1
EXHIBIT 10.41
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement") is entered into as of
August 16, 1996, between Park Hospital GmbH, a German corporation (the
"Shareholder"), and Xxxxxxxxxx Healthcare Corp., a California corporation
("Xxxxxxxxxx").
WHEREAS, Xxxxxxxxxx, Champion Healthcare Corporation, a Delaware
corporation ("Champion"), and PC Merger Sub, Inc., a Delaware corporation
("Merger Sub"), have entered into an Agreement and Plan of Merger, dated as of
April 12, 1996, as amended and restated as of May 29, 1996 (as so amended and
restated the "Merger Agreement"), providing for, among other things, the merger
(the "Merger") of Merger Sub with and into Champion pursuant to the terms and
conditions of the Merger Agreement, and setting forth certain representations,
warranties, covenants and agreements of the parties thereto in connection with
the Merger; and
WHEREAS, upon consummation of the Merger, the Shareholder will
continue to Beneficially Own Voting Securities of Xxxxxxxxxx constituting a
majority of the Total Voting Power of Xxxxxxxxxx;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Certain Definitions. (a) For the purposes of this Agreement, the
following terms shall have the following meanings:
"Affiliate" and "Associate" when used with reference to any Person
shall have the meanings assigned to such terms in Rule 12(b)-2 of the Exchange
Act as in effect on the date hereof; provided, that Xxxxxxxxxx and its
Subsidiaries and existing directors and executive officers of Champion and
Xxxxxxxxxx who become and remain directors and executive officers of Xxxxxxxxxx
shall not, solely as a result of holding such office, be deemed Affiliates or
Associates of any Investor for purposes of this Agreement.
"Acquisition Proposal" shall mean any bona fide offer or proposal for
(i) a merger or other business combination (other than a Surviving Company
Merger) involving Xxxxxxxxxx, (ii) the acquisition of any Voting Securities
representing more than 50% of the Total Voting Power of Xxxxxxxxxx after giving
effect to such Acquisition Proposal or (iii) the acquisition of all or
substantially all of the assets of Xxxxxxxxxx.
"Approved Acquisition Proposal" shall mean an Acquisition Proposal
that is approved and recommended (and, immediately prior to consummation of
such Acquisition Proposal, that continues to be recommended) by a vote of 75%
of the entire Board and by a majority of the Independent Directors.
A Person shall be deemed the "Beneficial Owner" and to have
"Beneficial Ownership" of, and to "Beneficially Own," any Voting Securities as
to which such Person or any of such Person's Affiliates or Associates is or may
be deemed to be the beneficial owner pursuant to Rule 13d-3 or 13d-5 under the
Exchange Act, as such rules are in effect on the date of this Agreement, as
well as any Voting Securities as to which such Person or any of such Person's
Affiliates or Associates has the right to become Beneficial Owner (whether such
right is exercisable immediately or only after the passage of time or the
occurrence of conditions) pursuant to any agreement,
2
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than the rights under the Rights Plan), warrants or
options, or otherwise; provided, however, that the Shareholder shall not be
deemed to be the "Beneficial Owner" and to have "Beneficial Ownership" of, and
to "Beneficially Own," any voting securities of Xxxxxxxxxx by virtue of the
Right of First Refusal Agreement dated the date hereof between the Shareholder
and certain persons until such moment in time as the Shareholder or any
Affiliate or Associate of the Shareholder acquires any such Voting Securities
in a closing pursuant thereto; provided, further, that a Person shall not be
deemed the "Beneficial Owner", or to have "Beneficial Ownership" of, or to
"Beneficially Own", any Voting Security (i) solely because such Voting Security
has been tendered pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such tendered Voting
Security is accepted for payment or exchange or (ii) solely because such Person
or any of such Person's Affiliates or Associates has or shares the power to
vote or direct the voting of such Voting Security pursuant to a revocable proxy
or consent given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations under
the Exchange Act, except if such power (or the arrangements relating thereto)
is then reportable under Item 6 of Schedule 13D under the Exchange Act (or any
similar provision of a comparable or successor report). For purposes of this
Agreement, in determining the percentage of the outstanding Voting Securities
with respect to which a Person is the Beneficial Owner, all shares as to which
such Person is deemed the Beneficial Owner shall be deemed outstanding.
"Board" shall mean the Board of Directors of Xxxxxxxxxx.
"Closing Date" shall mean the date upon which the Closing (as defined
in the Merger Agreement) shall occur.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Group" shall have the meaning assigned to such term in Rule 13(d)-3
of the Exchange Act as in effect on the date hereof.
"Independent Directors" shall mean those directors of the Board who
are not Shareholder Directors, Transferee Directors or officers of Xxxxxxxxxx
or any of its Subsidiaries; provided that, only for the purpose of determining
an individuals qualification to vote on a particular matter, each such
individual also must not have (and must not be an Affiliate of any Person who
has) any material financial interest with respect to the particular matter
under consideration.
