-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JV5f+j1YmlNflVU/QYlZ+/V0iRpmXTnJaU7BjeIrzgf+nSTq1lFT/7clB21fnjor gd/26nXlVFC7t9P4o6HPCw== 0000930413-99-000716.txt : 19990608 0000930413-99-000716.hdr.sgml : 19990608 ACCESSION NUMBER: 0000930413-99-000716 CONFORMED SUBMISSION TYPE: SC 13E3 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19990607 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONCENTRA MANAGED CARE INC CENTRAL INDEX KEY: 0001038528 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 043363415 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3 SEC ACT: SEC FILE NUMBER: 005-52393 FILM NUMBER: 99641587 BUSINESS ADDRESS: STREET 1: 312 UNION WHARF CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6173672163 MAIL ADDRESS: STREET 1: 312 UNION WHARF CITY: BOSTON STATE: MA ZIP: 02109 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CONCENTRA MANAGED CARE INC CENTRAL INDEX KEY: 0001038528 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 043363415 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3 BUSINESS ADDRESS: STREET 1: 312 UNION WHARF CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6173672163 MAIL ADDRESS: STREET 1: 312 UNION WHARF CITY: BOSTON STATE: MA ZIP: 02109 SC 13E3 1 TRANSACTION STATEMENT ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13E-3 RULE 13E-3 TRANSACTION STATEMENT (Pursuant to Section 13(e) of the Securities Exchange Act of 1934) --------------- CONCENTRA MANAGED CARE, INC. (Name of the Issuer) Welsh, Carson, Anderson & Stowe, VIII, L.P. Yankee Acquisition Corp. John K. Carlyle W. Tom Fogarty, M.D. James M. Greenwood Thomas E. Kiraly Kenneth Loffredo Richard A. Parr II Daniel J. Thomas Concentra Managed Care, Inc. (Name of Person(s) Filing Statement) --------------- COMMON STOCK, PAR VALUE $.01 PER SHARE (Title of Class of Securities) --------------- 20589T103 (CUSIP Number of Class of Securities) - -------------------------------------------------------------------------------- Paul B. Queally Yankee Acquisition Corp c/o Welsh, Carson, Anderson & Stowe VIII, L.P. 320 Park Avenue New York, New York 10022 (212) 893-9500 - -------------------------------------------------------------------------------- Daniel J. Thomas Concentra Managed Care, Inc. 312 Union Wharf Boston, Massachusetts 02109 (617) 367-2163 - -------------------------------------------------------------------------------- WITH COPIES TO: - -------------------------------------------------------------------------------- Robert A. Schwed, Esq. Othon A. Prounis, Esq. Reboul, MacMurray, Hewitt, Maynard & Kristol 45 Rockefeller Plaza New York, New York 10111 (212) 841-5700 - -------------------------------------------------------------------------------- Richard A. Parr II Concentra Managed Care, Inc. 5080 Spectrum Drive Suite 400, West Tower Addison, Texas 75001 (800) 232-3550 - -------------------------------------------------------------------------------- Jeffrey A. Chapman, Esq. Vinson & Elkins L.L.P. 3700 Trammell Crow Center 2001 Ross Avenue Dallas, Texas 75201-2975 (214) 220-7795 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) This statement is filed in connection with (check the appropriate box): a. / X / The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities Exchange Act of 1934. b. / / The filing of a registration statement under the Securities Act of 1933. c. / / A tender offer. d. / / None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: /X/ CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- TRANSACTION VALUATION (1) AMOUNT OF FILING FEE - -------------------------------------------------------------------------------- $ 792,505,929.90 $ 158,501.19 - -------------------------------------------------------------------------------- /X/ Check box if any part of the fee is offset as provided by Rule 0-11(a) (2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount previously paid: $158,501.19 Form or registration no.: Schedule 14A - Preliminary Proxy Statement Filing Party: Concentra Managed Care, Inc. Dated filed: March 31, 1999 (1) For purposes of calculating the fee only. Assumes purchase of 47,294,074 shares of common stock, par value $.01 per share, of Concentra Managed Care, Inc. at $16.50 per share and the purchase of underlying options to purchase Common Stock for an aggregate of $12,153,708.90 ================================================================================ This Rule 13e-3 transaction statement relates to the Amended and Restated Agreement and Plan of Merger, dated as of March 24, 1999, by and among Concentra Managed Care, Inc., a Delaware corporation, and Yankee Acquisition Corp., a Delaware corporation, pursuant to which Yankee, currently a wholly-owned subsidiary of Welsh, Carson, Anderson & Stowe VIII, L.P. ("WCAS"), will be merged with and into Concentra, with Concentra surviving the merger. WCAS VIII Associates LLC, a Delaware limited liability company, is the sole general partner of WCAS. WCAS formed Yankee to consummate the merger. Concurrently with the filing of this statement, Concentra is filing with the Securities and Exchange Commission a preliminary proxy statement on Schedule 14A under the Securities and Exchange Act of 1934, as amended, relating to a special meeting of stockholders of Concentra. At such meeting, the stockholders of Concentra will vote upon a proposal to approve the merger agreement. A copy of the preliminary proxy statement is attached hereto as Exhibit (d)(3). A copy of the merger agreement is attached as Appendix A to the preliminary proxy statement. Upon the terms and subject to the conditions of the merger agreement, at the effective time of the merger: o Yankee will be merged with and into Concentra, with Concentra continuing as the surviving corporation. o Each outstanding share of common stock of Concentra will be converted into the right to receive $16.50 per share in cash, other than shares held by stockholders who are entitled to and have perfected their dissenters' appraisal rights. o Shares of Concentra common stock held by Concentra, its subsidiaries, and Yankee or its affiliates will be canceled in the merger. The effective time of the merger will be the date and time of the filing of articles of merger with the Secretary of State of the State of Delaware which is scheduled to occur as soon as practicable after satisfaction or waiver of the conditions to the merger that are specified in the merger agreement. It is anticipated that, if all conditions to the merger have been satisfied or waived, the effective time will occur on the date of the special meeting or as soon thereafter as practicable. The following cross reference sheet is supplied pursuant to General Instruction F to Schedule 13E-3 and shows the location in the preliminary proxy statement of the information required to be included in this statement by Schedule 13E-3. The information in the preliminary proxy statement, a copy of which is attached hereto as Exhibit (d)(3), is hereby expressly incorporated herein by reference and the responses to each item in this statement are qualified in their entirety by the information contained in the preliminary proxy statement. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the preliminary proxy statement. The preliminary proxy statement will be completed and, if appropriate, amended, prior to the time the definitive proxy statement is first sent or given to stockholders of Concentra. This statement will be amended as necessary to reflect the completion or amendment of the preliminary proxy statement. Pursuant to Rule 13e-3, Concentra is filing this statement as issuer of common stock which is the subject of this Rule 13e-3 transaction. The filing of this statement shall not be construed as an admission by Concentra, WCAS, Yankee or any of their affiliates, including Messrs. John K. Carlyle, Tom Fogarty, M.D., James M. Greenwood, Thomas E. Kiraly, Kenneth Loffredo, Richard A Parr II and Daniel J. Thomas, that Concentra is "controlled" by WCAS or that WCAS is an "affiliate" of Concentra within the meaning of Rule 13e-3 under Section 13(e) of the Securities Exchange Act of 1934, as amended. CROSS REFERENCE SHEET
- ----------------------------------------------------------------------------------------------------------------------------------- ITEM IN SCHEDULE 13E-3 CAPTION OR LOCATION IN THE PROXY STATEMENT - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 1(a) Cover Page, "Questions and Answers About the Merger" and "Summary--The Companies" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 1(b) Cover Page, "Summary--Record Date; Voting Power" and "The Special Meeting--Record Date and Quorum Requirement" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 1(c) - (d) "Summary--Historical Market Information" and "Purchases of Common Stock by Certain Persons" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 1(e) * - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 1(f) "Purchases of Common Stock by Certain Persons" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 2(a) - (d) and (g) "Summary--The Companies", "Principal Stockholders and Stock Ownership of Management and Others", "Certain Information Concerning Concentra" and "Certain Information Concerning Yankee" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 2(e) - (f) "Certain Information Concerning Concentra" and "Certain Information Concerning Yankee" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 3(a)(1) "Summary--Interests That Differ From Your Interests", "Special Factors--Background of the Merger" and "--Interests of Certain Persons in the Merger", and "Purchases of Common Stock By Certain Persons" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 3(a)(2) "Questions and Answers About the Merger", "Summary--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendations", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Merger--Certain Terms of the Merger Agreement", and "Purchases of Common Stock By Certain Persons" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 3(b) "Questions and Answers About the Merger", "Summary--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendations", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Merger--Certain Terms of the Merger - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- ITEM IN SCHEDULE 13E-3 CAPTION OR LOCATION IN THE PROXY STATEMENT - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Agreement", "Certain Information Concerning Yankee" and "Purchases of Common Stock By Certain Persons" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 4(a) "Questions and Answers about the Merger", "Summary--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "--Dissenters' Appraisal Rights", "Special Factors--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Special Meeting--Effective Time of the Merger and Payment for Shares", "The Merger--Certain Terms of the Merger Agreement", "Rights of Dissenting Stockholders" and Appendix A to the proxy statement - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 4(b) "Questions and Answers about the Merger", "Summary--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "--Appraisal Rights", "Special Factors--Background of the Merger", "--Certain Projections", "--The Special Committee's and the Board's Recommendation", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Merger--Certain Terms of the Merger Agreement", "Rights of Dissenting Shareholders" and Appendix A to the proxy statement - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 5(a) - (b) "Special Factors--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Certain Effects of the Merger", and "--Conduct of Concentra's Business After the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 5(c) "Summary--Interests That Differ From Your Interests", "Special Factors--Interests of Certain Persons in the Merger" and "--Conduct of Concentra's Business After the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 5(d) "Special Factors--Financing of the Merger", "Conduct of Concentra's Business After the Merger", and "The Merger--Certain Terms of the Merger Agreement" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 5(e) "Questions and Answers About the Merger", "Summary--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendations", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "--Conduct of Concentra's Business After the Merger", and "The Merger--Certain Terms of the Merger Agreement" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 5(f) - (g) "Questions and Answers About the Merger" and "Special Factors--Certain Effects of the Merger" - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- ITEM IN SCHEDULE 13E-3 CAPTION OR LOCATION IN THE PROXY STATEMENT - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 6(a) "Special Factors--Financing of the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 6(b) "The Merger--Estimated Fees and Expenses of the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 6(c) "Special Factors--Financing of the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 6(d) * - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 7(a) - (c) "Questions and Answers about the Merger", "Summary", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation" and "--Purpose and Reasons of WCAS and the Members of Management for the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 7(d) "Questions and Answers about the Merger", "Summary", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "--Conduct of Concentra's Business After the Merger", "Material Federal Income Tax Consequences", "The Merger--Terms of the Merger Agreement" and "--Estimated Fees and Expenses of the Merger" and "Rights of Dissenting Stockholders" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 8(a) "Questions and Answers about the Merger", "Summary-- Recommendations", "Special Factors--The Special Committee's and the Board's Recommendation", and "--Position of WCAS and the Members of Management as to Fairness of the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 8(b) "Questions and Answers about the Merger", "Summary--Recommendations", "--Opinion of Concentra's Financial Advisor", "--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "--Dissenters' Appraisal Rights", "--Historical Market Information", "--Selected Consolidated Financial Data of the Company", "Certain Projections", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Opinion of Concentra's Financial Advisor", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Position of WCAS and the Members of Management as to Fairness of the Merger", "--Interests of Certain Persons in the Merger", "Certain Effects of the Merger", "The Special Meeting--Voting Procedures" and "Rights of Dissenting Shareholders" - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- ITEM IN SCHEDULE 13E-3 CAPTION OR LOCATION IN THE PROXY STATEMENT - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 8(c) "Questions and Answers about the Merger", "Summary--Voting Procedures", "Special Factors--The Special Committee's and the Board's Recommendation", "The Special Meeting--Voting Procedures" and "The Merger--Terms of the Merger Agreement--Conditions to the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 8(d) "Questions and Answers about the Merger", "Summary--Recommendations", "--Opinion of Concentra's Financial Advisor", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Opinion of Concentra's Financial Advisor", and "--Interest of Certain Persons in the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 8(e) "Questions and Answers about the Merger", "Summary--Recommendations", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendations" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 8(f) "Special Factors -- Background of the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 9(a) - (c) "Summary--Recommendations", "--Opinion of Concentra's Financial Advisor", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Opinion of Concentra's Financial Advisor" and "--Conflicts of Interest" and Appendix B to the proxy statement - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 10(a) - (b) "Special Factors--Interests of Certain Persons in the Merger", "Principal Shareholders and Stock Ownership of Management and Others", and "Purchase Of Common Stock By Certain Persons" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 11 "Questions and Answers about the Merger", "Summary--The Companies", "--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Merger--Certain Terms of the Merger Agreement", "Certain Information Concerning Concentra ", "Certain Information Concerning Yankee" and "Purchase of Common Stock by Certain Persons" and Appendix A to the proxy statement. - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 12(a) - (b) "Summary--Recommendations" and "--Interests That Differ From Your Interests", "Special Factors--The Special Committee's and the Board's Recommendation", "--Purpose - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- ITEM IN SCHEDULE 13E-3 CAPTION OR LOCATION IN THE PROXY STATEMENT - ----------------------------------------------------------------------------------------------------------------------------------- and Reasons of WCAS and the Members of Management for the Merger", "--Position of WCAS and the Members of Management as to Fairness of the Merger", "--Interests of Certain Persons in the Merger", "Certain Information Concerning Concentra" and "Certain Information Concerning Yankee" - ----------------------------------------------------------------------------------------------------------------------------------- Item 13(a) "Summary--Dissenters' Appraisal Rights" "Rights of Dissenting Shareholders" and Appendix A and Appendix C to the proxy statement - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 13(b) * - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 13(c) * - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 14(a) "Summary--Selected Consolidated Financial Data" "Incorporation of Certain Documents by Reference" and "Independent Auditors" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 14(b) "Summary--Consolidated Pro Forma Financial Statements (Unaudited)" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 15(a) - (b) "Questions and Answers About the Merger" "Summary--Interests that Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Interests of Certain Persons in the Merger", "The Special Meeting--Proxy Solicitation", "The Merger--Certain Terms of the Merger Agreement", and "--Estimated Fees and Expenses of the Merger" - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 16 Proxy Statement - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Item 17(a) - (f) * - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- - ------------------------------ *Not applicable or answer is negative.
