOSING.
11.1 Release from Guarantees. After the Closing, American shall use its
reasonable efforts to have Dennis H. Marsh and Gwen Marsh released from the
personal guarantees specified on Schedule 11.1 of indebtedness of the Company.
In the event that American cannot obtain a release for any such guarantee within
the 120 day period following the Closing, American shall pay off or otherwise
refinance or retire the indebtedness related to such guarantee and, with respect
to each month (or portion thereof) after such 120-day period until such
guarantee is released or such indebtedness is repaid, shall pay Dennis H. Marsh
a monthly guarantor's fee at the rate of 1.5% of the average daily balance of
such indebtedness outstanding during the preceding month. Such fee shall be paid
on the first day of each month and shall be prorated for partial months.
11.2 Payment of Taxes. The Stockholders shall pay by April 15, 1993, and
shall at all times indemnify and hold American and the Surviving Corporation
harmless with respect to, all income tax liabilities (including penalties and
interest) resulting from the termination of the Company's status as an S
corporation and from the Company's use of the cash method of accounting for tax
purposes and from the Company's change from the cash method of accounting for
income tax purposes to the accrual method of accounting for income tax purposes.
11.3 Filing Final Tax Return. American shall cause the Surviving Company to
file an accurate and complete final S corporation tax return for the Company as
of December 31, 1992.
12. INDEMNIFICATION.
The provisions of this Agreement relating to the parties' indemnification
obligations with respect to certain matters are set forth in Exhibit 12 hereto,
which is incorporated by reference herein as if fully set forth herein.
13. TERMINATION OF AGREEMENT.
13.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time:
(a) by mutual consent of the parties hereto;
(b) by the Stockholders and the Company or by American and Newco if
the Closing shall not have been consummated on or prior to January 31,
1993, or such later date, if any, as American and the Stockholders may
agree upon writing; and
(c) by the Stockholders and the Company, on the one hand or by
American and Newco, on the other hand, in the event of a material breach or
default by the other parties hereto of any provision of this Agreement and,
in the case of a breach or default that is capable of being cured,
continuation of such breach or default for a period of 15
-23-
days (but not later than January 31, 1993) after written notice thereof
shall have been given to the breaching party.
13.2 Liabilities in Event of Termination. The termination of this Agreement
will in no way limit any obligation or liability of any party based on or
arising from a breach or default by such party with respect to any of his or its
representations, warranties, covenants or agreements contained in this
Agreement. The provision of this Section 13 and of Sections 8.5, 15 and 17.5
shall survive the termination of this Agreement.
14. NONCOMPETITION.
14.1 Prohibited Activities. The Stockholders agree that they shall not:
(i) for the period of five years following the Closing Date in the
case of Dennis H. Marsh and the period of three years following the Closing
Date in the case of Michael T. Marsh, establish, enter into, be employed by
or for, advise, consult with or become an owner in part of, any company,
partnership, corporation or other entity or venture that engages in the
business of, or in any way engage in the business (for himself or others
whether as an officer, director, shareholder, owner, partner, joint
venturer, employee, independent contractor, consultant, advisor or
representative), of providing ambulance services or pre-hospital care and
medical or handicapped transportation, (A) in the case of Dennis H. Marsh,
within 100 miles of any location in which the Company, American or any of
their respective subsidiaries conducts business as of the Closing Date or
(B) in the case of Michael T. Marsh, within 100 miles of any location in
which the Company (or any subsidiary of the Company) or any other
subsidiary of American for which he has served as an employee or provided
significant on-site services conducts or has conducted business. (For
purposes of this Article 14 the geographic region that applies to Dennis H.