"Investor" shall mean the Shareholder and any Permitted Transferee.
"Minority Shareholders" shall mean Beneficial Owners of Voting
Securities who are not an Investor, Affiliates or Associates of an Investor or
any member of a Group of which an Investor, or Affiliates or Associates of the
Investor, are members with respect to Shares (in each case for each Investor
and Affiliates and Associates of such Investor only for so long as this
Agreement is in effect with respect to the respective Investor).
3
"Minority Shares" shall mean the Shares Beneficially Owned by Minority
Shareholders.
"Permitted Transferee" shall mean a permitted transferee under
Section 5(a), the proviso of Section 5(c), Section 5(f), Section 5(g), Section
5(h) or Section 5(i).
"Person" shall mean an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization,
including a governmental or political subdivision or an agency or
instrumentality thereof.
"Qualified Parties" shall mean any (i) trust described in Section 664
of the Code (or any substantially similar entity under non-U.S. tax laws) of
which the Investor or Family Members of the Investor are income beneficiaries
and (ii) any charitable organization described in Section 501(c)(3) of the Code
(or any substantially similar entity under non-U.S. tax laws), in both cases
that is or simultaneously agrees to be bound as an Investor under this
Agreement.
"Rights Plan" shall have the meaning assigned thereto in the Merger
Agreement.
"Shareholder" shall, in addition to the meaning ascribed thereto in
the first paragraph hereof, mean any Investor that immediately prior to
becoming an Investor hereunder is (i) a Wholly-Owned Subsidiary of the
Shareholder or (ii) Beneficially Owns 100% of the Total Voting Power of the
Shareholder; provided that Xx. Xxxxxxx Xxxxxx Xxxxxxxxxx (x) continues to
Beneficially Own 100% of the Total Voting Power of such Investor and (y)
guarantees to Xxxxxxxxxx the performance of all obligations of such Investor
under this Agreement.
"Shares" shall mean the shares of common stock, no par value per
share, of Xxxxxxxxxx, to be issued in the Merger.
"Subsidiary" shall mean, with respect to any Person, any entity at
least 50% of the Voting Securities of which are owned directly or indirectly by
such Person.
"Surviving Company Merger" shall mean any merger or other business
combination or reorganization (i) where the transaction has been approved by a
unanimous vote of the entire Board or (ii) where the holders of Voting
Securities of Xxxxxxxxxx prior to such transaction will beneficially own
(solely for the purpose of this definition, as determined pursuant to Rule
13d-3 or Rule 13d-5 of the Exchange Act) in the aggregate at least 60% of the
surviving corporation's Total Voting Power immediately giving effect to such
transaction.
"Transfer" shall mean any direct or indirect sale, transfer,
assignment, pledge, hypothecation, mortgage, or other disposition, including
those by operation or succession of law, merger or otherwise, or any
encumbrance (other than encumbrances arising by operation of law).
"Total Voting Power" shall mean the non-diluted aggregate number of
votes that may be cast by the holders of outstanding Voting Securities.
"Voting Securities" shall mean all securities entitled to vote in the
ordinary course in the election of directors or of Persons serving in a similar
governing capacity, including the voting rights attached to such securities and
rights or options to acquire such securities.
4
"Wholly-Owned Subsidiary" shall mean, with respect to any Person, a
Subsidiary all of the Voting Securities of which are owned, directly or
indirectly, by such Person.
(b) For the purposes of this Agreement, the following terms shall
have the meanings assigned to them in the corresponding Sections of this
Agreement:
"Acceptance Notice" Section 7(b)
"Amended Proposal Notice" Section 7(a)
"Champion Capital Stock" Section 2(b)
"Champion Common Stock" Section 2(b)
"Eligible Person" Section 9(a)
"Fair Proposal" Section 6
"Fair Value" Section 6(b)
"Family Members" Section 5(h)
"Heirs" Section 5(h)
"Initiation Date" Section 6(a)
"Investor Appraiser" Section 6(a)
"Higher Appraised Amount" Section 6(c)
"Lower Appraised Amount" Section 6(c)
"Mutually Appraised Amount" Section 6(c)
"Mutually Designated Appraiser" Section 6(c)
"Offer Price" Section 7(a)
"Xxxxxxxxxx Appraiser" Section 6(a)
"Xxxxxxxxxx Common Stock" Section 2(a)
"Price" Section 6(c)
"Proposal Notice" Section 7(a)
"Shareholder Directors" Section 9(a)
"Shareholder Proposal" Section 7(a)
5
"Transferee Directors" Section 9(g)
2. Representations of the Shareholder. As of the date hereof, the
Shareholder represents and warrants to Xxxxxxxxxx that:
(a) such Shareholder Beneficially Owns all of the outstanding
shares of common stock, no par value per share, of Xxxxxxxxxx ("Xxxxxxxxxx
Common Stock");
(b) such Shareholder does not Beneficially Own any shares of
common stock, par value $.01 per share, of Champion ("Champion Common Stock")
or any shares of Series C Preferred Stock or Series D Preferred Stock of
Champion (collectively, the "Champion Capital Stock");
(c) this Agreement has been duly executed and delivered by the
Shareholder and, assuming due execution by Xxxxxxxxxx, this Agreement is a
legal, valid and binding obligation, enforceable against the Shareholder in
accordance with its terms; and
(d) The execution, delivery and performance by the Shareholder of
this Agreement do not and will not contravene or conflict with any provision of
any law, regulation, judgment, injunction, order or decree binding upon the
Shareholder or any agreement, contract or other instrument to which the
Shareholder is a party, other than any such contraventions or conflicts that
would not prevent or materially delay the performance of the Shareholder's
obligations hereunder.