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION. (a) The information set forth on the cover page to the proxy statement and in the sections entitled "Questions and Answers About the Merger" and "Summary--The Companies" of the proxy statement is incorporated herein by reference. (b) The information set forth on the cover page to the proxy statement and in the sections entitled "Summary--Record Date; Voting Power" and "The Special Meeting--Record Date and Quorum Requirement" of the proxy statement is incorporated herein by reference. (c) The information set forth in the sections entitled "Summary--Historical Market Information" and "Purchases of Common Stock by Certain Persons" of the proxy statement is incorporated herein by reference. (d) The information set forth in the sections entitled "Summary--Historical Market Information" and "Purchases of Common Stock by Certain Persons" of the proxy statement is incorporated herein by reference. (e) Not applicable. (f) The information set forth in the section entitled "Purchases of Common Stock by Certain Persons"of the proxy statement is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a) - (d), (g) The information set forth in the sections entitled "Summary--The Companies", "Principal Stockholders and Stock Ownership of Management and Others," "Certain Information Concerning Concentra" and "Certain Information Concerning Yankee" of the proxy statement is incorporated herein by reference. (e), (f) The information set forth in the sections entitled "Certain Information Concerning Concentra" and "Certain Information Concerning Yankee" of the proxy statement is incorporated herein by reference. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS. (a) (1) The information set forth in the sections entitled "Summary--Interests That Differ From Your Interests", "Special Factors--Background of the Merger" and "--Interests of Certain Persons in the Merger" and "Purchases of Common Stock By Certain Persons" of the proxy statement is incorporated herein by reference. (a) (2) (b) The information set forth in the sections entitled "Questions and Answers About the Merger", "Summary--Terms of the Merger Agreement", "Interests That Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendations", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Merger--Certain Terms of the Merger Agreement", and "Purchases of Common Stock By Certain Persons" of the proxy statement is incorporated herein by reference. (b) The information set forth in the sections entitled "Questions and Answers About the Merger", "Summary--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendations", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Merger--Certain Terms of the Merger Agreement" "Certain Information Concerning Yankee" and "Purchases of Common Stock By Certain Persons" of the proxy statement is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION. (a) The information set forth in the sections entitled "Questions and Answers about the Merger", "Summary--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "--Dissenters' Appraisal Rights", "Special Factors--The Special Committee's and the Board's Recommendation", "--Purpose and Reasons of WCAS for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Special Meeting--Effective Time of the Merger and Payment for Shares", "The Merger--Certain Terms of the Merger Agreement", "Rights of Dissenting Stockholders" and Appendix A of the proxy statement is incorporated herein by reference. (b) The information set forth in the sections entitled "Questions and Answers about the Merger", "Summary--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "--Appraisal Rights", "Special Factors--Background of the Merger", "--Certain Projections", "--The Special Committee's and the Board's Recommendation", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Merger--Certain Terms of the Merger Agreement", "Rights of Dissenting Shareholders" and Appendix A of the proxy statement is incorporated herein by reference. ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE. (a) - (b) The information set forth in the sections entitled "Special Factors--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Certain Effects of the Merger", and "--Conduct of Concentra's Business After the Merger" of the proxy statement is incorporated herein by reference. (c) The information set forth in the sections entitled "Summary--Interests That Differ From Your Interests", "Special Factors--Interests of Certain Persons in the Merger" and "--Conduct of Concentra's Business After the Merger" of the proxy statement is incorporated herein by reference. (d) The information set forth in the sections entitled "Special Factors--Financing of the Merger", "Conduct of Concentra's Business After the Merger", and "The Merger--Certain Terms of the Merger Agreement" of the proxy statement is incorporated herein by reference. (e) The information set forth in the sections entitled "Questions and Answers About the Merger", "Summary--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendations", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "--Conduct of Concentra's Business After the Merger", and "The Merger--Certain Terms of the Merger Agreement" of the proxy statement is incorporated herein by reference. (f) - (g) The information set forth in the sections entitled "Questions and Answers About the Merger" and "Special Factors--Certain Effects of the Merger" of the proxy statement is incorporated herein by reference. ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) The information set forth in the section entitled "Special Factors--Financing of the Merger" of the proxy statement is incorporated herein by reference. (b) The information set forth in the section entitled "The Merger--Estimated Fees and Expenses of the Merger" of the proxy statement is incorporated herein by reference. (c) The information set forth in the sections entitled "Special Factors--Financing of the Merger" of the proxy statement is incorporated herein by reference. (d) Not applicable. ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS. (a) - (c) The information set forth in the sections entitled "Questions and Answers about the Merger", "Summary", "Special Factors--Background of the Merger", "-- Special Committee's and the Board's Recommendation", and "--Purpose and Reasons of WCAS and the Members of Management for the Merger" of the proxy statement is incorporated herein by reference. (d) The information set forth in the sections entitled "Questions and Answers about the Merger", "Summary", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "--Conduct of Concentra's Business After the Merger", "Material Federal Income Tax Consequences", "The Merger--Terms of the Merger Agreement" and "--Estimated Fees and Expenses of the Merger" and "Rights of Dissenting Stockholders" of the proxy statement is incorporated herein by reference. ITEM 8. FAIRNESS OF THE TRANSACTION. (a) The information set forth in the sections entitled "Questions and Answers about the Merger", "Summary-- Recommendations", "Special Factors--The Special Committee's and the Board's Recommendation", and "--Position of WCAS and the Members of Management as to Fairness of the Merger" of the proxy statement is incorporated herein by reference. (b) The information set forth in the sections entitled "Questions and Answers about the Merger", "Summary--Recommendations", "--Opinion of Concentra's Financial Advisor", "--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "--Dissenters' Appraisal Rights", "--Historical Market Information", "--Selected Consolidated Financial Data of the Company", "Certain Projections", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Opinion of Concentra's Financial Advisor", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Position of WCAS and the Members of Management as to Fairness of the Merger", "--Interests of Certain Persons in the Merger", "Certain Effects of the Merger", "The Special Meeting--Voting Procedures" and "Rights of Dissenting Shareholders" of the proxy statement is incorporated herein by reference. (d) The information set forth in the sections entitled "Questions and Answers about the Merger", "Summary--Recommendations", "--Opinion of Concentra's Financial Advisor", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Opinion of Concentra's Financial Advisor", and "--Interest of Certain Persons in the Merger" of the proxy statement is incorporated herein by reference. (e) The information set forth in the sections entitled "Questions and Answers about the Merger", "Summary--Recommendations", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendations" of the proxy statement is incorporated herein by reference. (f) The information set forth in the section "Special Factors--Background of the Merger" of the proxy statement is incorporated herein by reference. ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS. (a) - (c) The information set forth in the sections entitled "Summary--Recommendations", "--Opinion of Concentra's Financial Advisor", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Opinion of Concentra's Financial Advisor" and "--Conflicts of Interest" and Appendix B of the proxy statement is incorporated herein by reference. ITEM 10. INTEREST IN SECURITIES OF THE ISSUER. (a) - (b) The information set forth in the sections entitled "Special Factors--Interests of Certain Persons in the Merger", "Principal Shareholders and Stock Ownership of Management and Others", and "Purchase Of Common Stock By Certain Persons" of the proxy statement is incorporated herein by reference. ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S SECURITIES. The information set forth in the sections entitled "Questions and Answers about the Merger", "Summary--The Companies", "--Terms of the Merger Agreement", "--Interests That Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Interests of Certain Persons in the Merger", "--Certain Effects of the Merger", "--Financing of the Merger", "The Merger--Certain Terms of the Merger Agreement", "Certain Information Concerning Concentra ", "Certain Information Concerning Yankee" and "Purchase of Common Stock by Certain Persons" and Appendix A of the proxy statement is incorporated herein by reference. ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO THE TRANSACTION. (a) - (b) The information set forth in the sections entitled "Summary-- Recommendations" and "--Interests That Differ From Your Interests", "Special Factors--The Special Committee's and the Board's Recommendation", "--Purpose and Reasons of WCAS and the Members of Management for the Merger", "--Position of WCAS and the Members of Management as to Fairness of the Merger", "--Interests of Certain Persons in the Merger", and "Certain Information Concerning Concentra" and "Certain Information Concerning Yankee" of the proxy statement is incorporated herein by reference. ITEM 13. OTHER PROVISIONS OF THE TRANSACTION. (a) The information set forth in the sections entitled "Summary--Dissenters' Appraisal Rights" "Rights of Dissenting Shareholders" and Appendix A and Appendix C of the proxy statement is incorporated herein by reference. (b) Not applicable. (c) Not applicable. ITEM 14. FINANCIAL INFORMATION. (a) The information set forth in the sections entitled "Summary--Selected Consolidated Financial Data" "Incorporation of Certain Documents by Reference" and "Independent Auditors" of the proxy statement is incorporated herein by reference. (b) The relevant financial information set forth under the section entitled "Summary--Selected Consolidated Financial Data" of the proxy statement is incorporated herein by reference. ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED. (a) - (b) The information set forth in the sections entitled "Questions and Answers About the Merger" "Summary--Interests that Differ From Your Interests", "Special Factors--Background of the Merger", "--The Special Committee's and the Board's Recommendation", "--Interests of Certain Persons in the Merger", "The Special Meeting--Proxy Solicitation", "The Merger--Certain Terms of the Merger Agreement", and "--Estimated Fees and Expenses of the Merger" of the proxy statement is incorporated herein by reference. ITEM 16. ADDITIONAL INFORMATION. The entirety of the proxy statement is incorporated herein by reference. ITEM 17. MATERIAL TO BE FILED AS EXHIBITS. - -------------------------------------------------------------------------------- EXHIBIT NO. DESCRIPTION - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (a)(1) Commitment Letter dated February 26, 1999 from Chase Securities Inc., The Chase Manhattan Bank, DLJ Capital Funding, Inc., Credit Suisse First Boston and Fleet National Bank. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (a)(2) Letter dated February 24, 1999 from Chase Capital Partners. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (a)(3) Letter dated March 1, 1999 from WCAS Capital Partners III, L.P. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (b)(1) Opinion of BT Alex. Brown Incorporated dated March 2, 1999 (included as Appendix B to the Preliminary Proxy Statement, which is filed herewith as Exhibit (d)(3)). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (c)(1) Agreement and Plan of Merger dated as of March 24, 1999 by and between Yankee - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- EXHIBIT NO. DESCRIPTION - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Acquisition Corp. and Concentra Managed Care, Inc. (included as Appendix A to the Preliminary Proxy Statement, which is filed herewith as Exhibit (d)(3)). - -------------------------------------------------------------------------------- (c)(2) Contribution Letter dated March 24, 1999 by Welsh, Carson, Anderson & Stowe VIII, L.P. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (c)(3) Stock Subscription Agreement dated as of March 24, 1999 by Ferrer Freeman Thompson & Co. on behalf of Health Care Capital Partners L.P. and on behalf of Health Care Executive Partners and Yankee Acquisition Corp. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (d)(1) Letter to Stockholders (included in the Preliminary Proxy Statement, which is filed herewith as Exhibit (d)(3)). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (d)(2) Notice of Special Meeting of Stockholders (included in the Preliminary Proxy Statement, which is filed herewith as Exhibit (d)(3)). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (d)(3) Preliminary Proxy Statement (incorporated by reference to the Schedule 14A filed by Concentra on June 7, 1999). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (d)(4) Form of Proxy (included in the Preliminary Proxy Statement, which is filed herewith as Exhibit (d)(3)). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (d)(5) Press Release issued by Concentra Managed Care, Inc. dated as of April 28, 1999 (incorporated by reference to the Current Report on Form 8-K filed by Concentra on April 28, 1999). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (d)(6) Press Release issued by Concentra Managed Care, Inc. dated as of March 3, 1999 (incorporated by reference to the Current Report on Form 8-K filed by Concentra on March 3, 1999). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (d)(7) Press Release issued by Concentra Managed Care, Inc. dated as of March 25, 1999 (incorporated by reference to the Current Report on Form 8-K filed by Concentra on March 29, 1999). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (e) Text of Section 262 of the Delaware General Corporation Law (included as Appendix C to the Preliminary Proxy Statement, which is filed herewith as Exhibit (d)(3)). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (f) Not applicable. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 99.1 Powers of Attorney. - -------------------------------------------------------------------------------- SIGNATURES After due inquiry and to the best of our knowledge and belief, each of the undersigned certifies that the information set forth in this Statement is true, complete and correct. CONCENTRA MANAGED CARE, INC. By: /s/Daniel J. Thomas* ----------------------------------- Daniel J. Thomas Dated: President YANKEE ACQUISITION CORP. By: /s/Paul B. Queally ----------------------------------- Paul B. Queally Dated: President WELSH, CARSON, ANDERSON & STOWE, VIII, L.P. By: WCAS VIII Associates, LLC, General Partner By: /s/Paul B. Queally ----------------------------------- Paul B. Queally Dated: Managing Member JOHN K. CARLYLE /s/ John K. Carlyle* Dated: -------------------------------------------------- W. TOM FOGARTY, M.D. /s/ W. Tom Fogarty, M.D.* Dated: -------------------------------------------------- JAMES M. GREENWOOD /s/ James M. Greenwood* Dated: -------------------------------------------------- THOMAS E. KIRALY /s/ Thomas E. Kiraly* Dated: -------------------------------------------------- KENNETH LOFFREDO /s/ Kenneth Loffredo* Dated: -------------------------------------------------- RICHARD A. PARR II /s/ Richard A. Parr II Dated: -------------------------------------------------- DANIEL J. THOMAS /s/ Daniel J. Thomas* Dated: -------------------------------------------------- *The undersigned, by signing his name hereto, does sign and execute this Schedule 13E-3 as of this 6th day of June, 1999 pursuant to the Powers of Attorney executed on behalf of the above-named officers and directors and contemporaneously filed herewith with the Securities and Exchange Commission By: /s/ Richard A. Parr II -------------------------------------------------- Richard A. Parr II Attorney-in-Fact EX-99.A.1 2 ADDITIONAL EXHIBITS EXHIBIT (A)(1) CHASE SECURITIES INC. THE CHASE MANHATTAN BANK 270 Park Avenue New York, New York 10017 DLJ CAPITAL FUNDING, INC. 277 Park Avenue New York, New York 10172 CREDIT SUISSE FIRST BOSTON Eleven Madison Avenue New York, New York 10010-3629 FLEET NATIONAL BANK One Federal Street Boston, Massachusetts 02110 February 26, 1999 $475,000,000 SENIOR SECURED CREDIT FACILITIES COMMITMENT LETTER Welsh, Carson, Anderson & Stowe VIII, L.P. 320 Park Avenue Suite 2500 New York, New York 10022-6815 Attention: Andrew M. Paul Paul B. Queally D. Scott Mackesy Gentlemen: You have advised Chase Securities Inc. ("CSI"), The Chase Manhattan Bank ("CHASE"), DLJ Capital Funding, Inc. ("DLJ"), Credit Suisse First Boston ("CSFB") and Fleet National Bank ("FLEET"; together with Chase, DLJ and CSFB, the "UNDERWRITERS") that you, together with your affiliates (collectively, "WCAS") will form a new corporation ("NEWCO") for the purpose of effecting the recapitalization (the "ACQUISITION") of Concentra Managed Care, Inc. ("CONCENTRA"). The Acquisition will be effected by a merger of Newco with and into Concentra, as a result of which WCAS will own 93% of the common stock of Concentra and the existing stockholders will own 7% of such common stock. The existing stockholders of Concentra, other than WCAS, will receive cash consideration in exchange for the remainder of their common stock in Concentra. Alternatively, in the event that WCAS and Concentra so agree, WCAS will form a new corporation ("NEWCO I") and other investors selected by WCAS and satisfactory to the Underwriters (collectively, the "OTHER INVESTOR") will form a new corporation ("NEWCO II"), and the Acquisition will be effected by Newco I and Newco II being merged with and into Concentra, as a result of which WCAS and the Other Investor will own 93% and 7%, respectively, of the common stock of Concentra and the other existing stockholders of Concentra will receive cash for all their existing common stock of Concentra. For purposes hereof, any such alternate transaction (the 1 "ALTERNATE TRANSACTION") is also referred to as the "Acquisition." Immediately after the Acquisition, Concentra will contribute (the "CONTRIBUTION") all of its assets, including the stock of its direct subsidiaries, to a newly created wholly-owned subsidiary (the "Borrower"). In connection with the Acquisition and the Contribution, approximately $328,000,000 of the existing indebtedness of Concentra will be refinanced (the "REFINANCING"; together with the Acquisition and the Contribution, the "TRANSACTIONS"). In connection with the Transactions, you have advised us that you propose to finance such Transactions with (i) senior secured credit facilities in an aggregate amount of up to $475,000,000 (the "FACILITIES") of the Borrower, comprise of term loan facilities aggregating $375,000,000 (the "TERM FACILITIES") and a $100,000,000 revolving credit facility (the "REVOLVING FACILITY"), (ii) senior subordinated financing in an aggregate amount of $190,000,000 of the Borrower on terms and conditions acceptable to the Agents (as defined below), (iii) senior unsecured pay-in-kind notes of $110,200,000 issued by Concentra and (iv) common equity in Newco consisting of $288,500,000 in new cash equity contributed by WCAS and $59,100,000 of shares of common stock of Concentra held by WCAS. After giving effect to the Acquisition, the existing stockholders will own common equity of Concentra having a value of $30,600,000. (In the event of the Alternative Acquisition, the Other Investor would invest $30,600,000 in the common equity of Newco II). The Revolving Facility will be used to finance the continuing operations, working capital needs and general corporate purposes of the Borrower and its subsidiaries, including acquisitions and investments in other entities subject to restrictions and limitations to be approved by CSI and the Underwriters. CSI is pleased to advise you that it is willing to act as advisor, co-lead arranger and joint book manager for the Facilities (in such capacity, a "CO-LEAD ARRANGER"), and Chase is pleased to advise you that it is willing to serve as administrative agent for the Facilities (in such capacity, the "ADMINISTRATIVE AGENT"). In addition, DLJ is pleased to advise you that it is willing to act as co-lead arranger (a "CO-LEAD ARRANGER"), joint book manager and syndication agent for the Facilities (in such capacity, the "SYNDICATION AGENT"; together with the Administrative Agent, collectively, the "AGENTS"). Furthermore, each of Chase and DLJ is pleased to advise you of its commitment to provide up to $166,250,000 of the Facilities and each of CSFB and Fleet is pleased to advise you that it is willing to act as co-documentation agent (each, in such capacity, a "CO-DOCUMENTATION AGENT") and of its commitment to provide up to $71,250,000 of the Facilities, in each case upon the terms and subject to the conditions set forth or referred to in this commitment letter (the "COMMITMENT Letter") and in the Summary of Terms and Conditions attached hereto as Exhibit A (the "TERM SHEET"). It is agreed that CSI and DLJ will act as the Co-Lead Arrangers, that Chase will act as the Administrative Agent, that DLJ will act as the Syndication Agent, for the Facilities and that CSFB and Fleet will act as the Co-Documentation Agents. You agree that no other agents, co-agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated by the Term Sheet and the Fee Letters referred to below) will be paid in connection with the Facilities unless you and CSI and Chase shall so agree. CSI and Chase intend to syndicate the Facilities to a group of financial institutions (together with the Underwriters, the "LENDERS") identified by CSI and Chase in consultation with you. CSI and Chase intend to commence syndication efforts promptly upon your entering into definitive documentation with respect to the Acquisition, and you agree actively to assist CSI and Chase in completing a syndication satisfactory to them. Such assistance shall include (a) your using commercially reasonable efforts to ensure that the syndication efforts benefit materially from the existing lending relationships of WCAS, Concentra and the Borrower, (b) direct contact between senior management and advisors of WCAS, Concentra and the Borrower and the proposed Lenders, (c) assistance in the preparation of a Confidential Information Memorandum and other marketing materials to be used in connection with the syndication and (d) the hosting, with CSI and Chase, of one or more meetings of prospective Lenders. CSI and Chase will manage all aspects of the syndication of the Facilities, including decisions as to the selection of institutions to be approached and when they will be approached, when their commitments will be accepted, which institutions will participate, the allocations of the commitments among the Lenders and the amount and distribution of fees among the Lenders in consultation with you. To assist CSI and Chase in their syndication efforts, you agree promptly to prepare and provide to CSI and Chase all information with respect to WCAS, the Borrower, the Transactions 2 and the other transactions contemplated hereby and to obtain the agreement of Concentra to prepare and provide all information with respect to it, in each case, including all reasonable financial information and projections (the "PROJECTIONS"), as we may reasonably request in connection with the arrangement and syndication of the Facilities. You hereby represent and covenant that, to your knowledge, (a) all information other than the Projections (the "INFORMATION") that has been or will be made available to CSI and the Underwriters by you or any of your representatives is or will be, when furnished, complete and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made and (b) the Projections that have been or will be made available to CSI and the Underwriters by you or any of your representatives have been or will be prepared in good faith based upon assumptions that you believe in good faith to be reasonable. CSI and the Underwriters understand that Concentra is not your representative. You understand that in arranging and syndicating the Facilities we may use and rely on the Information and Projections without independent verification thereof. As consideration for the commitments of the Underwriters hereunder and the agreements of the Agents to perform the services described herein, you agree to pay, and to cause the Borrower to pay, the nonrefundable fees set forth in Annex I to the Term Sheet and in the Underwriters Fee Letter and the Administrative Agent Administration Fee Letter, each dated the date hereof and delivered herewith (collectively, the "FEE LETTERS"). CSI and Chase shall be entitled, after consultation with you, DLJ, CSFB and Fleet to change the pricing, terms, structure or amounts of any of the Facilities if the syndication has not been completed and if CSI and Chase reasonably determine that such changes are advisable to ensure a successful syndication of the Facilities; provided the total amount of the Facilities remains unchanged. The commitments hereunder and the agreements to perform the services described herein are subject to (a) there not occurring or becoming known to us any material adverse condition or material adverse change in or affecting the business, operations, property, condition (financial or otherwise) or prospects of Concentra and its subsidiaries, taken as a whole since December 31, 1997, (b) our not becoming aware after the date hereof of any information or other matter affecting Concentra, the Borrower or the transactions contemplated hereby which is inconsistent in a material and adverse manner with any such information or other matter disclosed to us prior to the date hereof, (c) there not having occurred a material disruption of or material adverse change in financial, banking or capital market conditions that, in the judgment of CSI and Chase, could materially impair the syndication of credit facilities similar or comparable to the Facilities, (d) our satisfaction that prior to and during the syndication of the Facilities there shall be no competing offering, placement or arrangement of any debt securities or bank financing by or on behalf of WCAS, Concentra or the Borrower or any of their respective affiliates (except for any such debt securities as contemplated hereby and for any debt securities or bank financing by or on behalf of WCAS and its other affiliates as are coordinated with the syndication of the Facilities in consultation with CSI and Chase), (e) the negotiation, execution and delivery of definitive documentation with respect to the Facilities satisfactory to CSI, the Underwriters and their respective counsels, and the closing of the transactions thereunder and the Transactions on or before August 31, 1999, and (f) the other conditions set forth or referred to in the Term Sheet. You agree (a) to indemnify and hold harmless CSI, Chase, DLJ, CSFB and Fleet, their respective affiliates and their respective officers, directors, employees, advisors, and agents (each, an "INDEMNIFIED person") from and against any and all losses, claims, damages and liabilities to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Facilities, the use of the proceeds thereof, the Transactions or any other related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any indemnified person is a party thereto, and to reimburse each indemnified person upon demand for any reasonable legal or other expenses incurred in connection with investigating or defending any of the foregoing, PROVIDED that the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they are found by a final, non-appealable judgment of a court to arise from the willful misconduct, bad faith or gross negligence of such indemnified person, and (b) to reimburse CSI, Chase, DLJ, CSFB and Fleet and their respective affiliates on demand for all reasonable out-of-pocket expense (including due diligence expense, syndication expenses, consultant's fees and expenses, travel expenses, and reasonable fees, charges and disbursements 3 of counsel) incurred in connection with the Facilities and any related documentation (including this Commitment Letter, the Term Sheet, the Fee Letters and the definitive financing documentation) or the administration, amendment, modification or waiver thereof. No indemnified person shall be liable for any damages arising from the use by others of Information (provided that such indemnified person is not in breach of the confidentiality provisions hereof) or other materials obtained through electronic, telecommunications or other information transmissions systems or for any special, indirect, consequential or punitive damages in connection with the Facilities. You acknowledge that we and our respective affiliates (the term "we" being understood to refer hereinafter in this paragraph to include such affiliates) may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which you may have conflicting interests regarding the transactions described herein and otherwise. We will not use confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter or our other relationships with you in connection with the performance by us of services for other companies, and we will not furnish any such information to other companies. You also acknowledge that we have no obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained from other companies. This Commitment Letter shall not be assignable by any party hereto without the prior written consent of the other parties hereto (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto. This Commitment Letter may not be amended or waived except by an instrument in writing signed by you, CSI, Chase, DLJ, CSFB and Fleet. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Commitment Letter by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter and the Fee Letters are the only agreements that have been entered into among us with respect to the Facilities and set forth the entire understanding of the parties with respect thereto. This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York. This Commitment Letter is delivered to you on the understanding that neither this Commitment Letter, the Term Sheet or the Fee Letters nor any of their terms or substance shall be disclosed, directly or indirectly, to any other person except (a) you may disclose this Commitment Letter, the Term Sheet and the Fee Letters (i) to your officers, agents and advisors who are directly involved in the consideration of this matter or (ii) as may be compelled in a judicial or administrative proceeding or as otherwise required by law, including public disclosures required under United States securities rules and regulations (in which case you agree to inform us promptly thereof) and (b) you may disclose this Commitment Letter and the Term Sheet, and their terms and substance (but not the Fee Letters or their terms and substance) to Concentra, its officers, agents and advisors who are directly involved in the consideration of the Transactions on a confidential basis. The compensation, reimbursement, indemnification and confidentiality provisions contained herein and in the Fee Letters shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the commitments hereunder; PROVIDED, that your obligations under this Commitment Letter, other than those arising under the fourth, fifth, sixth and thirteenth paragraphs hereof, shall automatically terminate and be superseded by the provisions of the definitive documentation relating to the Facilities upon the initial funding thereunder, and you shall automatically be release from all liability in connection therewith at such time. Subject to the foregoing, this Commitment Letter shall automatically terminate if the closing of the Facilities shall not occur by reason of any condition described in clause (c) or (d) in the ninth paragraph hereof not being satisfied or waived, as of the date on which the parties hereto mutually agree that such closing would otherwise occur. If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof and of the Term Sheet and the Fee Letters by returning to us executed counterparts hereof and of the Fee Letters not later than 8:00 p.m., New York City time, on February 26, 1999. The commitments and the agreements herein will expire at such 4 time in the event Chase has not received such executed counterparts and such amounts in accordance with the immediately preceding sentence. 