Marsh and Michael T. Marsh, as the case may be, is referred to as the
"Territory");
(ii) for a period of five years following the Closing Date in the case
of Dennis H. Marsh and the period of three years following the Closing Date
in the case of Michael T. Marsh, call upon any person who is, at that time,
employed by American or the Surviving Corporation, or any of their
respective subsidiaries for the purpose or with the intent of enticing such
employee away from or out of the employ of American or the Company or any
of their respective subsidiaries;
(iii) for a period of five years following the Closing Date in the
case of Dennis H. Marsh and the period of three years following the Closing
Date in the case of Michael T. Marsh, call upon any person or entity which
is, at that time, or which has been, within one year prior to that time, a
customer of American, the Company or the Surviving Corporation or any of
their respective subsidiaries within the Territory for the purpose of
soliciting or selling medical transportation services;
(iv) for a period of five years following the Closing Date in the case
of Dennis H. Marsh and the period of three years following the Closing Date
in the case of Michael T. Marsh, call upon any prospective acquisition
candidate, on their own behalf or on
-24-
behalf of any competitor, which candidate was either called upon by any
Stockholder or for which any Stockholder made an acquisition analysis for
himself or for American or the Company; or
(v) for a period of five years following the Closing Date in the case
of Dennis H. Marsh and the period of three years following the Closing Date
in the case of Michael T. Marsh, disclose the Surviving Corporation's
customers, whether in existence or proposed, to any person, firm,
partnership, corporation or business for any reason or purpose whatsoever
unless otherwise publicly known through no fault of either Stockholder.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit the Stockholders from acquiring as an investment not more than one
percent of the capital stock of a competing business, whose stock is traded on a
national securities exchange or over-the-counter.
14.2 Damages. Because of the difficulty of measuring economic losses to
American and the Company as a result of the breach of the foregoing covenant,
and because of the immediate and irreparable damage that would be caused to
American and the Company for which they would have no other adequate remedy, the
Stockholders agree that, in the event of a breach by them of the foregoing
covenant, the covenant may be enforced by American or the Company by injunctions
and restraining orders.
14.3 Reasonable Restraint. It is agreed by the parties that the foregoing
covenants in this Section 14 impose a reasonable restraint on the Stockholders
in light of the activities and business of the Company on the date of the
execution of this Agreement and the future plans of the Company.
14.4 Severability; Reformation. The covenants in this Section 14 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the intention of
the parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed.
14.5 Independent Covenant. All of the covenants in this Section 14 shall be
construed as an agreement independent of any other provision of this Agreement,
and the existence of any claim or cause of action of the Stockholders against
the Company or American, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by American or the Company of
such covenants. It is specifically agreed that the period of five years stated
above, shall be computed by excluding from such computation any time during
which the Stockholders are in violation of any provision of this Section 14 and
any time during which there is pending in any court of competent jurisdiction
any action (including any appeal from any judgment) brought by any person,
whether or not a party to this Agreement, in which action American or the
Company seeks to enforce the agreements and covenants of the Stockholders or in
which any person contests the validity of such agreements and covenants or their
enforceability or seeks to avoid their performance or enforcement.
-25-
14.6 Materiality. The Stockholders acknowledge and agree that the covenants
set forth in this Section 14 are a material and substantial part of this
transaction.
15. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
15.1 Stockholders. The Stockholders recognise and acknowledge that they had
in the past, currently have, and in the future may possibly have, access to (a)
certain confidential information of the Company, such as lists of customers,
operational policies, and pricing and cost policies that are valuable, special
and unique assets of the Company, and (b) certain confidential information about
American and its subsidiaries. The Stockholders agree that they will not use
such confidential information for their own benefit or disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except to authorized
representatives of American, unless such information becomes known to the public
generally through no fault of the Stockholders or unless such Stockholders are
required by law to disclose such information. If the Stockholders are requested
to provide such information pursuant to requirements of applicable law, they
shall notify American as promptly as possible and shall allow American the
opportunity to oppose such request. In the event of a breach or threatened
breach by the Stockholders of the provisions of this Section, American and the
Company shall be entitled to an injunction restraining the Stockholders from
disclosing, in whole or in part, such confidential information. Nothing herein
shall be construed as prohibiting American and the Company from pursuing any
other available remedy for such breach or threatened breach, including the
recovery of damages.