3. Representations of Xxxxxxxxxx. As of the date hereof, Xxxxxxxxxx
represents and warrants to the Shareholder that the execution, delivery and
performance of this Agreement by it has been duly and validly authorized by all
necessary corporate action on its part and, assuming due execution by the
Shareholder, that this Agreement is a legal, valid and binding obligation,
enforceable against Xxxxxxxxxx in accordance with its terms.
4. Standstill Provisions. An Investor shall not, and shall not suffer or
permit any Affiliates or Associates of such Investor to, whether acting alone
or in concert with others:
(a) make, or in any way participate in, directly or indirectly,
any "solicitation" of "proxies" (as such terms are used in Regulation 14A
promulgated under the Exchange Act) to vote or consent with respect to any
Voting Securities of Xxxxxxxxxx in any way that is inconsistent with the
provisions of this Agreement;
(b) unless Xxxxxxxxxx shall be in material breach of Section 9,
become a "participant" in any "election contest" (as such terms are defined or
used in Rule 14a-11 under the Exchange Act) in opposition to a Board slate of
Xxxxxxxxxx nominated by the Board;
(c) initiate or propose the approval of one or more shareholder
proposals with respect to Xxxxxxxxxx as described in Rule 14a-8 under the
Exchange Act, or induce or attempt to induce any other Person to initiate any
shareholder proposal with respect to Xxxxxxxxxx;
6
(d) except in accordance with Section 9 or solely in connection
with the termination of an executive employment contract, seek election to or
seek to place a representative on the Board or seek the removal of any member
of the Board;
(e) in any way that is inconsistent with the terms of this
Agreement, (i) solicit, seek to effect, negotiate with or provide non-public
information to any other Person with respect to, (ii) make any statement or
proposal, whether written or oral, to the Board or any director or officer of
Xxxxxxxxxx with respect to or (iii) otherwise make any public announcement or
proposal whatsoever with respect to, any form of business combination
transaction (with any Person) involving Xxxxxxxxxx or the acquisition of a
substantial portion of the equity securities or assets of Xxxxxxxxxx or any
Subsidiary of Xxxxxxxxxx, including a merger, consolidation, tender offer,
exchange offer or liquidation of Xxxxxxxxxx'x assets, or any restructuring,
recapitalization or similar transaction with respect to Xxxxxxxxxx or any
material Subsidiary of Xxxxxxxxxx; provided, however, that the foregoing shall
not (x) apply to any discussion between or among the Investor and Xxxxxxxxxx or
any of their respective Affiliates, Associates, officers, employees agents or
representatives or (y) in the case of clause (ii) above, be interpreted to
limit the ability of the Investor, or any Shareholder Director or Transferee
Director to make any such statement or proposal or to discuss any such proposal
with any officer or director of or advisor to Xxxxxxxxxx or advisor to the
Board unless, in either case, it would reasonably be expected to require
Xxxxxxxxxx to make a public announcement regarding such discussion, statement
or proposal;
(f) form, join or participate in or encourage the formation of a
Group with respect to any Voting Securities of Xxxxxxxxxx, other than a Group
consisting solely of the Investors, Xxxxxxxxxx and Affiliates and Associates of
the Investors and Xxxxxxxxxx; provided, that, except in connection with a Fair
Proposal in accordance with Section 6, no Investor nor Affiliates or Associates
of such investor shall in any case form, join or participate in or encourage
the formation of any Group of which the members, together with all of such
members' respective Affiliates and Associates, will, together with the Investor
and the Affiliates and Associates of the Investor, Beneficially Own 66-2/3% or
more of the Total Voting Power of Xxxxxxxxxx;
(g) except in compliance with Section 5, deposit any Voting
Securities of Xxxxxxxxxx into a voting trust or subject any such Voting
Securities to any arrangement or agreement with respect to the voting thereof,
other than any such trust, arrangement or agreement (i) the only parties to, or
beneficiaries of, which are the Investor, Qualified Parties, Xxxxxxxxxx or
Affiliates and Associates of the Investor or Xxxxxxxxxx and (ii) the terms of
which do not require or expressly permit any party thereto to act in a manner
inconsistent with this Agreement; provided that all of the Voting Securities
deposited into any such trust or subjected to any arrangement or agreement, the
parties to or beneficiaries of which include Qualified Parties, shall be deemed
to be Beneficially Owned by the respective Investor for all purposes of this
Agreement; or
(h) publicly disclose any intention, plan or arrangement
inconsistent with the terms of this Agreement, or make any such disclosure
privately if it would reasonably be expected to require Xxxxxxxxxx to make a
public announcement regarding such intention, plan or arrangement.