5 We are pleased to have been given the opportunity to assist you in connection with this important financing. Very truly yours, CHASE SECURITIES INC. By: /s/ JAMES A. FEELEY III ------------------------------------ Name: JAMES A. FEELEY III ---------------------------------- Title: VICE PRESIDENT ---------------------------------- THE CHASE MANHATTAN BANK By: /s/ DEBORAH DAVEY ------------------------------------ Name: DEBORAH DAVEY ---------------------------------- Title: VICE PRESIDENT DLJ CAPITAL FUNDING, INC. By: /s/ JAMES L. PARADISE ------------------------------------ Name: JAMES L. PARADISE ---------------------------------- Title: SENIOR VICE PRESIDENT --------------------------------- CREDIT SUISSE FIRST BOSTON By: /s/ RICHARD CARY ------------------------------------ Name: RICHARD CARY ----------------------------------- Title: DIRECTOR ---------------------------------- By: /s/ ARTURO DE PENA ------------------------------------ Name: ARTURO DE PENA ------------------------------------ Title: DIRECTOR ----------------------------------- FLEET NATIONAL BANK By: /s/ JOHN E. DUNCAN ------------------------------------ Name: JOHN E. DUNCAN ----------------------------------- Title: MANAGING DIRECTOR ---------------------------------- 6 Accepted and agreed to as of the date first written above by: WELSH, CARSON, ANDERSON & STOWE VIII, L.P. By: WCAS VIII ASSOCIATES, L.L.C., its General Partner By: /s/ ANDREW M. PAUL ----------------------------------- Name: ANDREW M. PAUL ---------------------------------- Title: MEMBER 7 Exhibit A SENIOR SECURED CREDIT FACILITIES Summary of Terms and Conditions February 26, 1999 -------------------- Welsh, Carson, Anderson & Stowe VIII, L.P., together with its affiliates (collectively, "WCAS") will form a new corporation ("NEWCO") for the purpose of effecting the recapitalization (the "ACQUISITION") of Concentra Managed Care, Inc. ("CONCENTRA"). The Acquisition will be effected by a merger of Newco with and into Concentra, as a result of which WCAS will own 93% of the common stock of Concentra and the existing stockholders will own 7% of such common stock. The existing stockholders of Concentra, other than WCAS, will receive cash consideration in exchange for the remainder of their common stock in Concentra. Alternatively, in the event that WCAS and Concentra so agree, WCAS will form a new corporation ("NEWCO I") and other investors selected by WCAS and satisfactory to the Underwriters (collectively, the "OTHER INVESTOR") will form a new corporation ("NEWCO II"), and the Acquisition will be effected by Newco I and Newco II being merged with and into Concentra, as a result of which WCAS and the Other Investor will own 93% and 7%, respectively, of the common stock of Concentra and the other existing stockholders of Concentra will receive cash for all their existing common stock of Concentra. For purposes hereof, any such alternate transaction (the "ALTERNATE TRANSACTION") is also referred to as the "Acquisition." Immediately after the Acquisition, Concentra will contribute (the "CONTRIBUTION") all of its assets, including the stock of its direct subsidiaries, to a newly created wholly-owned subsidiary (the "BORROWER"). In connection with the Acquisition and the Contribution, approximately $328,000,000 of the existing indebtedness of Concentra will be refinanced (the "REFINANCING"; together with the Acquisition and the Contribution, the "TRANSACTIONS"). I. PARTIES Concentra: Concentra Managed Care, Inc. Borrower: A newly created, wholly owned-subsidiary of Concentra as referred to above (the "BORROWER"). Guarantors: All obligations of the Borrower under the Senior Secured Credit Facility and hedging arrangements entered into with the Lenders (as defined below) and their affiliates shall be unconditionally guaranteed by Concentra and each of the Borrower's direct and indirect wholly-owned subsidiaries (the "GUARANTORS"; the Borrower and the Guarantors, collectively, the "LOAN PARTIES"). Advisor, Co-Lead Arranger and Joint Book Manager: Chase Securities Inc. ("CSI" and, in such capacity, a "CO-LEAD ARRANGER"). Administrative Agent: The Chase Manhattan Bank ("CHASE" and, in such capacity, the "ADMINISTRATIVE AGENT"). Co-Lead Arranger, Joint Book Manager and Syndication Agent: DLJ Capital Funding, Inc. ("DLJ") (in such capacity, the "SYNDICATION AGENT" or a "CO-LEAD ARRANGER"; together with the Administrative Agent, the "AGENTS"). 1 Co-Documentation Agents: Credit Suisse First Boston ("CSFB") and Fleet National Bank ("FLEET"; each, in such capacity, a "CO-DOCUMENTATION AGENT"). Lenders: A syndicate of banks, financial institutions and other entities, including Chase, DLJ, CSFB and Fleet, to be arranged by CSI and the Administrative Agent in consultation with the Borrower (the "LENDERS"). II. TYPES AND AMOUNTS OF CREDIT FACILITIES 1. TERM FACILITIES Type and Amount of Facility: Term loan facilities (the "TERM FACILITIES") in the aggregate principal amount of $375,000,000 (the loans thereunder, the "TERM LOANS") as follows: TRANCHE B TERM FACILITY: A seven year term loan facility to the Borrower (the "TRANCHE B TERM FACILITY") in an aggregate principal amount of $250,000,000 (the loans thereunder, the "TRANCHE B TERM LOANS"). The Tranche B Term Loans shall be repayable in nominal quarterly installments (in no event more than 1% per annum) for the first six years and thereafter in substantial quarterly installments to be determined until the date that is seven years after the Closing Date. TRANCHE C TERM FACILITY: An eight year term loan facility to the Borrower (the "TRANCHE C TERM FACILITY") in an aggregate principal amount of $125,000,000 (the loans thereunder, the "TRANCHE C TERM LOANS"). The Tranche C Term Loans shall be repayable in nominal quarterly installments (in no event more than 1% per annum) for the first seven years and thereafter in substantial quarterly installments to be determined until the date that is eight years after the Closing Date. Availability: The Term Loans shall be made in a single drawing on the Closing Date (as defined below). Purpose: The proceeds of the Term Loans shall be used to finance the Transactions and to pay related fees and expenses. 2. REVOLVING FACILITY Type and Amount of Facility: Six-year revolving credit facility (the "REVOLVING FACILITY"; together with the Term Facilities, the "CREDIT FACILITIES") in the amount of $100,000,000 (the loans thereunder, the "REVOLVING LOANS"; together with the Term Loans, the "LOANS"). Availability: The Revolving Facility shall be fully available on a revolving basis during the period following the Closing Date and ending on the sixth anniversary thereof (the "REVOLVING TERMINATION DATE"). No Revolving Loans shall be made on the Closing Date. Letters of Credit: A portion of the Revolving Facility not in excess of an amount to be determined shall be available for the issuance of letters of credit (the "LETTERS OF CREDIT") by Chase (in such capacity, the "ISSUING LENDER"). No 2 Letter of Credit shall have an expiration date after the earlier of (a) one year after the date of issuance (unless approved by Lenders holding not less than a majority of the Revolving Facility) and (b) five business days prior to the Revolving Termination Date, PROVIDED that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (b) above). Drawings under any Letter of Credit shall be reimbursed by the Borrower (whether with its own funds or with the proceeds of the Revolving Loans) on the next business day. To the extent that the Borrower does not so reimburse the Issuing Lender, the Lenders under the Revolving Facility shall be irrevocably and unconditionally obligated to reimburse the Issuing Lender on a PRO RATA basis. Maturity: The Revolving Termination Date. Purpose: The proceeds of the Revolving Loans shall be used to finance the working capital needs and for general corporate purposes of the Borrower and its subsidiaries, including acquisitions and investments in other entities subject to restrictions and limitations to be determined. III. CERTAIN PAYMENT PROVISIONS Fees and Interest Rates: As set forth on Annex I. Optional Prepayments and Commitment Reductions: Loans may be prepaid and commitments may be reduced by the Borrower in minimum amounts to be agreed upon. Optional prepayments of the Term Loans shall be applied to the Tranche B Loans and the Tranche C Loans ratably and to the installments thereof in an order to be determined and may not be reborrowed. Mandatory Prepayments and Commitment Reductions: The following amounts shall be applied to prepay the Term Loans and reduce the Revolving Facility: (a) 50% of the net proceeds of any sale or issuance of equity after the Closing Date by Concentra or the Borrower (excluding equity issued to directors and employees under benefit plans, equity issued to sellers as consideration in acquisitions and equity issued to the existing shareholders of Concentra or in a private placement to investors arranged by WCAS to finance acquisitions); (b) 100% of the net proceeds of any incurrence of certain indebtedness (excluding Senior Subordinated Notes (as defined below) the net proceeds of which are used to refinance the Senior Subordinated Bridge Debt (as defined below)) after the Closing Date by Concentra or the Borrower or any of their subsidiaries; 3 (c) 100% of the net proceeds of any sale or other disposition (other than as a result of casualty or condemnation where such proceeds are used to repair or replace assets up to a maximum amount to be determined) by Concentra or the Borrower or any of their subsidiaries of any assets (except for the sale of inventory in the ordinary course of business and certain other exceptions to be agreed upon and subject to threshold and limitations to be determined); and (d) 50% of excess cash flow (to be defined in a mutually satisfactory manner) for each fiscal year of the Borrower commencing with the first full fiscal year after the Closing Date). All such amounts shall be applied, FIRST, to the prepayment of the Term Loans and, SECOND, to the permanent reduction of the Revolving Facility. Each such prepayment of the Term Loans shall be applied to the Tranche B Term Loans and the Tranche C Term Loans ratably and to the installments thereof in an order to be determined and may not be reborrowed. The Revolving Loans shall be prepaid and the Letter of Credit shall be cash collateralized or replaced to the extent such extensions of credit exceed the amount of the Revolving Facility. IV. COLLATERAL The obligations of each Loan Party in respect to the Credit Facilities and heading arrangements entered into with the Lenders and their affiliates shall be secured by a perfected first priority security interest in substantially all of its tangible and intangible assets (including, without limitation, intellectual property, real property and all of the capital stock of each of its direct and indirect subsidiaries), excluding assets subject to certain permitted liens and rights under non-assignable contracts of types to be agreed upon. V. CERTAIN CONDITIONS Initial Conditions: The availability of the Credit Facilities shall be conditioned upon satisfaction of, among other things, the following conditions precedent (the date upon which all such conditions precedent shall be satisfied, the "CLOSING DATE"); (a) Each Loan Party shall have executed and delivered satisfactory definitive financing documentation with respect to the Credit Facilities (the "CREDIT DOCUMENTATION"). (b) Newco shall have received at least $347,600,000 in cash and Concentra shares from the issuance of its common stock (which amount includes the cash purchase price for shares in Newco purchased by WCAS and the value of shares already owned by WCAS and contributed to Newco, each as set forth in the Sources and Uses Table in Annex II hereto) on satisfactory terms and conditions. The existing stockholders (other than WCAS) will own 7% of the common stock of Concentra after the Acquisition with a value of approximately $30,600,000. Concentra shall have received at least $110,200,000 from the issuance of its senior unsecured notes on satisfactory terms and conditions (including that the interest thereon shall be payable in kind for at least the first five years 4 following the Closing Date) (the "CONCENTRA NOTES"), each on satisfactory terms and conditions, and the Borrower shall have received at least $190,000,000 from the issuance of senior subordinated bridge debt to an affiliate of WCAS and other investors arranged by it (the "SENIOR SUBORDINATED BRIDGE DEBT") on satisfactory terms and conditions or its senior subordinated debt (the "SENIOR SUBORDINATED NOTES"), issued in a public offering or under Rule 144A on satisfactory terms and conditions. The ownership and capital structure of each Loan Party after the Transactions; and the terms applicable thereto, shall be reasonably satisfactory in all respects. (c) The Transactions shall have been consummated in a manner consistent with the Sources and Uses Table attached as Annex II hereto and pursuant to reasonably satisfactory documentation, and no provision of such documentation shall have been waived, amended, supplemented or otherwise modified in any material respect. Concentra and its subsidiaries shall not have any indebtedness (other than immaterial indebtedness on terms and conditions satisfactory to the Administrative Agent) immediately prior to or immediately after the Closing Date other than the Concentra Notes, the Senior Subordinated Notes and the Loans and indebtedness refinanced as contemplated on such Sources and Uses Table. (d) The Lenders, the Co-Lead Arrangers, the Co-Documentation Agents and the Agents shall have received all fees required to be paid, and all expenses required to be reimbursed and for which invoices have been presented, on or before the Closing Date. (e) All governmental and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the Transactions, the financings contemplated hereby and the continuing operations of Concentra, the Borrower and their subsidiaries shall have been obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose materially adverse conditions on the Transactions or the financings thereof. (f) The Lenders shall have received (i) satisfactory audited consolidated financial statements of Concentra for its fiscal year ended December 31, 1998 and satisfactory unaudited consolidating (on a business unit basis) financial statements of Concentra for such fiscal year and (ii) satisfactory unaudited interim consolidated and consolidating (on a business unit basis) financial statements of Concentra for each quarterly period and satisfactory unaudited interim consolidated financial statements of Concentra for each fiscal month, ended subsequent to December 31, 1998, as to which such financial statements are available. (g) Concentra shall have consolidated EBITDA for the twelve months ending with the fiscal quarter most recently completed prior to the Closing Date of not less than $107,500,000 (calculated in a manner consistent with discussions between WCAS and CSI prior to the date hereof). 