15.2 American. American recognizes and acknowledges that it has in the
past, currently has, and prior to the Closing Date will have, access to certain
confidential information of the Company, such as lists of customers, operational
policies, pricing and cost policies that are valuable, special and unique assets
of the Company. This confidential information has been provided to American and
its representatives for the purpose of evaluation the transactions contemplated
by this Agreement. American agrees that without the prior written consent of the
Stockholders prior to the Closing and following any termination of this
Agreement, it will not use such confidential information other than for the
purposes for which it has been provided and will not disclose such confidential
information to any person, firm, corporation, association, or other entity for
any purpose or reason whatsoever, unless such information becomes known to the
public generally through no fault of American or unless American is required by
law or the requirements of the New York Stock Exchange to disclose such
information. In the event that American is required to provide such information
pursuant to the requirements of applicable law (other than disclosure
requirements) it shall notify Dennis H. Marsh, acting on behalf of the Company
and the Stockholders, as promptly as possible and shall allow Dennis H. Marsh,
acting on behalf of the Company and the Stockholders, the opportunity to oppose
such request. In the event of a breach or threatened breach by American of the
provisions of this Section, the Stockholders shall be entitled to an injunction
restraining American from disclosing, in whole or in part, such confidential
information. Nothing contained herein shill be construed as prohibiting the
Stockholders from pursuing any other available remedy for such breach or
threatened breach, including the recovery of damages.
15.3 Damages. Because of the difficulty of measuring economic losses as a
result of the breach of the foregoing covenants, and because of the immediate
and irreparable damage that
-26-
would be caused for which they would have no other adequate remedy, American,
Newco, the Company and the Stockholders agree that, in the event of a breach by
any of them of the foregoing covenant, the covenant may be enforced against them
by injunctions and restraining orders.
16. FEDERAL SECURITIES ACT AND RESTRICTIONS ON THE SHARES.
The Stockholders acknowledge that the Shares will not be registered for
resale under the Act or under any state securities laws and may not be resold or
otherwise transferred except pursuant to an effective registration, statement
under the Act or in accordance with Rule 145 promulgated thereunder and in
accordance with applicable state securities laws. The certificates evidencing
the Shares will bear the following legend:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED FOR RESALE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER APPLICABLE STATE SECURITIES
LAWS AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IF THE HOLDER HEREOF
REPRESENTS IN WRITING TO AMERICAN MEDICAL RESPONSE, INC. THAT HE AGREES TO
COMPLY WITH RESALE LIMITATIONS UNDER APPLICABLE SECURITIES LAWS WITH
RESPECT TO SUCH TRANSFERS.
In connection with any request by a Stockholder to remove the legend above
with respect to any Shares for sale pursuant to Rule 145, such Stockholder shall
deliver to American a representation letter with respect to such Shares in the
form of Annex V attached hereto properly executed by such Stockholder. American
shall instruct its transfer agent to remove such legend with respect to such
Shares promptly after receipt by American of such letter.
16.1 Sophistication. The Stockholders represent and warrant to, and
covenant with, American as follows:
(a) the Stockholders have been provided as much time and opportunity
as they deemed appropriate to review and study the Prospectus and to
consult with American regarding the merits and risks of the transactions
contemplated by this Agreement;
(b) the Stockholders have each had adequate opportunity to ask
questions of and receive answers from the officers of American. concerning
any and all matters pertaining to the transactions referred to in the
Prospectus which they deemed appropriate, including, without limitation,
the background and experience of such officers and the Board of Directors
of American and the current conduct and status of and prospects of
American's business;
(c) the Stockholders have each in fact asked of American's officers
any and all questions of the nature described in clause (b) above which
they have desired to ask, and all such questions have been answered to the
satisfaction of the Stockholders;
-27-
(d) the Stockholders are the true parties in interest and are not
acquiring any of the Shares for the benefit of any other person or entity;
(e) the Shares are being acquired by each Stockholder for his own
account for investment and is not being acquired with a view to the resale,
redistribution, subdivision or fractionalization thereof in violation of
applicable law;
(f) each Stockholder has such knowledge and experience in financial
and business matters and investments in general that he is capable of
evaluating the merits and risks of the ownership of the Shares;
(g) each Stockholder understands that the Shares that he will receive
cannot be readily sold without compliance applicable state and federal
securities laws; and
(h) each Stockholder will deliver to American notice any intention to
resell any Shares in order to afford American the opportunity to advise
such Stockholders with respect to applicable procedural requirements.