5. Voting Security Transfers. An Investor shall not, and shall not suffer or
permit any Affiliates or Associates of such Investor to, Transfer, in any
single transaction or group of related transactions, any Voting Securities,
except for a Transfer that complies with any of the following subsections:
7
(a) to any Person who owns 100% of the Total Voting Power of the
Investor and to any Wholly-Owned Subsidiary of the Investor or any such Person;
provided, that (i) such transferee becomes a party to this Agreement as an
Investor and (ii) in the case of a Transfer to a Wholly-Owned Subsidiary, the
Person who is not a Wholly-Owned Subsidiary of any Person and who Beneficially
Owns 100% of the Total Voting Power of the Wholly-Owned Subsidiary of the
Transferring Investor guarantees to Xxxxxxxxxx the performance of all
obligations of such transferee under this Agreement;
(b) to any Person such that, after such Transfer, such Person,
together with the Affiliates and Associates of such Person, will not
Beneficially Own, after giving effect to such Transfer, Voting Securities of
Xxxxxxxxxx constituting 25% or more of the Total Voting Power of Xxxxxxxxxx;
provided that, so long as this Agreement is in effect with respect to such
Investor, except in connection with a Fair Proposal in accordance with Section
6 or a Shareholder Proposal in accordance with Section 7, such Investor, or any
Affiliates or Associates of the Investor, shall not in any case, form, join or
participate in or encourage the formation of a Group with such Person, or any
Affiliates or Associates of such Person, of which the members, together with
all of such members' respective Affiliates and Associates, will, together with
such Investor and all Affiliates and Associates of such Investor, Beneficially
Own 25% or more of the Total Voting Power of Xxxxxxxxxx;
(c) in a bona fide pledge of such Voting Securities to a financial
institution to secure borrowings as permitted by applicable laws, rules and
regulations; provided, that, if such pledge results in a pledge of more than
25% of the Total Voting Power of Xxxxxxxxxx to such financial institution, such
financial institution agrees to be bound by the obligations of the Investor
under this Agreement (but shall not have any of the rights of an Investor under
this Agreement until such pledgee acquires such Voting Securities upon
foreclosure pursuant to the terms of the pledge agreement, in which case such
pledgee may transfer such Voting Securities in accordance with this Section as
if such pledgee were an Investor hereunder and cause a transferee to have all
rights and obligations of a Permitted Transferee hereunder);
(d) to underwriters in connection with an underwritten public
offering of such Voting Securities on a firm commitment basis registered under
the Securities Act of 1933, as amended, pursuant to which the sale of such
Voting Securities will be in a manner to effect a broad distribution;
(e) to Xxxxxxxxxx or a Wholly-Owned Subsidiary of Xxxxxxxxxx;
(f) to a Person so long as either immediately after or
simultaneously with the acquisition of such Voting Securities, such Person or
an Affiliate of such Person makes an Acquisition Proposal to acquire all
outstanding Shares at the same price and on equivalent terms offered to the
Investor and the Investor's Affiliates and Associates that is made in
compliance with the Exchange Act and the rules and regulations thereunder;
provided, that (i) other than with respect to the Shares to be Transferred by
the Investor or the Investor's Affiliates or Associates, such Person may not
purchase any Shares in the Acquisition Proposal and the Acquisition Proposal
may not otherwise be consummated unless it is approved and recommended (and,
immediately prior to consummation of the Acquisition Proposal, continues to be
recommended) by a majority of the Independent Directors, (ii) if the
Acquisition Proposal is a tender or exchange offer that is approved and
recommended (and, immediately prior to consummation of the Acquisition
Proposal, continues to be recommended) by a majority of the Independent
Directors,
8
the terms of such tender shall provide that such Person shall, and such Person
shall be required to, accept for payment and purchase all Shares validly
tendered and not withdrawn upon expiration of the offer if a majority of the
Minority Shares are validly tendered and not withdrawn upon expiration of the
offer and (iii) such Person shall agree to be bound as an Investor by all
obligations of the Investor under this Agreement and shall remain so obligated
notwithstanding the termination of this Agreement with respect to any other
Investor in accordance with Section 16(e). In addition to the foregoing, for a
period of one year from the Closing Date, other than with respect to the Shares
to be Transferred by the Investor or the Investor's Affiliates or Associates,
(A) if the Acquisition Proposal is not a tender or exchange offer, the
Acquisition Proposal may not be consummated unless it is approved by holders of
a majority of the Minority Shares at a meeting duly called therefor, in
addition to any vote required by law, or (B) if the Acquisition Proposal is a
tender or exchange offer, such Person may not accept for payment or purchase
any Shares in connection with the offer unless a majority of the Minority
Shares have been tendered and not withdrawn upon expiration of the offer;
(g) to any Qualified Parties; provided, that (i) at the time of
such Transfer, the Investor or the Family Members of the Investor constitute a
sufficient number of the directors or trustees, as the case may be, of such
Qualified Parties to permit approval of matters by such Qualified Parties
without the approval of any other director or trustee of such Qualified
Parties;
(h) in the case of a Transfer by an Investor who is a natural
Person, a Transfer (A) in the case of the death of such Investor, to such
Investor's executors, administrators, testamentary trustees, heirs, devisees,
intestates and legatees ("Heirs") and (B) to such Investor's current or future
spouse, parents, siblings or descendants of such parents', siblings' or spouses
(the "Family Members"); provided that such Heirs and Family Members, as the
case may be, simultaneously agree to be bound as an Investor to all of the
obligations of the Investor under this Agreement; or
(i) to any Person in connection with an Approved Acquisition
Proposal or Surviving Company Merger.