5 (h) The Lenders shall have received a satisfactory PRO FORMA consolidated balance sheet of each of Concentra and the Borrower as at the date of the most recent consolidated balance sheet delivered pursuant to paragraph (f) above, adjusted to give effect to the consummation of the Transactions and the financings contemplated hereby as if such transactions had occurred on such date. (i) The Lenders shall have received satisfactory financial information and analyses for Concentra and the Borrower and their subsidiaries for the period from the Closing Date through the final maturity of the Term Loans. (j) The Lenders shall have received the results of a recent lien search in each relevant jurisdiction with respect to Concentra, the Borrower and their subsidiaries, and such search shall reveal no liens on any of the assets of Concentra, the Borrower or their subsidiaries except for liens permitted by the Credit Documentation or liens to be discharged on or prior to the Closing Date pursuant to documentation satisfactory to the Administrative Agent. (k) The fees and expenses to be incurred in connection with the Transactions and the financing thereof shall not exceed $45,000,000 in the aggregate. (l) The Agents shall be reasonably satisfied with the liability and casualty insurance applicable to the Borrower and its subsidiaries on the Closing Date, with respect to periods before and after the Closing Date. (m) The Lenders shall have received a satisfactory solvency opinion from an independent valuation firm reasonably satisfactory to the Administrative Agent that shall document the solvency of Concentra and the Borrower (on a consolidated basis) after giving effect to the Transactions and the other transactions contemplated hereby. (n) The Lenders shall have received such legal opinions (including opinions (i) from counsel to the Borrower and its subsidiaries, (ii) delivered to Newco by counsel to Concentra, accompanied by reliance letters in favor of the Lenders as reasonable available and (iii) from such special and local counsel as may be required by the Administrative Agent), consultants' reports and opinions and such other documents and instruments as are customary for transactions of this type or as they may reasonably request. On-Going Conditions: The making of each extension of credit shall be conditioned upon (a) the accuracy of all representations and warranties in the Credit Documentation (including, without limitation, the material adverse change and litigation representations) and (b) there being no default or event of default in existence at the time of, or after giving effect to the making of, such extension of credit. As used herein and in the Credit Documentation a "material adverse change" shall mean any event, development or circumstance that has had or could reasonably be expected to have a material adverse affect on (a) the Transactions, (b) the business, property, 6 operations, condition (financial or otherwise) or prospects of the Borrower and its subsidiaries taken as a whole or (c) the validity or enforceability of any of the Credit Documentation. VI. CERTAIN DOCUMENTATION MATTERS The Credit Documentation shall contain representations, warranties, covenants and events of default customary for financings of this type and other terms deemed appropriate by the Lenders, including, without limitation: Representations and Warranties: Financial statements (including pro forma financial statements); absence of material undisclosed liabilities; no material adverse change; corporate existence; compliance with law; corporate power and authority; enforceability of Credit Documentation; no conflict with law or material contractual obligations; no material litigation; no default; ownership of property; liens; intellectual property; no material burdensome restrictions; taxes; Federal Reserve regulations; ERISA; Investment Company Act; subsidiaries; environmental matters; solvency; labor matters; material year 2000 matters; accuracy of disclosure in all material respects; adequacy of insurance; and creation and perfection of security interests. Affirmative Covenants: Delivery of financial statements, reports, accountants' letters, projections, officers' certificates and other information reasonably requested by the Lenders; payment of other material obligations; continuation of business and maintenance of existence and material rights and privileges; compliance with laws and material contractual obligations; maintenance of property and insurance; maintenance of books and records; right of the Lenders to inspect property and books and records; notices of defaults; litigation and other material events; compliance in all material respects with environmental laws; further assurances (including, without limitation, with respect to security interests in after-acquired capital stock); and an agreement by the Borrower to obtain, following the Closing Date, interest rate protection in amounts and on terms satisfactory to the Administrative Agent. Financial Covenants: Financial covenants (including, without limitation, minimum interest and fixed charge coverage and maximum leverage). Negative Covenants: Limitations on (with exceptions to be agreed upon with respect to): indebtedness; liens; guarantee obligations; mergers, consolidations, liquidations and dissolutions; sales of assets; leases; dividends and other payments in respect of capital stock; capital expenditures; investments, loans and advances; optional payments and modifications of subordinated and other debt instruments; transactions with affiliates; sale and leasebacks; changes in fiscal year; negative pledge clauses; changes in lines of business; and changes after the Closing Date in passive holding company status of Concentra. The dividend covenant shall permit dividends to be paid by the Borrower to enable Concentra to pay interest on the Concentra Notes following the fifth anniversary of the Closing Date, subject to the achievement of performance or financial criteria to be determined. 7 Events of Default: Nonpayment of principal when due; nonpayment of interest, fees or other amounts after a grace period to be agreed upon; material inaccuracy of representations and warranties; violation of covenants (subject, in the case of certain affirmative covenants, to a grace period to be agreed upon); cross-default (subject to a threshold to be agreed upon); bankruptcy events; certain ERISA events; material judgments; actual or asserted invalidity of any guarantee or security document, subordination provisions or security interest; and a change of control (the definition of which is to be agreed). Voting: Amendments and waivers with respect to the Credit Documentation shall require the approval of Lenders holding not less than a majority of the aggregate amount of the Credit Facilities, except that (a) the consent of each Lender directly affected thereby shall be required with respect to (i) reductions in the amount or extensions of the scheduled date of amortization or final maturity of any Loan, (ii) reductions in the rate of interest or any fee or extensions of any due date thereof and (iii) increases in the amount or extensions of the expiry date of any Lender's commitment and (b) the consent of 100% of the Lenders shall be required with respect to (i) modifications to any of the voting percentages and (ii) releases of all or substantially all of the Guarantors or all or substantially all of the collateral. Assignments and Participations: The Lenders shall be permitted to assign and sell participations in their Loans and commitments, subject, in the case of assignments (other than to another Lender or to an affiliate of a Lender), to the consent of the Administrative Agent and the Borrower (which consent in each case shall not be unreasonably withheld). Non-pro rata assignments shall be permitted. In the case of partial assignments (other than to another Lender or to an affiliate of a Lender), the minimum assignment amount shall be $5,000,000 unless otherwise agreed by the borrower and the Administrative Agent. Participants shall have the same benefits as the Lenders with respect to yield protection and increased cost provisions. Voting rights of participants shall be limited to those matters with respect to which the affirmative vote of the Lender from which it purchased its participation would be required as described under "Voting" above. Pledges of Loans in accordance with applicable law shall be permitted without restriction. Promissory notes shall be issued under the Credit Facilities only upon request. Yield Protection: The Credit Documentation shall contain customary provisions (a) protecting the Lenders against increased costs or loss of yield resulting from changes in reserve, tax, capital adequacy and other requirements of law and from the imposition of or changes in withholding or other taxes and (b) indemnifying the Lenders for "breakage costs" incurred in connection with, among other things, any prepayment of a Eurodollar Loan on a day other than the last day of an interest period with respect thereto, with the foregoing subject to the right of the Borrower to replace any Lender who has incurred material increased costs. Expenses and Indemnification: The Borrower shall pay (a) all reasonable out-of-pocket expenses of the Administrative Agent and the Co-Lead Arrangers, the Syndication Agent 8 and the Co-Documentation Agents associated with the syndication of the Credit Facilities and the preparation, execution, delivery and administration of the Credit Documentation and any amendment or waiver with respect thereto (including the reasonable fees, disbursements and other charges of counsel) and (b) all out-of-pocket expenses of the Administrative Agent and the Lenders (including the reasonable fees, disbursements and other charges of counsel) in connection with the enforcement of the Credit Documentation. The Administrative Agent, the Co-Lead Arrangers, the Syndication Agent, the Co-Documentation Agents and the Lenders (and their affiliates and there respective officers, directors, employees, advisors and agents) will have no liability for, and will be indemnified and held harmless against, any losses, claims, damages, liabilities or expenses incurred in respect of the financing contemplated hereby or the use or the proposed use of proceeds thereof, except to the extent they are found by a final, non-appealable judgment of a court to arise from the gross negligence or willful misconduct of the indemnified party. Governing Law and Forum: State of New York. Counsel to the Administrative Agent and CSI: Simpson Thacher & Bartlett. 9 ANNEX I INTEREST AND CERTAIN FEES Interest Rate Options: The Borrower may elect that the Loans comprising each borrowing bear interest at a rate per annum equal to: the ABR plus the Applicable Margin; or the Eurodollar Rate plus the Applicable Margin. As used herein: "ABR" means the highest of (i) the rate of interest publicly announced by Chase as its prime rate in effect at its principal office in New York City (the "PRIME RATE") and (ii) the federal funds effective rate from time to time PLUS 0.5%. "APPLICABLE MARGIN" means (a) in the case of ABR Loans (as defined below), 2.25% for Tranche B Term Loans, 2.50% for Tranche C Term Loans, and 1.75% for Revolving Loans, and (b) in the case of Eurodollar Loans (as defined below), 3.25% for Tranche B Term Loans, 3.50% for Tranche C Term Loans, and 2.75% for Revolving Loans. The Applicable Margins for Revolving Loans shall be subject to reduction following the first anniversary of the Closing Date in accordance with a pricing grid based on leverage levels to be determined and provided that no event of default has occurred and is continuing. "EURODOLLAR RATE" means the rate (adjusted for statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits for a period equal to one, two, three or six months (as selected by the Borrower) appearing on Page 3750 of the Dow Jones Markets screen. Interest Payment Dates: In the case of Loans bearing interest based upon the ABR ("ABR Loans"), quarterly in arrears. In the case of Loans bearing interest based upon the Eurodollar Rate ("EURODOLLAR LOANS"), on the last day of each relevant interest period and, in the case of any interest period longer than three months, on each successive date three months after the first day of such interest period. Commitment Fees: The Borrower shall pay a commitment fee calculated at the rate of _ of 1% per annum on the average daily unused portion of the Revolving Facility, payable quarterly in arrears. Letter of Credit Fees: The Borrower shall pay a fee on all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans on the average daily undrawn face amount of each such Letter of Credit. Such fee shall be shared ratably among the Lenders participating in the Revolving Facility and shall be payable quarterly in arrears. 1 A fronting fee equal to 0.125% per annum on the average daily undrawn face amount of each Letter of Credit shall be payable quarterly in arrears to the Issuing Lender for its own account. In addition, customary administrative, issuance, amendment, payment and negotiation charges shall be payable to the Issuing Lender for its own account. Default Rate: At any time when the Borrower is in default in the payment of any amount of principal due under the Credit Facilities, all outstanding Loans shall bear interest at 2% above the rate otherwise applicable thereto. Overdue interest, fees and other amounts shall bear interest at 2% above the rate applicable to ABR Loans. Rate and Fee Basis: All per annum rates shall be calculated on the basis of a year of 360 days (or 365/366 days, in the case of ABR Loans the interest rate payable on which is then based on the Prime Rate) for actual days elapsed. 2 EX-99.A.2 3 ADDITIONAL EXHIBITS EXHIBIT (A)(2) CHASE CAPITAL PARTNERS 380 Madison Avenue, 12th Floor New York, New York 10017 February 24, 1999 Welsh, Carson, Anderson & Stowe 320 Park Avenue Suite 2500 New York, New York 10022 CONCENTRA MANAGED CARE, INC. Ladies and Gentlemen: You have advised Chase Capital Partners (together with one or more of its affiliated investment entities, "CCP") that a group of investors (collectively, the "Investors") led by Welsh, Carson, Anderson & Stowe ("WCAS") intends to effect a leveraged recapitalization (the "Recapitalization") of Concentra Managed Care, Inc. (together with its subsidiaries, the "Company"). We understand that you will form a company ("Newco") that will effect the Recapitalization of the Company. You have also advised us that in connection with the Recapitalization, Newco and the Company will raise gross cash proceeds of approximately $1.1 billion from, among other things, the issuance by the Company of $89,600,000 aggregate principal amount of 10 year pay-in-kind senior unsecured Notes ("PIK Notes"), together with common stock (the "Common Stock" and, together with the PIK Notes, the "Investment"). Based upon what CCP has learned to date in connection with the foregoing, CCP is pleased to advise you of CCP's strong interest to purchase (i) up to fifty percent (50%) of the principal amount of the PIK Notes and (ii) up to $20,000,000 Common Stock of the Company, generally upon the terms and subject to the conditions set forth or referred to in this letter (the "Letter"). We understand that the remainder of the $89,600,000 aggregate principal amount of PIK Notes will be purchased by one or more affiliates of WCAS or other purchasers satisfactory to CCP. We understand that CCP would be acquiring the PIK Notes and Common Stock on the same terms and conditions as WCAS. Our interest in purchasing the PIK Notes and Common Stock is based upon among other things, our understanding that (a) all written reports and other information with respect to Newco, the Company and the Recapitalization (collectively, the "Information"), other than the projections 1 Welsh, Carson, Anderson & Stowe Page 2 contained therein (the "Projections"), that have been or will be made available to CCP by you or any of your representatives are or will be, when furnished, complete and correct in all material respects and do not or will not, when furnished, contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statements are made and (b) the Projections that have been or will be made available to CCP by you or any of your representatives have been or will be prepared in good faith and based upon reasonable assumptions at the time made. We further understand that you will supplement the Information and the Projections from time to time until the date of the issuance of the PIK Notes so that our understanding in the preceding sentence continues to be correct in all material respects. You agree that CCP will be entitled to use and rely primarily on the Information and Projections without responsibility for independent verification thereof. CCP's interest in the Investment is subject to, among other things (a) there not having occurred any material adverse change in the business, assets, operations, properties condition (financial or otherwise), contingent liabilities, prospects or material agreements of Newco or the Company since December 31, 1998, (b) CCP not becoming aware after the date hereof of any information or other matter affecting the Company or the transactions contemplated hereby which is inconsistent in a material and adverse manner with any such information or other matter disclosed to us prior to the date hereof, (c) CCP's reasonable satisfaction in all respects with the structure and all other aspects of the Recapitalization and the other transactions contemplated hereby, including (i) the material terms of all the agreements to be entered into in connection with the Recapitalization, (ii) all legal, tax, financing and accounting matters relating to the Recapitalization and (iii) the capitalization and structure of Newco and the Company after giving effect to the Recapitalization, (d) the approval of CCP's internal investment committee and (e) the negotiation, execution and delivery of definitive documentation with respect to the Investment satisfactory in all respects (including as to the terms of the Investment not covered in this Letter) to CCP and you. This Letter is not intended to be and should not be construed as a commitment with respect to the PIK Notes and the related Warrants or Common Stock or any other financing and creates no obligation or liability on the part of CCP or any of its affiliates to participate in any financing. Any such commitment, obligation or liability will only be created by our execution of a commitment letter or definitive documentation with respect to the Investment. This Letter is delivered to you on the understanding that the existence of this Letter and the terms or substance hereof shall not be disclosed, directly or indirectly, except (a) as may be compelled to be disclosed in a judicial or administrative proceeding or as otherwise required by law (in which case you agree to inform us promptly thereof); (b) on a confidential and "need-to-know" basis, to your officers, directors, employees, agents and advisors (collectively, "Representatives") and the Representatives of the other Investors and the Company who are directly involved in the consideration of this matter; or (c) the board of directors of the Company and their advisors and agents. 