16.2 Registration Rights.
(a) During the three month period following the Closing Date, Dennis
H. Marsh may, by written notice furnished to American, request that
American register for his account under the Act all or a specified portion
of the Shares held by him. After receipt of such written notice, American
shall use its reasonable efforts to prepare and file a registration
statement with respect to such Shares with the SEC and cause such
registration statement to become effective within the 90 day period
following American's receipt of such notice and to use its reasonable
efforts to cause such registration statement to remain effective for a
period of at least 60 days (or such shorter period during which Dennis H.
Marsh shall have sold all Shares which he requested to be registered) and
shall use its best efforts to register and qualify the Shares covered by
such registration statement under applicable state securities laws as
Dennis H. Marsh shall reasonably request for the distribution of such
Shares.
(b) In connection with such registration, Dennis H. Marsh shall
furnish to American such information regarding him and the distribution of
Shares held by him as American may from time to time request, and Dennis H.
Marsh agrees to indemnify and hold harmless American, its directors,
officers and any person who controls American within the meaning of Section
15 of the Act against any and all losses, claims, damages and liabilities
(or action in respect thereof) relate to statements or omissions made in
such registration statement, any prospectus included therein, or amendments
to such registration statement or any such prospectus, in reliance upon
such information provided by Dennis H. Marsh and agrees to reimburse each
such person for any reasonable legal or other expenses incurred by such
person in connection with investigating or defending any such loss, claim,
damage, liability or action. This indemnity agreement will be in addition
to any liability that Dennis H. Marsh may otherwise have.
(c) American agrees to indemnity and hold harmless Dennis H. Marsh
against any and all losses, claims, damages, and liabilities to which
Dennis H. Marsh may
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become subject under the Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Shares, or in the prospectus included therein, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse Dennis H. Marsh, for any reasonable
legal or other expense incurred by him in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that American will not be liable in any such case to the extent
that any such loss, claim, damage, or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
information furnished to American by or on behalf of Dennis H. Marsh for
use in connection with the preparation thereof. This indemnity agreement
will be in addition to any liability that American may otherwise have.
American also agrees, in the case of an underwritten public offering
effected pursuant to this Section 16.2, to provide customary
indemnification to the underwriters of such offering.
(d) All expenses incurred in connection with registration pursuant to
Section 16.2(a), including without limitation, registration and filing
fees, printing costs, and legal fees and expenses of Dennis H. Marsh (but
excluding underwriting discounts and commissions), shall be borne by
American; provided, however, that American shall not be required to pay
more than an aggregate of $1,250 of such legal fees.
16.3 Availability of Rule 145. American shall not be obligated to register,
or to keep a registration statement in effect pursuant to Section 16.2 with
respect to, Shares held by Dennis H. Marsh at any time when the aggregate number
of Shares then held by him is not more than the number of Shares that may be
sold by him at the time within the volume limitations of Rule 145 relating
solely to the number of Shares outstanding promulgated under the Act.
17. GENERAL.
17.1 Cooperation. The Stockholders and American shall each deliver or cause
to be delivered to the other on the Closing Date, and at such other times and
places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of consummating the transactions
contemplated by this Agreement. The Stockholders will cooperate and use their
reasonable efforts to have the present officers, directors and employees of the
Company cooperate with American and the Surviving Corporation on and after the
Closing Date in furnishing information, evidence, testimony and other assistance
in connection with any actions, proceedings, arrangements or disputes of any
nature with respect to matters pertaining to all periods prior to the Closing
Date.
17.2 Successors and Assigns. This Agreement and the rights of the parties
hereunder may not be assigned (except by operation of law) and shall be binding
upon and shall inure to the benefit of the parties hereto, their successors and
permitted assigns of American, and the heirs and legal representatives of the
Stockholders.
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17.3 Entire Agreement. This Agreement (including the schedules and annexes
attached hereto) and the documents and instruments delivered pursuant hereto
constitute the entire agreement and understanding between the Stockholders, the
Company, American and Newco and supersede any prior agreement and understanding
relating to the subject matter of this Agreement. This Agreement may be modified
or amended only by a written instrument executed by the Stockholders and on
behalf of the Company, American, and Newco by their respective duly authorized
officers.
17.4 Counterparts. This Agreement may be executed in any number of
counterparts which together shall constitute one instrument.