6. Prohibited Acquisitions and Circumstances Permitting Acquisitions. An
Investor shall not, and shall not suffer or permit any Affiliates or Associates
of the Investor to, acquire, or agree or offer to purchase or otherwise
acquire, in a transaction or group of related transactions, any Voting
Securities of Xxxxxxxxxx such that the Investor, together with the Affiliates
and Associates of the Investor, after giving effect to such transaction or
transactions, will Beneficially Own 66-2/3% or more of the Total Voting Power
of Xxxxxxxxxx, except pursuant to a Fair Proposal (as hereinafter defined). For
the purposes of this Agreement, a "Fair Proposal" shall mean (i) an Acquisition
Proposal by such Investor (or such Investor's Affiliates or Associates) that is
approved by the unanimous vote of the Independent Directors or (ii) a
transaction to acquire all of the outstanding Shares that complies with all of
the following provisions of this Section:
(a) Appraisers. The Investor shall make a written request expressing
the Investor's desire to acquire Beneficial Ownership of Voting Securities to
the Board. Promptly after the Board's receipt of such written request, the
Independent Directors will designate an investment banking firm (the date of
such designation, the "Initiation Date") of recognized national standing that
does not Beneficially Own (excluding securities held on behalf of third
parties) a material amount of the securities of Xxxxxxxxxx (the "Xxxxxxxxxx
Appraiser") and the Investor will designate an investment banking firm of
recognized national standing that does not Beneficially Own (excluding
securities held on behalf of third parties) a material amount of the securities
of Xxxxxxxxxx (the
9
"Investor Appraiser"), in each case to determine the fair value (determined in
accordance with the procedures described below) per Share.
(b) Definition of Fair Value. The Investor acknowledges that the
consideration that would constitute fair value per Share is the price per Share
(including control premium) that an unrelated third party would pay if it were
to acquire all outstanding Shares (including the Shares held by the Investor
and Affiliates and Associates of the Investor) in an arm's-length transaction,
assuming that Xxxxxxxxxx was being sold in a manner reasonably designed to
solicit all possible participants and permit all interested parties an
opportunity to participate and to achieve the best value reasonably available
to the Shareholders at that time, taking into account all then existing
circumstances. Each of the investment banking firms referred to in this Section
will be instructed to determine fair value per Share in this manner.
(c) Determination of Price. Within 30 days after the Initiation
Date, the Xxxxxxxxxx Appraiser and the Investor Appraiser will each determine
its initial view as to the fair value per Share and consult with one another
with respect thereto. By the 45th day after the Initiation Date, the Xxxxxxxxxx
Appraiser and the Investor Appraiser will each have determined its final view
as to the fair value per Share. At that point, if the difference between the
Higher Appraised Amount (as defined below) and the Lower Appraised Amount (as
defined below) is not greater than 10% of the Higher Appraised Amount, the
price per Share (the "Price") will be the average of those two views.
Otherwise, the Xxxxxxxxxx Appraiser and the Investor Appraiser will agree upon
and jointly designate a third investment banking firm of recognized national
standing that does not Beneficially Own (excluding securities held on behalf of
third parties) a material amount of the securities of Xxxxxxxxxx (the "Mutually
Designated Appraiser") to determine such fair value. The Mutually Designated
Appraiser will, no later than the 60th day after the Initiation Date, determine
such fair value (the "Mutually Appraised Amount"), and the Price will be (x)
the Mutually Appraised Amount, if such amount falls within the range of values
that is greater than one-third and less than two-thirds of the way between the
Lower Appraised Amount and the Higher Appraised Amount, or (y) the average of
the Mutually Appraised Amount and the other Appraised Amount (Lower or Higher)
that is closest to the Mutually Appraised Amount, if the Mutually Appraised
Amount does not fall within that range; provided, that if the Price so
determined is less than the Lower Appraised Amount or more than the Higher
Appraised Amount, the Price shall be the Lower Appraised Amount or the Higher
Appraised Amount, as the case may be. During such 60 day period, Xxxxxxxxxx
will not, subject to fiduciary duties and applicable law, enter into or
recommend to its shareholders any other Acquisition Proposal.