2 Welsh, Carson, Anderson & Stowe Page 3 You acknowledge that CCP and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which Newco, the Company, you or your affiliates may have conflicting interests. CCP will not use confidential information obtained from you by virtue of the transactions contemplated by this Letter or its other relationships with you, Newco, or the Company in connection with the performance by CCP or any of its affiliates of services for other companies, and CCP will not furnish any such information to such other companies. You also acknowledge that CCP and its affiliates have no obligation to use in connection with the transactions contemplated by this Letter, or to furnish to you or any of your affiliates, confidential information obtained by CCP or any of its affiliates from other companies. This Letter (and CCP's interest hereunder) shall not be assignable by you without the prior written consent of CCP (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto. This Letter may not be amended or waived except by an instrument in writing signed by you and CCP. This Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Letter by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. This Letter is the only understanding that has been entered into among us with respect to the Investment and sets forth the entire understanding of the parties with respect thereto. This Letter shall be governed by, and construed in accordance with, the laws of the State of New York. CCP is a general partnership with over $6.5 billion under management. CCP's sole limited partner is The Chase Manhattan Corporation, the nation's largest bank holding company with over $360 billion in assets. CCP has invested in more than 700 companies, including management buyouts, growth equity investments, mezzanine debt and equity investments and venture capital transactions. 3 Welsh, Carson, Anderson & Stowe Page 4 CCP is pleased to have been given the opportunity to work with you in connection with the financing for the Recapitalization and we look forward to working with you. Very truly yours, CHASE CAPITAL PARTNERS By: /s/ ERIC GREEN ------------------------- Name: ERIC GREEN ----------------------- Title: MANAGING DIRECTOR ------------------------ EX-99.A.3 4 EXHIBIT (A)(3) EXHIBIT (A)(3) -------------- WCAS CAPITAL PARTNERS III, L.P. 320 PARK AVENUE, SUITE 2500 NEW YORK, NEW YORK 10022 March 1, 1999 Concentra Managed Care, Inc. c/o BT Alex. Brown Incorporated One South Street Baltimore, Maryland 21202 Attention: Brent B. Milner Ladies and Gentlemen: We refer to the letter dated February 26, 1999, from Welsh, Carson, Anderson & Stowe VIII, L.P. ("WCAS VIII"), to you (together with the accompanying exhibits and other related materials, the "Revised Bid Letter"), wherein WCAS VIII offered to acquire (the "Acquisition") the stock of Concentra Managed Care, Inc. ("Concentra"). The Revised Bid Letter contemplates the sale by Concentra of $110.2 million in aggregate principal amount of senior unsecured pay-in-kind notes, and indicates that the undersigned would purchase at least $65.4 million in aggregate principal amount of such notes. This will confirm that, in the event that the balance (of $54.8 million in aggregate principal amount) of such notes is not sold on or prior to the closing date of the Acquisition, the undersigned will purchase any notes not so sold, up to a total purchase of $110.2 million in aggregate principal amount (including the $65.4 million that the undersigned has already committed to purchase), to enable WCAS VIII to consummate the Acquisition and related transactions on substantially the terms set forth in the Revised Bid Letter. Very truly yours, WELSH, CARSON, ANDERSON & STOWE VIII, L.P. By WCAS VIII Associates, L.L.C., its General Partner By /s/ ANDREW M. PAUL -------------------------------------- Managing Member EX-99.C.2 5 EXHIBIT (C)(2) EXHIBIT (C)(2) -------------- WELSH, CARSON, ANDERSON & STOWE VIII, L.P. 320 PARK AVENUE, SUITE 2500 NEW YORK, NEW YORK 10022 March 24, 1999 Yankee Acquisition Corp. c/o Welsh, Carson, Anderson & Stowe VIII, L.P. 320 Park Avenue, Suite 2500 New York, New York 10022 Concentra Managed Care, Inc. c/o BT Alex. Brown Incorporated One South Street Baltimore, Maryland 21202 Attention: Brent B. Milner Ladies and Gentlemen: Reference is made to the Amended and Restated Agreement and Plan of Merger, dated as of the date hereof (the "Agreement"), between Yankee Acquisition Corp. ("Newco") and Concentra Managed Care, Inc. (the "Company"). Capitalized terms used herein and not otherwise defined herein have the meanings given to them in the Agreement. We hold the number of securities (collectively, the "Securities") of the Company reported in our Schedule 13D-1, as amended, filed with the Securities and Exchange Commission with respect to the Company. We agree with Newco and the Company that, if at any time between the date hereof and the Effective Time, Newco shall have any obligations or liabilities, whether under the Agreement or otherwise, that cannot be satisfied out of the assets of Newco, we shall promptly contribute to Newco the number of Securities necessary to satisfy such obligations or liabilities, up to the aggregate number of the Securities we hold (or, if we elect to sell any of the Securities, our obligation to contribute the Securities sold shall be converted into our obligation to contribute to Newco the proceeds from such sale). Any such investment shall reduce by an equal amount our aggregate commitment to invest in Newco. In furtherance of our obligations hereunder, we agree not to sell, transfer, pledge or otherwise dispose of the Securities, except for sales thereof for cash or a contribution of the Securities to Newco as contemplated by the Agreement. Notwithstanding anything that may be expressed or implied in the foregoing provisions of this letter agreement, Newco and the Company, by their acceptance of the benefits hereof, covenant, agree and acknowledge that no Person other than Welsh, Carson, Anderson & Stowe VIII, L.P. ("WCAS VIII"), shall have any obligation hereunder and that, notwithstanding that WCAS VIII is a partnership, no recourse hereunder shall be had against any current or future officer, director, agent or employee of WCAS VIII, against any current or future general or limited partner of WCAS VIII or against any current or future director, officer, employee, general or limited partner, member, affiliate or assignee of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law. Without limiting the generality of the foregoing, it is expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise incurred by any current or future officer, agent or employee of WCAS VIII, any current or future general or limited partner of WCAS VIII or any current or future director, officer, employee, general or limited partner, member, affiliate or assignee of any of the foregoing, as such for any obligations of WCAS VIII under this letter agreement or for any claim based on, in respect of or by reason of such obligations or their creation. WCAS VIII agrees that it shall, and shall cause its affiliates to, vote all shares of Company Common Stock owned by WCAS VIII or any of its affiliates in favor of the adoption of the Agreement. Very truly yours, WELSH, CARSON, ANDERSON & STOWE VIII, L.P. By WCAS VIII Associates, L.L.C., its General Partner By /s/ PAUL B. QUEALLY ----------------------------- Managing Member 2 EX-99.C3 6 EXHIBIT (C)(3) EXHIBIT (C)(3) -------------- STOCK SUBSCRIPTION AGREEMENT ---------------------------- STOCK SUBSCRIPTION AGREEMENT dated as of March 24, 1999 (this "AGREEMENT") by and between, Ferrer Freeman Thompson & Co. ("FFT"), on behalf of Health Care Capital Partners L.P. and as its general partner and on behalf of Health Care Executive Partners L.P. and as its general partner (collectively, "BUYERS"), and Yankee Acquisition Corp., a Delaware corporation ("NEWCO"). RECITALS: --------- Newco and Concentra Managed Care, Inc., a Delaware corporation ("CONCENTRA"), are parties to an Agreement and Plan of Merger dated as of March 2, 1999, and amended and restated as of the date hereof (as so amended, the "MERGER AGREEMENT"), pursuant to which, upon the terms and subject to the conditions set forth therein, (i) Newco will merge with and into Concentra (the "MERGER"), (ii) each outstanding share of common stock, par value $0.01 per share ("CONCENTRA COMMON STOCK"), of Concentra outstanding immediately prior to the Merger (other than shares of Concentra Common Stock owned by Concentra or Newco or their affiliates) will be converted into the right to receive $16.50 per share in cash, without interest, (iii) each outstanding share of common stock, par value $0.01 per share ("NEWCO COMMON STOCK"), of Newco will be converted into one share of Concentra Common Stock and (iv) each outstanding share of Class A common stock, par value $0.01 per share ("NEWCO CLASS A COMMON STOCK"), of Newco will be converted into one share of Class A common stock, par value $0.01 per share ("CONCENTRA CLASS A COMMON STOCK"), of Concentra. All of the issued and outstanding Newco Common Stock is currently owned by Welsh, Carson, Anderson & Stowe VIII, L.P. ("WCAS"). Newco desires to issue and sell newly issued shares of Newco Class A Common Stock to Buyers upon the terms and subject to the conditions hereinafter set forth. Buyers have conditioned its purchase of the shares of Newco Class A Common Stock to be purchased by it hereunder on Newco making certain representations and warranties to it hereunder and, in order to induce Buyers to purchase such shares and in connection with the transactions contemplated to occur on the Closing Date (as defined below), including the Merger, Newco is willing to make such representations and warranties. AGREEMENT --------- NOW, THEREFORE, the parties hereto agree as follows: ARTICLE PURCHASE AND SALE ----------------- Section 1.1 PURCHASE AND SALE. Upon the terms and subject to the conditions of this Agreement, Newco agrees to issue and sell to each Buyer, and each Buyer agrees to purchase from Newco, the number of shares of newly issued Newco Class A Common Stock (collectively, the "PURCHASE STOCK") set forth opposite its name on Schedule I hereto. The purchase price for the Purchase Stock is $16.50 per share (the "PER SHARE PURCHASE Price") and the aggregate purchase price for all the Purchase Stock is $30,599,993 (the "AGGREGATE PURCHASE Price"). Section 2.1 CLOSING. The closing (the "CLOSING") of the purchase and sale of the Purchase Stock hereunder shall take place at the offices of Reboul, MacMurray, Hewitt, Maynard & Kristol, 45 Rockefeller Plaza, New York, New York, immediately prior to the consummation of the Merger. At the Closing, (a) FFT, on behalf of each Buyer, shall deliver to Newco, in immediately available funds, the Aggregate Purchase Price by wire transfer to an account designated by Newco not later than one business day prior to the date of the Closing (the "CLOSING DATE") and (b) Newco shall deliver to each Buyer, certificates for such Buyer's Purchase Stock, duly registered in the names of each Buyer. ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF NEWCO --------------------------------------- Newco represents and warrants to Buyers as of the date hereof that: Section 2.1 CORPORATE EXISTENCE AND POWER: NEWLY FORMED CORPORATION. Newco is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Newco was incorporated solely for the purpose of effectuating the transactions contemplated in the Merger Agreement (including the transactions contemplated by this Agreement) and has not conducted any business or entered into any agreements or commitments except with respect to the foregoing. Section 2.2 AUTHORIZATION. The execution, delivery and performance by Newco of this Agreement and the Merger Agreement and the consummation of the transactions contemplated hereby and thereby are within Newco's corporate powers and have been duly authorized by all necessary corporate action on the part of Newco. Each of this Agreement and the Merger Agreement has been duly executed and delivered by Newco. Each of this Agreement and the Merger Agreement constitutes a valid and binding agreement of Newco, enforceable against Newco in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement or creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) with respect to provisions relating to indemnification arid contribution, as limited by considerations of public policy. 2 Section 2.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and performance by Newco of this Agreement and the Merger Agreement require no order, license, consent, authorization or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official except for (i) filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), (ii) the filing with the Securities and Exchange Commission (the "SEC") of such reports under and such other compliance with the Securities Exchange Act of 1934, as amended (the "EXCHANGE Act"), and the rules and regulations thereunder as may be required in connection with the Merger Agreement, this Agreement and the transactions contemplated thereby and hereby, (iii) the filing of a certificate of merger with the Secretary of State of the State of Delaware, (iv) such filings and approvals as may be required by any applicable state securities "blue sky" or takeover laws, (v) such as have been obtained, or (vi) except where the failure to obtain any such order, license, consent, authorization, approval or exemption or give any such notice or make any filing or registration would not reasonably be expected to adversely affect the ability of Newco to perform its obligations hereunder or thereunder. Section 2.4 NONCONTRAVENTION. The execution, delivery and performance by Newco of this Agreement and the Merger Agreement do not and will not (i) violate the certificate of incorporation or bylaws of Newco, (ii) violate any law, rule, regulation, judgment, injunction, order or decree applicable to or binding upon Newco, (iii) require any consent or other action by any person under, constitute a default under (with due notice or lapse of time or both), or give rise to any right of termination, cancellation or acceleration of any right or obligation of Newco or to a loss of any benefit to which Newco is entitled under any provision of any agreement or other instrument binding upon Newco or any of its assets or properties or (iv) result in the creation or imposition of any material mortgage, lien, pledge, charge, security interest or encumbrance (each, a "LIEN") on any property or asset of Newco. Section 2.5 CAPITALIZATION. The authorized capital stock of Newco consists of 105,000,000 shares of Newco Common Stock, 20,000,000 shares of preferred stock, par value $0.01 per share and 5,000,000 shares of Newco Class A Common Stock. Immediately prior to the Closing, the outstanding capital stock of Newco will be 10 shares of Newco Common Stock and no shares of preferred stock. Immediately prior to the Closing, WCAS will own all of the issued and outstanding shares of capital stock of Newco. Immediately after the Closing, but prior to the effective time of the Merger, the outstanding capital stock of Newco, will be 23,742,187 shares of Newco Common Stock, 1,854,545 shares of Newco Class A Common Stock and no shares of preferred stock. Except as set forth in this Section 2.5 or on Schedule 2.5 there are, and immediately after the Closing but prior to the Merger there will be, no outstanding (i) shares of capital stock or voting securities of Newco, (ii) securities of Newco convertible into or exchangeable for shares of capital stock or voting securities of Newco, (iii) options or other rights to acquire from Newco, or other obligation of Newco to issue any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Newco or (iv) obligation of Newco to repurchase or otherwise acquire or retire any 3 shares of capital stock or any convertible securities, rights or options of the type described in clause (i), (ii), or (iii). The Newco Class A Common Stock shall have the rights and other terms set forth in the Amended and Restated Charter of Newco attached hereto as Exhibit A. Section 2.6 LITIGATION. Except as set forth on Schedule 2.6 hereto, there is no action, suit, investigation or proceeding pending against, or to the knowledge of Newco, threatened against or affecting Newco before any court or arbitrator or any governmental body, agency or official which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement or the Merger Agreement or which would reasonably be expected to have a material adverse effect on the ability of Newco to perform its obligations under this Agreement or the Merger Agreement or to consummate the Merger or on the business, properties, financial condition or results of operations of Concentra after the Merger. Section 2.7 VALID ISSUANCE OF SECURITIES. The shares of Purchase Stock which are being issued to Buyers hereunder have been duly and validly authorized and when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be fully paid and nonassessable. ARTICLE 3 REPRESENTATION AND WARRANTIES OF BUYERS --------------------------------------- Each Buyer represents and warrants to Newco as of the date hereof that: Section 3.1 EXISTENCE AND POWER. Such Buyer is a corporation, limited partnership or limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Section 3.2 AUTHORIZATION. The execution, delivery and performance by such Buyer of this Agreement and the consummation of the transactions contemplated hereby are within its corporate, partnership or limited liability company, as the case may be, powers and have been duly authorized by all necessary action on the part of such Buyer. This Agreement has been duly executed and delivered by such Buyer. This Agreement constitutes a valid and binding agreement of such Buyer, enforceable against such Buyer in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement or creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) with respect to provisions relating to indemnification and contribution, as limited by considerations of public policy. 