17.5 Expenses.
(a) American will (i) pay the fees and expenses of its independent
public accountants for their audit and review referred to in Section 10.4,
if the Merger is consummated and such audit and review does no disclose a
material adverse change in either the amount of stockholders' equity or the
amount of operating income of the Company from that reflected on the
financial statements furnished by the Company to American (other than
changes previously disclosed to American in writing) and (ii) pay the other
fees, expenses and disbursements of American and Newco and their agents,
representatives, accountants and counsel incurred in connection with the
subject matter of this Agreement and any amendments hereto, whether or not
the Merger is consummated. For purposes of clause (i) of this Section 17.5,
the term "material" means, with respect to an adverse change, an adverse
change of $100,000 or more.
(b) If the Merger is consummated, (i) the Company will pay all of the
fees, expenses and disbursements of the Company and the Stockholders and
their respective agents, representatives, accountants and counsel incurred
on or before November 19, 1992, in connection with the subject matter of
this Agreement and all of the legal and accounting costs incurred by the
Company in the ordinary course of business and (ii) the Stockholders will
pay the fees, expenses and disbursements of the Company and the
Stockholders and their respective agents, representatives, accountants and
counsel incurred after November 19, 1992, in connection with the subject
matter of this Agreement and any amendments hereto and all other costs and
expenses incurred in the performance and compliance with all conditions to
be performed by the Stockholders and the Company under this Agreement,
including the cost of the environmental audits referred to in Section
10.11. If the Merger is not consummated, the fees and expenses described in
the first sentence of this Section 17.5(b) shall be borne by the Company or
the Stockholders, as they may determine. Whether or not the Merger is
consummated, the Stockholders will pay the fees and expenses of American's
independent public accountants for their audit and review referred to in
Section 10.4 if American is not required to pay such fees and expenses
pursuant to clause (a)(i) of this Section 17.5.
17.6 Notices. All notices of communication required or permitted hereunder
shall be in writing. Any notice, demand or other communication given under this
Agreement shall be deemed to be given if given in writing (including telex,
telecopy or similar transmission) addressed as provided below (or at such other
address as the
-30-
addressee shall have specified by notice actually received by the addressor) and
if either (a) actually delivered in fully legible for, to such address
(evidenced in the case of a telex by receipt of the correct answerback) or (b)
in the case of a letter, five days shall have elapsed after the same shall have
been deposited in the United States mails, with first-class postage prepaid and
registered or certified.
If to American or Newco, addressed to them at:
67 Batterymarch Street
Suite 300
Boston, Massachusetts 02110
Attention: President
with a copy to:
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
Attention: Keith F. Higgins, Esq.
If to the Stockholders, addressed to them at:
Dennis H. Marsh
1270 High Street
Gladstone, Oregon 97027-1619
Michael T. Marsh
980 Cornell Avenue
Gladstone, Oregon 97027-1619
with a copy to:
Miller, Nash Wiener, Hager & Carlsen
111 S.W. Fifth Avenue
Portland, Oregon 97204-3699
Attention: J. Franklin Cable, Esq.
17.7 Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Oregon.
17.8 Survival of Representation and Warranties. The representations,
warranties, covenants and agreements of the parties made herein and at the time
of the Closing or in writing delivered pursuant to the provisions of this
Agreement shall survive the consummation of the transactions contemplated hereby
for such periods as are specified in Exhibit 12 and any examination on behalf of
the parties.
17.9 Exercise of Rights and Remedies. Except as otherwise provided herein,
no delay of or omission in the exercise of any right, power or remedy accruing
to any
-31-
party as a result of any breach or default by any other party under this
Agreement shall impair any such right, power or remedy, nor shall it be
construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
17.10 Time. Time is of the essence of this Agreement.
17.11 Reformation and Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as to most
nearly retain the intent of the parties, and if such modification is not
possible, such provision shall be severed from this Agreement, and in either
case the validity, legality and enforceability of the remaining provisions of
this Agreement shall not in any way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AMERICAN MEDICAL RESPONSE, INC.
By: /s/ x
------------------------------------
Title: President
BMS ACQUISITION, INC.
By: /s/ x
------------------------------------
Title: Vice President
BUCK MEDICAL SERVICES, INC.
By: /s/ x
------------------------------------
Title: President
Stockholders of Buck Medical Services,
Inc.