As used herein, "Lower Appraised Amount" means the lower of
the respective final views of the Xxxxxxxxxx Appraiser and the
Investor Appraiser as to fair value per Share and "Higher Appraised
Amount" means the higher of such respective final views.
(d) Fair Proposal.
(i) Once the Price is determined as provided above, the Investor
will have 15 days to notify the Board whether he desires to proceed with a Fair
Proposal at the Price.
(ii) If the Investor decides not to proceed with a Fair Proposal,
(x) he shall promptly notify the Board in writing of such fact (it being
understood that the failure to notify the Board within 15 days shall constitute
notification to the Board that the Investor and the Affiliates and Associates
of the Investor do not desire to proceed with a Fair Proposal) and (y) the
Investor and
10
the Affiliates and Associates of the Investor shall not make a written request
for an Acquisition Proposal to the Board under this Section for a period of six
months from the date the Investor notifies (or is deemed to notify) the Board
of his intent not to proceed with a Fair Proposal, provided that the Investor
and the Investor's Affiliates and Associates shall not at any time be
restricted from making a written request for an Acquisition Proposal to the
Board under this Section at a price that is equal to or in excess of the last
determined Price or from exercising their rights under Section 7.
(iii) If the Investor decides to proceed with a Fair Proposal, the
Investor may pay or cause to be paid the Price in cash or non-cash
consideration or any combination of cash and non-cash consideration that the
Investor Appraiser and the Xxxxxxxxxx Appraiser mutually agree within 15 days
will have an aggregate market value, on a fully distributed basis, of not less
than the Price; provided, that in the event such appraisers shall fail to reach
such agreement, they shall within five business days designate the Mutually
Agreed Appraiser to make such determination within ten days after such
designation, whose determination shall be final.
(e) Meeting of Shareholders; Tender Offer. If the Investor
determines to proceed with a Fair Proposal as set forth above, the Investor and
Xxxxxxxxxx agree that each will enter into an agreement with the other therefor
(containing customary terms and conditions applicable in a situation in which
the acquiror has an ownership position comparable to the Investor's ownership
interest in Xxxxxxxxxx) and, if the Fair Proposal is not to be consummated
pursuant to a tender or exchange offer for all of the outstanding Shares, will
cause a meeting of shareholders of Xxxxxxxxxx to be held as soon as practicable
to consider and vote thereon; provided, that, for a period of one year
following the Closing Date, no Fair Proposal may be consummated unless (i) if
the Fair Proposal is not a tender or exchange offer, it is approved by the
affirmative vote of the holders of a majority of the Minority Shares at a
meeting duly called therefor, in addition to any vote required by law, or (ii)
if the Fair Proposal is a tender or exchange offer, a majority of the Minority
Shares have been validly tendered and not withdrawn and are accepted for
payment as of the expiration date (as may be extended) of the offer. In the
event that the Fair Proposal is not approved or insufficient Shares are
tendered to consummate the Fair Proposal in accordance with the terms hereof
within 180 days from the Initiation Date (which period may be extended by a
vote of 75% of the entire Board and a majority of the Independent Directors of
the Board), the Investor shall terminate the Fair Proposal and shall not make a
written request for an Acquisition Proposal to the Board under this Section for
a period of one year from the Initiation Date; provided that the Investor and
the Investor's Affiliates and Associates shall not at any time be restricted
from exercising their rights under Section 7. Xxxxxxxxxx agrees, subject to
fiduciary duties and in accordance with applicable law, to promptly call and to
take all other action necessary to hold the shareholder meeting referred to
above.
(f) Judgment of Independent Directors. Notwithstanding anything to
the contrary in the foregoing Sections 6(a)-(e), in the event that the
Independent Directors unanimously determine, in the good faith exercise of
their fiduciary duties, based upon the facts and the circumstances existing at
the time of such determination, that is in the best interests of Xxxxxxxxxx and
the holders of the Shares that the Independent Directors approve and recommend,
in accordance with the terms hereof, an Acquisition Proposal at a lower price
than the Price, then such unanimously approved Acquisition Proposal shall be a
Fair Proposal and the price at which the Investor may consummate the
Acquisition Proposal hereunder shall be the price so determined by the
Independent Directors.