4 Section 3.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and performance by such Buyer of this Agreement require no order, license, consent, authorization or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official except such as have been obtained or except for (i) filings under the HSR Act, (ii) such filings and approvals as may be required by any applicable state securities "blue sky" laws, (iii) such as have been obtained, or (iv) where the failure to obtain any such order, license, consent, authorization, approval or exemption or give any such notice or make any filing or registration would not reasonably be expected to adversely affect the ability of such Buyer to perform its obligations hereunder. Section 3.4 NONCONTRAVENTION. The execution, delivery and performance by such Buyer of this Agreement do not and will not (i) violate, if such Buyer is a corporation, the certificate of incorporation or bylaws of such Buyer, if such Buyer is a limited partnership, the certificate of limited partnership or agreement of limited partnership of such Buyer, or, if such Buyer is a limited liability company, the certificate of formation or limited liability company agreement of such Buyer, (ii) violate any law, rule, regulation, judgment, injunction, order or decree applicable to or binding upon such Buyer, (iii) require any consent or other action by any person under, constitute a default under (with due notice or lapse of time or both), or give rise to any right of termination, cancellation or acceleration of any right or obligation of such Buyer or to a loss of any benefit to which such Buyer is entitled under any provision of any agreement or other instrument binding upon such Buyer or any of its assets or properties or (iv) result in the creation or imposition of any material Lien on any property or asset of such Buyer. Section 3.5 PURCHASE FOR INVESTMENT. Such Buyer is purchasing its Purchase Stock for investment for its own account and not with a view to, or for sale in connection with, any distribution thereof. Section 3.6 PRIVATE PLACEMENT. () Such Buyer's financial situation is such that such Buyer can afford to bear the economic risk of holding its Purchase Stock for an indefinite period of time, and such Buyer can afford to suffer the complete loss of the investment in its Purchase Stock. (b) Such Buyer's knowledge and experience in financial and business matters are such that it is capable of evaluating the merits and risks of the investment in its Purchase Stock or such Buyer has been advised by a representative possessing such knowledge and experience. (c) Such Buyer understands that the Purchase Stock acquired hereunder is a speculative investment which involves a high degree of risk of loss of the entire investment therein, that there will be substantial restrictions on the transferability of the Purchase Stock and that for an indefinite period following the date hereof there will be no public market for the Purchase Stock and that, accordingly, it may not be possible for such Buyer to sell the Purchase Stock in case of emergency or otherwise. 5 (d) Such Buyer and its representatives, including, to the extent it deems appropriate, its professional, financial, tax and other advisors, have reviewed all documents provided to them in connection with the investment in the Purchase Stock, and such Buyer understands and is aware of the risks related to such investment. (e) Such Buyer and its representatives have been given the opportunity to examine all documents and to ask questions of, and to receive answers from, Newco, Concentra and their respective representatives concerning the terms and conditions of the acquisition of the Purchase Stock and related matters and to obtain all additional information which such Buyer or its representatives deem necessary. (f) Such Buyer is an "ACCREDITED INVESTOR" as such term is defined in Regulation D under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. Section 3.7 LITIGATION. There is no action, suit, investigation or proceeding pending against, or to the knowledge of such Buyer threatened against or affecting, such Buyer before any court or arbitrator or any governmental body, agency or official which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement. Section 3.8 BROKERS OR FINDERS' FEES. There is no investment banker, broker, finder or other intermediary which has been retained by, will be retained by or is authorized to act on behalf of such Buyer who might be entitled to any fee or commission from Concentra, Newco or such Buyer upon consummation of the transactions contemplated by this Agreement. ARTICLE 4 COVENANTS OF NEWCO AND BUYERS ----------------------------- Section 4.1 STOCKHOLDERS' AND REGISTRATION RIGHTS AGREEMENT. Newco and each Buyer agree that they shall use their reasonable best efforts to enter into a stockholders' agreement and a registration rights agreement (the "ANCILLARY AGREEMENTS") containing the terms set forth on Schedule 4.1. Section 4.2 FURTHER ASSURANCES. Newco and each Buyer agree that, from time to time, whether on or after the Closing Date, each of them will execute and deliver such further instruments of conveyance and transfer and take such other actions as may be necessary to carry out the purposes and intents of this Agreement. ARTICLE 5 CONDITIONS TO CLOSING --------------------- 6 Section 5.1 CONDITIONS TO OBLIGATIONS OF BUYERS AND NEWCO. The obligations of Buyers and Newco to consummate the transactions contemplated hereby are subject to the satisfaction of the following conditions: (a) No provision of any applicable law, rule or regulation and no judgment, injunction, order or decree by any governmental entity of competent jurisdiction shall prohibit the consummation of the Closing or the Merger. (b) All material actions by or in respect of, or filings with, any governmental body, agency, official or authority required to permit the consummation of the Closing shall have been taken, made or obtained. (c) Newco shall have received an equity contribution of at least $346,900,000 from WCAS and affiliated investors. (d) The conditions to the consummation of the Merger set forth in Article 6 of the Merger Agreement, other than those to be satisfied at the effective time of the Merger, shall have been satisfied or waived. Section 5.2 CONDITIONS TO OBLIGATIONS OF BUYERS. The obligation of each Buyer to consummate the transactions contemplated hereby is subject to the satisfaction of the following further conditions: (a) (i) Newco shall have performed in all material respects all of its obligations hereunder required to be performed by it on or prior to the Closing Date and (ii) the representations and warranties of Newco contained in this Agreement shall be true in all material respects when made and at and as of the Closing Date, as if made at and as of such date. (b) Each of Concentra and WCAS shall have executed and delivered the Ancillary Agreements on terms consistent with Section 4.1 hereof and reasonably satisfactory to FFT, on behalf of Buyers. (c) Newco shall not have waived any of the conditions to the Merger contained in Sections 6.1 or 6.3 of the Merger Agreement nor have altered, amended or modified the Merger Agreement without the prior consent of FFT, on behalf of Buyers, which consent shall not be unreasonably withheld. (d) Arrangements for equity participation, in the surviving corporation of the Merger, by management of Concentra shall be reasonably acceptable to FFT, on behalf of Buyers. 7 (e) FFT, on behalf of Buyers, shall have received all documents it may reasonably request relating to the existence of Newco and the authority of Newco for this Agreement, all in form and substance reasonably satisfactory to FFT, on behalf of Buyers. Section 5.3 CONDITIONS TO OBLIGATION OF NEWCO. The obligation of Newco to consummate the transactions contemplated hereby is subject to the satisfaction of the following further conditions: (a) (i) Each Buyer shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Closing Date and (ii) the representations and warranties of such Buyer contained in this Agreement shall be true in all material respects when made and at and as of the Closing Date, as if made at and as of such date. (b) Each Buyer and Concentra shall have executed and delivered the Ancillary Agreements on terms consistent with Section 4.1 hereof and reasonably satisfactory to Newco. ARTICLE 6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES: INDEMNIFICATION ----------------------------------------------------------- Section 6.1 SURVIVAL. Except for the representations and warranties contained in Sections 2.5 and 2.7, which shall survive indefinitely, the representations and warranties of the parties hereto contained in this Agreement shall survive the Closing until twelve months after the Closing Date, and thereafter shall terminate and be of no further force or effect. Section 6.2 INDEMNIFICATION. () Newco hereby indemnifies, severally and not jointly, each Buyer and its affiliates, limited partners, general partners, directors, officers and employees against and agrees to hold each of them harmless from any and all damage, loss, liability and expense (including, without limitation, reasonable expenses of investigation and reasonable attorneys' fees and expenses in connection with any action, suit or proceeding) ("DAMAGES") incurred or suffered by any such party arising out of any misrepresentation or breach of warranty, covenant or agreement made or to be performed by Newco pursuant to this Agreement; PROVIDED that with respect to any Buyer, (i) Newco shall not be liable under this Section 6.2(a) unless the aggregate amount of Damages with respect to all matters referred to in this Section 6.2(a) for which such Buyer has sought indemnification exceeds $100,000 and then only to the extent of such excess and (ii) the indemnifying parties' aggregate maximum liability under this Section 6.2(a) shall not exceed the amount of the Aggregate Purchase Price paid by such Buyer to Newco. 8 (b) Each Buyer hereby indemnifies, severally and not jointly, Newco and its affiliates, limited partners, general partners, directors, officers and employees against and agrees to hold each of them harmless from any and all Damages incurred or suffered by any such party arising out of any misrepresentation or breach of warranty, covenant or agreement made or to be performed by such Buyer pursuant to this Agreement; PROVIDED that (i) such Buyer shall not be liable under this Section 6.2(b) unless the aggregate amount of Damages with respect to all matters referred to in this Section 6.2(b) exceeds $100,000 and then only to the extent of such excess and (ii) such Buyer's maximum liability under this Section 6.2(b) shall not exceed the amount of Aggregate Purchase Price paid by such Buyer to Newco. Section 6.3 EXCLUSIVITY. After the Closing, Section 6.2 will provide the exclusive remedy for any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the transactions contemplated hereby. ARTICLE 7 TERMINATION Section 7.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at any time prior to the Closing: (a) by mutual written agreement of Newco and FFT, on behalf of Buyers; (b) by either Newco, on the one hand, or FFT, on behalf of Buyers, on the other hand, if the Closing, shall not have been consummated as of the close of business on August 31, 1999, PROVIDED that the right to terminate this Agreement under this Section 7.1(b) shall not be available to any party whose breach of any obligation under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date; or (c) by Newco, on the one hand, or FFT, on behalf of Buyers, on the other hand, if consummation of the transactions contemplated hereby would violate any non-appealable final order, decree or judgment of any court or governmental body having competent jurisdiction. Section 7.2 EFFECT OF TERMINATION. If this Agreement is terminated as permitted by Section 7.1, such termination shall be without liability of any party (or any stockholder, general partner, limited partner, member, director, officer, employee, agent, consultant or representative of such party) to any of the other parties to this Agreement and this Agreement shall become void and of no further force or effect; PROVIDED that if such termination shall result from the willful (i) failure of either party to fulfill a condition to the performance of the obligations of the other party, (ii) failure to perform a covenant of this Agreement or (iii) 9 material breach by either party hereto of any representation or warranty or agreement contained herein, such party shall be liable for such breach prior to such termination. Notwithstanding the foregoing, the provisions of Sections 8.3, 8.5, 8.6 and 8.7 shall survive any termination hereof pursuant to Section 7.1. Section 7.3 RESCISSION. If the Closing shall occur but the Merger shall not have been consummated by the close of business on the third business day following the Closing, then the purchase and sale of the Purchase Stock shall be rescinded, Newco shall return to Buyers the Aggregate Purchase Price paid by them for the Purchase Stock and Buyers shall return to Newco the certificates representing the Purchase Stock. Upon any such rescission, the parties hereto shall be treated for all purposes as if the Closing had not occurred, including without limitation with respect to rights to terminate this Agreement as provided in Section 7.1. ARTICLE 8 MISCELLANEOUS Section 8.1 NOTICES. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given: if to Newco, to: Yankee Acquisition Corp. c/o Welsh, Carson, Anderson & Stowe, VIII L.P 320 Park Avenue, Suite 2500 New York, New York 10022 Attention: Paul B. Queally Fax: (212) 893-9566 with a copy to: Reboul, MacMurray, Hewitt, Maynard & Kristol 45 Rockefeller Plaza New York, New York 10111 Attention: Othon A. Prounis Fax: (212) 841-5725 if to any Buyer, to it: c/o Ferrer Freeman Thompson & Co. The Mill 10 10 Glenville Street Greenwich, Conncecticut 06831 Attention: Carlos Ferrer Fax: (203) 532-8016 with a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: David Golay Fax: (212) 859-8164 or to such other address or telecopy number and with such other copies as such party may hereafter specify for the purpose of notice. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt. Section . AMENDMENTS AND WAIVERS. () Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and signed in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. () No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Section 8.3 EXPENSES. () All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense, except that if the Closing shall occur, Newco shall reimburse Buyers for all documented out-of-pocket expenses incurred by them, including, without limitation, the reasonable fees and expenses of one counsel for all Buyers, up to, but not in excess of, $100,000 in the aggregate for all such expenses. (b) In the event that Newco receives the Company Termination Fee (as defined in the Merger Agreement) from Concentra, Buyers will be entitled to (i) a portion thereof (the "PRO RATA PORTION") calculated by multiplying the amount of the Company Termination Fee less the portions of the Termination Fee payable to the entities set forth on Schedule 5.4(b) of the Merger Agreement by a fraction the numerator of which is the total number of 11 shares set forth on Schedule 1 and the denominator of which is the total number of shares of Concentra Common Stock and Concentra Class A Common Stock expected to be outstanding immediately after the Merger as set forth in Section 2.5 hereof and (ii) reimbursement for all its fees and expenses to the extent recoverable from Concentra pursuant to Section 5.3 of the Merger Agreement and the Pro Rata Portion of its fees and expenses actually reimbursed by Concentra to the extent the total amount of fees and expenses recoverable from Concentra pursuant to Section 5.3 of the Merger Agreement exceeds the limitations provided therein. Section 8.