/s/ Dennis H. Marsh
----------------------------------------
Dennis H. Marsh
/s/ Michael T. Marsh
----------------------------------------
Michael T. Marsh
LIST OF ANNEXES AND SCHEDULES
Annex No. Description
- --------- -----------
Annex I Articles of Merger
Annex II Form of Escrow Agreement
Annex III-A Form of Employment Agreement for Michael T. Marsh
Annex III-B Form of Employment Agreement for Trace Skeen
Annex IV Form of Consulting Agreement
Annex V Form of Representation Letter
Schedule No. Description
Schedule 3.1(c) Merger Consideration
Schedule 6.1 Certified Copies of Articles of Incorporation and By-laws of
the Company
Schedule 6.3 Consents
Schedule 6.4 Ownership of Company Stock
Schedule 6.5 Transactions in Capital Stock
Schedule 6.7 Equity Interests
Schedule 6.8 Predecessor Status, etc.
Schedule 6.9 Financial Statements
Schedule 6.10 Liabilities and Obligations
Schedule 6.11 Accounts and Notes Receivable
Schedule 6.12 Permits and Intangibles
Schedule 6.13 Real and Personal Property
Schedule 6.14 Material Contracts and Commitments
Schedule 6.15 Labor Matters
Schedule 6.17(a) Insurance
Schedule 6.17(b) Certain Exceptions
Schedule 6.18 Compensation
Schedule 6.19 Employee Benefit Plans
Schedule 6.22 Taxes
Schedule 6.24 Governmental Contracts
Schedule 6.25 Absence of Changes
Schedule 6.26 Deposit Accounts; Powers of Attorney
Schedule 6.27 Environmental Matters
Schedule 6.28 Underground Storage Tanks
Schedule 8.3(e) Permitted Capital Expenditures
Schedule 8.3(g) Permitted Liens
Schedule 8.3(h) Permitted Dispositions of Property
Schedule 10.11 Specified Leased Properties
Schedule 10.12 Assets and Liabilities of Durable Medical Division
Schedule 10.1 Specified Personal Guarantees
Exhibit Description
- ------- -----------
Exhibit 12 Certain Indemnification Obligations
Schedule 3.1(c)
Merger Consideration
Value of American
Common Stock Cash Escrow
----------------- ---------- --------
Dennis H. Marsh $2,165,000 $4,650,000 $725,000
Michael T. Marsh 135,000 100,000 25,000
---------- ---------- --------
TOTAL $2,300,000 $4,750,000 $750,000
========== ========== ========
THIS SPACE FOR OFFICE USE
Submit the original Corporation Division - Business Registry and one true copy
$10.00
Survivor's Registry Number:
083500-19
ARTICLES OF MERGER
Business and/or Nonprofit Corporations
PLEASE TYPE LEGIBLY IN BLACK INK
1. Names of the corporations proposing to merge:
A. Buck Medical Services, Inc.
B. A.A. Ambulance Service of Portland, Inc.
2. Name of the surviving corporation:
Buck Medical Services, Inc.
3. A copy of the plan of merger is attached.
4. Corporation A - check the appropriate statement:
[ ] Shareholder/membership was not required. The plan approved by a
sufficient vote of the board of directors.
[X] Shareholder/membership approval was required. The vote was as follows:
If Corporation A is Class(es) Number of shares Number of votes Number of votes Number of votes
a business entitled to vote outstanding entitled to be cast for cast against
corporation cast
Common 100 100 100 0
If Corporation A is Class(es) or Number of members Number of votes Number of votes Number of votes
a nonprofit series of shares entitled to votes entitled to be cast for cast against
corporation cast
Corporation B - check the appropriate statement:
[ ] Shareholder/membership was not required. The plan approved by a
sufficient vote of the board of directors.
[X] Shareholder/membership approval was required. The vote was as follows:
If Corporation B is Class(es) or Number of members Number of votes Number of votes Number of votes
a business series of shares entitled to vote entitled to be cast for cast against
corporation cast
Common 100 100 100 0
If Corporation B is Class(es) Number of shares Number of votes Number of votes Number of votes
a nonprofit entitled to vote outstanding entitled to be cast for cast against
corporation cast
Execution for
Corporation /s/ David Trace Skeen
Surviving --------------------- David Trace Skeen President
Corporation Signature Printed Name Title
Person to contact about this filing: Linda S. Day (617) 951-7459
Name Daytime phone number
MAKE CHECKS PAYABLE TO THE CORPORATION DIVISION.