11
7. Right of First Offer.
(a) Notification. After the Effective Time (as defined in the Merger
Agreement), Xxxxxxxxxx will not enter into or recommend any Approved
Acquisition Proposal without first notifying the Shareholder in writing (a
"Proposal Notice") of such Approved Acquisition Proposal and providing the
Shareholder (including for purposes of this Section 7, Affiliates of such
Shareholder) the opportunity (as hereinafter provided) to consummate an
Acquisition Proposal on terms substantially equivalent to and, if the Approved
Acquisition Proposal is a cash offer, at a cash price or, if the Approved
Acquisition Proposal includes non-cash consideration, at a price (in either
case, the "Offer Price") equal to the sum of the amount of any cash plus the
fair market value of any other consideration offered in such prospective
Approved Acquisition Proposal, as the same may be amended or modified from time
to time (a "Shareholder Proposal"). The Proposal Notice shall set forth the
identity of the proposed purchaser and the material terms of the proposed
Approved Acquisition Proposal. In the event that the proposed Approved
Acquisition Proposal is amended or modified, Xxxxxxxxxx shall promptly notify
the Shareholder in writing (an "Amended Proposal Notice"); provided that, if
the Shareholder does not provide an Acceptance Notice (as defined below) after
receipt of a Proposal Notice or any required Amended Proposal Notice, no
Amended Proposal Notice will be required unless the terms of such amendments or
modifications are less favorable in any material respects to Xxxxxxxxxx than
those contained in the Proposal Notice or any prior Amended Proposal Notices.
Any required Amended Proposal Notice shall set forth the identity of the
proposed purchaser and the material terms of the amended or modified proposed
Approved Acquisition Proposal.
(b) Response. Within 6 business days after receipt of the Proposal
Notice or any required Amended Proposal Notice, the Shareholder shall notify
(an "Acceptance Notice") the Board in writing of his good faith intention to
enter into negotiations regarding a Shareholder Proposal pursuant to subsection
(c) below. The failure to notify the Board in such period shall constitute
notice of the Shareholder's intention not to pursue a Shareholder Proposal. If
the Shareholder fails to deliver an Acceptance Notice after the Proposal Notice
or, if applicable, the Amended Proposal Notice, (i) the Independent Directors
and the Board shall have the right to approve and recommend the Approved
Acquisition Proposal to the shareholders of Xxxxxxxxxx and (ii) Xxxxxxxxxx
shall have the right to enter into such agreements and take such actions in
furtherance of consummating, and to consummate, the Approved Acquisition
Proposal at the Offer Price at any time within one year from the date the
Approved Acquisition Proposal was first made to Xxxxxxxxxx.
(c) Negotiation. For a period of 15 days from the date of the last
Acceptance Notice, the Shareholder shall have the non-exclusive right to
negotiate the Shareholder Proposal in good faith with the Independent Directors
of the Board and their representatives. If at the end of that 15 day period, a
majority of the Independent Directors shall in the good faith exercise of their
fiduciary duties determine that the competing Approved Acquisition Proposal is
superior to the Shareholder Proposal or if the Shareholder Proposal is accepted
and is then terminated in accordance with its terms, (i) the Independent
Directors and the Board shall have the right to approve and recommend such
competing Approved Acquisition Proposal to the shareholders of Xxxxxxxxxx and
(ii) Xxxxxxxxxx shall have the right to enter into such agreements and take
such actions in furtherance of consummating, and to consummate, such competing
Approved Acquisition Proposal at the Offer Price at any time within one year
from the date the Acquisition Proposal was first made to Xxxxxxxxxx.
12
(d) Non-Cash Valuation. If the consideration offered by the
prospective purchaser or transferee or, if permitted, offered by the
Shareholder, includes non-cash consideration, Xxxxxxxxxx and the Shareholder
shall in good faith seek to agree upon the value of such non-cash
consideration. If Xxxxxxxxxx and the Shareholder fail to agree on such value
within 15 days following receipt by the Shareholder of the Proposal Notice,
then the Independent Directors and the Shareholder shall appoint a nationally
recognized investment banking firm mutually acceptable to the Independent
Directors and the Shareholder which shall resolve the issues in dispute;
provided, that if the Independent Directors and the Shareholder cannot agree on
an investment banking firm then each shall appoint a nationally recognized
investment banking firm which together shall within five business days mutually
agree on another nationally recognized investment banking firm to which the
items in dispute shall be referred and which shall make a final and binding
determination within ten days. The value of any securities shall be the fair
market value of such securities and the value of any property other than
securities shall be the fair market value of such property. If a determination
under this paragraph (d) is required, any deadline for acceptance provided for
in this Section shall be postponed until the third business day after the date
of such determination. The Shareholder and Xxxxxxxxxx shall share equally in
payment of all expenses of such investment banking firms. All determinations
made pursuant to this paragraph (c) shall be final and binding on the
Xxxxxxxxxx and the Shareholder.
(e) Limitation. It is agreed and understood that the provisions of
this Section shall inure to the benefit of only Xxxxxxxxxx and the Shareholder
and not to the benefit of any Investor other than the Shareholder.