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding upon any inure to the benefit of the parties hereto and their respective successors and assigns, PROVIDED that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto (it being agreed that a merger (including the Merger) shall not be deemed an assignment requiring the consent of Buyers). Notwithstanding the foregoing, Buyers may assign their rights under this Agreement or the right to receive any of the Purchased Shares under this Agreement to any general or limited partner of Buyers or FFT or any affiliates (as defined in Rule 405 promulgated under the Securities Act) of Buyers or FFT (collectively, the "FFT PARTIES" and each an "FFT PARTY"), who are reasonably acceptable to Newco; PROVIDED that any such FFT Party executes an assumption agreement reasonably satisfactory in form and substance to Newco whereby such FFT Party makes certain representations and warranties as set forth in this Agreement and agrees to be bound, to the same extent as its transferor, by the terms of this Agreement. Section 8.5 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the law of the State of New York. Section 8.6 JURISDICTION. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may only be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 9.1 shall be deemed effective service of process on such party. Section 8.7 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 12 Section 8.8 COUNTERPARTS; THIRD PARTY BENEFICIARIES. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. No provision of this Agreement shall confer upon any person other than the parties hereto any rights or remedies hereunder. Section 8.9 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement. Section 8.10 CAPTIONS. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. Section 8.11 SEVERABILITY. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be deemed to be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforced in accordance with its terms to the maximum extent permitted by law. Section 8.12 INTERPRETATION. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 13 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. YANKEE ACQUISITION CORP. By: /s/ PAUL B. QUEALLY ------------------------------------ Name: Paul B. Queally Title: President FERRER FREEMAN THOMPSON & CO., LLC. on behalf of HEALTH CARE CAPITAL PARTNERS L.P. and as its General Partner and on behalf of HEALTH CARE EXECUTIVE PARTNERS L.P. and as its General Partner By: /s/ ROBERT T. THOMPSON ------------------------------------- Name: Robert T. Thompson Title: Member 14 EX-99.1 7 EXHIBIT 99.1 EXHIBIT 99.1 ------------ POWER OF ATTORNEY FOR EXECUTING SCHEDULE 13E-3 Know all by these presents, that the undersigned hereby constitutes and appoints each of James M. Greenwood, Richard A. Parr II and Daniel J. Thomas the undersigned's true and lawful attorney-in-fact to: (1) execute for and on behalf of the undersigned a Schedule 13E-3 (including amendments thereto) in accordance with Section 13(e) of the Securities Exchange Act of 1934 and the rules thereunder; (2) do and perform any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such Schedule 13E-3 (including amendments thereto) and file that Schedule with the Securities and Exchange Commission and any other authority; and (3) take any other action of any type whatsoever in connection with the foregoing that, in the opinion of any such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion. The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that any such attorney-in-fact shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that each attorney-in-fact, in serving in such capacity at the request of the undersigned, is not assuming any of the undersigned's responsibilities to comply with Section 13 of the Securities Exchange Act of 1934. The undersigned agrees that each attorney-in-fact may rely entirely on information furnished orally or in writing by the undersigned to the attorney-in-fact. This Power of Attorney shall remain in full force and effect until the undersigned has filed such Schedule 13E-3 (including amendments thereto), unless earlier revoked by the undersigned in a signed writing delivered to each attorney-in-fact. This Power of Attorney does not revoke any other power of attorney that the undersigned has previously granted. IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed effective as of the date written below. /s/ JAMES M. GREENWOOD --------------------------------- Signature JAMES M. GREENWOOD --------------------------------- Type or Print Name MAY 28, 1999 -------------------------------- Date POWER OF ATTORNEY FOR EXECUTING SCHEDULE 13E-3 Know all by these presents, that the undersigned hereby constitutes and appoints each of James M. Greenwood, Richard A. Parr II and Daniel J. Thomas the undersigned's true and lawful attorney-in-fact to: (1) execute for and on behalf of the undersigned a Schedule 13E-3 (including amendments thereto) in accordance with Section 13(e) of the Securities Exchange Act of 1934 and the rules thereunder; (2) do and perform any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such Schedule 13E-3 (including amendments thereto) and file that Schedule with the Securities and Exchange Commission and any other authority; and (3) take any other action of any type whatsoever in connection with the foregoing that, in the opinion of any such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion. The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that any such attorney-in-fact shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that each attorney-in-fact, in serving in such capacity at the request of the undersigned, is not assuming any of the undersigned's responsibilities to comply with Section 13 of the Securities Exchange Act of 1934. The undersigned agrees that each attorney-in-fact may rely entirely on information furnished orally or in writing by the undersigned to the attorney-in-fact. This Power of Attorney shall remain in full force and effect until the undersigned has filed such Schedule 13E-3 (including amendments thereto), unless earlier revoked by the undersigned in a signed writing delivered to each attorney-in-fact. This Power of Attorney does not revoke any other power of attorney that the undersigned has previously granted. IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed effective as of the date written below. /s/ RICHARD A. PARR II ----------------------------------------- Signature RICHARD A. PARR II ----------------------------------------- Type or Print Name MAY 28, 1999 ----------------------------------------- Date POWER OF ATTORNEY FOR EXECUTING SCHEDULE 13E-3 Know all by these presents, that the undersigned hereby constitutes and appoints each of James M. Greenwood, Richard A. Parr II and Daniel J. Thomas the undersigned's true and lawful attorney-in-fact to: (1) execute for and on behalf of the undersigned a Schedule 13E-3 (including amendments thereto) in accordance with Section 13(e) of the Securities Exchange Act of 1934 and the rules thereunder; (2) do and perform any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such Schedule 13E-3 (including amendments thereto) and file that Schedule with the Securities and Exchange Commission and any other authority; and (3) take any other action of any type whatsoever in connection with the foregoing that, in the opinion of any such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion. The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that any such attorney-in-fact shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that each attorney-in-fact, in serving in such capacity at the request of the undersigned, is not assuming any of the undersigned's responsibilities to comply with Section 13 of the Securities Exchange Act of 1934. The undersigned agrees that each attorney-in-fact may rely entirely on information furnished orally or in writing by the undersigned to the attorney-in-fact. This Power of Attorney shall remain in full force and effect until the undersigned has filed such Schedule 13E-3 (including amendments thereto), unless earlier revoked by the undersigned in a signed writing delivered to each attorney-in-fact. This Power of Attorney does not revoke any other power of attorney that the undersigned has previously granted. IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed effective as of the date written below. /s/ DANIEL J. THOMAS ----------------------------------------- Signature DANIEL J. THOMAS ----------------------------------------- Type or Print Name MAY 28, 1999 ----------------------------------------- Date POWER OF ATTORNEY FOR EXECUTING SCHEDULE 13E-3 Know all by these presents, that the undersigned hereby constitutes and appoints each of James M. Greenwood, Richard A. Parr II and Daniel J. Thomas the undersigned's true and lawful attorney-in-fact to: (1) execute for and on behalf of the undersigned a Schedule 13E-3 (including amendments thereto) in accordance with Section 13(e) of the Securities Exchange Act of 1934 and the rules thereunder; (2) do and perform any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such Schedule 13E-3 (including amendments thereto) and file that Schedule with the Securities and Exchange Commission and any other authority; and (3) take any other action of any type whatsoever in connection with the foregoing that, in the opinion of any such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion. The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that any such attorney-in-fact shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that each attorney-in-fact, in serving in such capacity at the request of the undersigned, is not assuming any of the undersigned's responsibilities to comply with Section 13 of the Securities Exchange Act of 1934. The undersigned agrees that each attorney-in-fact may rely entirely on information furnished orally or in writing by the undersigned to the attorney-in-fact. This Power of Attorney shall remain in full force and effect until the undersigned has filed such Schedule 13E-3 (including amendments thereto), unless earlier revoked by the undersigned in a signed writing delivered to each attorney-in-fact. This Power of Attorney does not revoke any other power of attorney that the undersigned has previously granted. IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed effective as of the date written below. /s/ JOHN K. CARLYLE -------------------------------------- Signature JOHN K. CARLYLE -------------------------------------- Type or Print Name MAY 28, 1999 -------------------------------------- Date POWER OF ATTORNEY FOR EXECUTING SCHEDULE 13E-3 Know all by these presents, that the undersigned hereby constitutes and appoints each of James M. Greenwood, Richard A. Parr II and Daniel J. Thomas the undersigned's true and lawful attorney-in-fact to: (1) execute for and on behalf of the undersigned a Schedule 13E-3 (including amendments thereto) in accordance with Section 13(e) of the Securities Exchange Act of 1934 and the rules thereunder; (2) do and perform any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such Schedule 13E-3 (including amendments thereto) and file that Schedule with the Securities and Exchange Commission and any other authority; and (3) take any other action of any type whatsoever in connection with the foregoing that, in the opinion of any such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion. The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that any such attorney-in-fact shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that each attorney-in-fact, in serving in such capacity at the request of the undersigned, is not assuming any of the undersigned's responsibilities to comply with Section 13 of the Securities Exchange Act of 1934. The undersigned agrees that each attorney-in-fact may rely entirely on information furnished orally or in writing by the undersigned to the attorney-in-fact. This Power of Attorney shall remain in full force and effect until the undersigned has filed such Schedule 13E-3 (including amendments thereto), unless earlier revoked by the undersigned in a signed writing delivered to each attorney-in-fact. This Power of Attorney does not revoke any other power of attorney that the undersigned has previously granted. IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed effective as of the date written below. /s/ W. TOM FOGARTY, M.D. -------------------------------------- Signature W. TOM FOGARTY, M.D. -------------------------------------- Type or Print Name MAY 28, 1999 -------------------------------------- Date POWER OF ATTORNEY FOR EXECUTING SCHEDULE 13E-3 Know all by these presents, that the undersigned hereby constitutes and appoints each of James M. Greenwood, Richard A. Parr II and Daniel J. Thomas the undersigned's true and lawful attorney-in-fact to: (1) execute for and on behalf of the undersigned a Schedule 13E-3 (including amendments thereto) in accordance with Section 13(e) of the Securities Exchange Act of 1934 and the rules thereunder; (2) do and perform any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such Schedule 13E-3 (including amendments thereto) and file that Schedule with the Securities and Exchange Commission and any other authority; and (3) take any other action of any type whatsoever in connection with the foregoing that, in the opinion of any such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion. The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that any such attorney-in-fact shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that each attorney-in-fact, in serving in such capacity at the request of the undersigned, is not assuming any of the undersigned's responsibilities to comply with Section 13 of the Securities Exchange Act of 1934. The undersigned agrees that each attorney-in-fact may rely entirely on information furnished orally or in writing by the undersigned to the attorney-in-fact. This Power of Attorney shall remain in full force and effect until the undersigned has filed such Schedule 13E-3 (including amendments thereto), unless earlier revoked by the undersigned in a signed writing delivered to each attorney-in-fact. This Power of Attorney does not revoke any other power of attorney that the undersigned has previously granted. IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed effective as of the date written below. /s/ KENNETH LOFFREDO -------------------------------------- Signature KENNETH LOFFREDO -------------------------------------- Type or Print Name MAY 28, 1999 -------------------------------------- Date POWER OF ATTORNEY FOR EXECUTING SCHEDULE 13E-3 Know all by these presents, that the undersigned hereby constitutes and appoints each of James M. Greenwood, Richard A. Parr II and Daniel J. Thomas the undersigned's true and lawful attorney-in-fact to: (1) execute for and on behalf of the undersigned a Schedule 13E-3 (including amendments thereto) in accordance with Section 13(e) of the Securities Exchange Act of 1934 and the rules thereunder; (2) do and perform any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such Schedule 13E-3 (including amendments thereto) and file that Schedule with the Securities and Exchange Commission and any other authority; and (3) take any other action of any type whatsoever in connection with the foregoing that, in the opinion of any such attorney-in-fact, may be of benefit to, in the best interest of, or legally required of the undersigned, it being understood that the documents executed by the attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as the attorney-in-fact may approve in the attorney-in-fact's discretion. The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform all and every act and thing whatsoever requisite, necessary or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that any such attorney-in-fact shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that each attorney-in-fact, in serving in such capacity at the request of the undersigned, is not assuming any of the undersigned's responsibilities to comply with Section 13 of the Securities Exchange Act of 1934. The undersigned agrees that each attorney-in-fact may rely entirely on information furnished orally or in writing by the undersigned to the attorney-in-fact. This Power of Attorney shall remain in full force and effect until the undersigned has filed such Schedule 13E-3 (including amendments thereto), unless earlier revoked by the undersigned in a signed writing delivered to each attorney-in-fact. This Power of Attorney does not revoke any other power of attorney that the undersigned has previously granted. IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed effective as of the date written below. /s/ THOMAS E. KIRALY -------------------------------------- Signature THOMAS E. KIRALY -------------------------------------- Type or Print Name MAY 28, 1999 -------------------------------------- Date -----END PRIVACY-ENHANCED MESSAGE-----