(11/93)
PLAN OF MERGER
This Plan of Merger is made as of the 28 day of August, 1995 between Buck
Medical Services, Inc., an Oregon corporation ("Buck"), and A.A. Ambulance
Service of Portland, Inc., an Oregon corporation ("Merging Corporation"). Each
of Buck and Merging Corporation agrees as follows:
1. At the Effective Time (as defined in Section 5 below), Merging Corporation
shall be merged with and into Buck pursuant this Plan of Merger and the
provisions of the Oregon Business Corporation Act. The separate existence of
Merging Corporation shall cease upon effectiveness of the merger and thereupon
Merging Corporation and Buck shall be a single corporation (the "Surviving
Corporation").
2. All shares of stock of Merging Corporation shall be cancelled as of the
Effective Time. There shall be no distribution of cash to, or conversion of
shares of, Merging Corporation pursuant to this Plan of Merger. All shares of
Buck will be converted into an equal number of shares of the Surviving
Corporation.
3. The Articles of Incorporation of Buck as in effect immediately prior to the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation and shall continue in full force and effect until amended in the
manner prescribed by the Oregon Business Corporation Act.
4. The Board of Directors and the proper officers of Merging Corporation and
Buck, respectively, are authorized and directed to execute and deliver all
documents, papers and instruments and to take all such action necessary or
desirable to evidence or carry out the provisions of this Plan of Merger.
5. The merger shall take effect on September 1, 1995 (the "Effective Date").
6. The merger shall have the effect set forth in the Oregon Business Corporation
Act.
IN WITNESS WHEREOF the undersigned have executed this Plan of Merger this
28 day of August, 1995.
BUCK MEDICAL SERVICES, INC.
By: /s/ X
---------------------------------
President
A.A. AMBULANCE SERVICE OF PORTLAND, INC.
By: /s/ X
---------------------------------
President
THIS SPACE FOR OFFICE USE ONLY
Submit the original Corporation Division - Business Registry
and one true copy Public Service Building
$10.00 255 Capitol Street NE, Suite 151
Salem, OR 97310-1327
(503) 966-2200 Facsimile (503) 378-4361
Registry Number:
083500-19
ARTICLES OF AMENDMENT
By Incorporators, Directors or Shareholders
PLEASE TYPE OR PRINT LEGIBLY IN BLACK INK
1. Name of the corporation prior to amendment:
Buck Medical Services, Inc.
2. State the article number(s) and set forth the article(s) as it is amended
to read or attach a separate sheet.
Article I -- The name of the corporation shall be American Medical Response
Northwest, Inc.
3. The amendment(s) was adopted on February 1, 1996. (If more than one
amendment was adopted, identify the date of adoption of each amendment.)
4. Check the appropriate statement:
[X] Shareholder action was required to adopt the amendment(s). The vote
was as follows:
Class or series of Number of shares Number of votes Number of votes Number of votes
shares outstanding entitled to be cast cast for cast against
- ------------------ ---------------- ------------------- --------------- ---------------
Common 100 100 100
[ ] Shareholder action was not required to adopt the amendment(s). The
amendment(s) was adopted by the board of directors without shareholder
action.
[ ] The corporation has not issued any shares of stock. Shareholder action
was not required to adopt the amendment(s). The amendment(s) was
adopted by the incorporators or by the board of directors.
Execution: /s/ Mark V. Gregg
----------------- Mark V. Gregg, Vice President
Signature Printed Name Title
Person to contact about this filing: J. Terrence Bittner (503) 228-5626
Name Daytime phone number
MAKE CHECKS PAYABLE TO THE CORPORATION DIVISION OR INCLUDE YOUR VISA OR
MASTERCARD NUMBER AND EXPIRATION DATE _____-_____-_____-_____ ___/__. SUBMIT THE
COMPLETED FORM AND FEE TO THE ABOVE ADDRESS OR FAX TO (503) 378-4381.