8. Agreement to Sell Voting Securities. Subject to the rights of the
Shareholder to propose, negotiate and consummate a Shareholder Proposal in
accordance with Section 7, the Shareholder agrees that the Shareholder will,
and will cause any Affiliates or Associates of the Shareholder to, sell in,
tender into and vote in favor of, as the case may be, any Approved Acquisition
Proposal and any Shareholder Proposal approved by the Independent Directors in
accordance with Section 7 all Voting Securities of Xxxxxxxxxx Beneficially
Owned by the Shareholder or any Affiliate or Associate of the Shareholder. It
is agreed and understood that the provisions of this Section shall not be
binding upon any Investor other than the Shareholder so long as, if the
Shareholder continues to be subject to this Agreement, such Investor is not an
Affiliate or Associate of the Shareholder.
9. Board Representation.
(a) The Board; Shareholder Directors. The Board as of the Effective
Time shall number nine directors and may be increased by the Board pursuant to
the terms of this clause (a) and the by-laws of Xxxxxxxxxx. The Board shall be
divided into three classes, with the number of directors divided as equally as
possible among those classes. The Shareholder may request that Xxxxxxxxxx
include, and Xxxxxxxxxx shall include, as nominees for the Board slate
recommended by the Board, up to four persons designated by the Shareholder who
are Eligible Persons (the "Shareholder Directors"), one of whom shall be a
Class I director with an original term expiring in 1997, one of whom shall be a
Class II director with an original term expiring in 1998 and two of whom shall
be Class III directors with original terms expiring in 1999. If the
Shareholder, together with the Affiliates and Associates of the Shareholder,
shall cease to Beneficially Own (i) 35% of the Total Voting Power of
Xxxxxxxxxx, each Investor agrees to vote, and to use its best efforts to cause
its respective Shareholder Directors and Transferee Directors (as defined
below) to vote, immediately to increase the size of the Board to 10 directors,
(ii) 32.5% of the Total Voting Power
13
of Xxxxxxxxxx, each Investor agrees to vote, and to use its best efforts to
cause its respective Shareholder Directors and Transferee Directors to vote,
immediately to increase the size of the Board to 11 directors and (iii) 30% of
the Total Voting Power of Xxxxxxxxxx, each Investor agrees to vote, and to use
its best efforts to cause its respective Shareholder Directors and Transferee
Directors to vote, immediately to increase the size of the Board to 12
directors; provided that each Investor hereby agrees that any vacancies created
by any such enlargement of the Board shall be in Class III, Class II and Class
I, respectively, and the nominees to such vacancies shall be Independent
Directors.
For the purposes hereof, an "Eligible Person" shall mean (x)
the Shareholder and (y) any other person (A) other than a person whose
election to the Board, in the written opinion of counsel for
Xxxxxxxxxx, is reasonably likely to violate or be in conflict with, or
result in any material limitation on the ownership or operation of any
business or assets of Xxxxxxxxxx or its Subsidiaries under, any
statute, law, ordinance, regulation, rule, judgment, decree or order
of any court or governmental or regulatory authority and (B) who has
agreed in writing with Xxxxxxxxxx, subject to his or her fiduciary
duties, to comply with the provisions of this Section.
(b) Committees; Quorum. Each committee of the Board shall contain
such numbers of Shareholder Directors or Transferee Directors so that the
number of Shareholder Directors and Transferee Directors, when taken together,
on each such committee shall be as nearly as possible proportional to the total
number of Shareholder Directors and Transferee Directors on the Board; provided
that the forgoing shall not apply to the audit committee (which shall be
comprised solely of Independent Directors) or the compensation committee (which
shall be comprised of one Independent Director and one director who is not an
employee of Xxxxxxxxxx or its Subsidiaries and, for so long as the Shareholder
is entitled to nominate Shareholder Directors pursuant to this Agreement, one
Shareholder Director). The quorum required for the transaction of business by
the Board shall include at least one Shareholder Director or one Transferee
Director and one director who is an Independent Director, or their designees,
attending in person or, if necessary, via teleconference call.
(c) Resignation. Upon the Shareholder ceasing to Beneficially Own,
together with all Affiliates and Associates of the Shareholder at least 10% of
the Total Voting Power of Xxxxxxxxxx, Xxxxxxxxxx may request that all or any of
the Shareholder Directors then on the Board resign as directors of Xxxxxxxxxx,
and upon such request by Xxxxxxxxxx, the Shareholder shall use his best efforts
to cause such Shareholder Directors, except Xx. Xxxxxxx Xxxxxx Xxxxxxxxxx, who
shall resign at the next annual shareholder meeting for election to his class,
to resign immediately and relinquish all rights and privileges as a member of
the Board. Upon the Shareholder ceasing to Beneficially Own, together with all
Affiliates and Associates of the Shareholder, at least 25% of the Total Voting
Power of Xxxxxxxxxx, Xxxxxxxxxx may request that all or any of the Shareholder
Directors then on the Board resign as directors of Xxxxxxxxxx at the next
annual shareholder meeting for election to their respective class, and upon
such request by Xxxxxxxxxx, the Shareholder shall use his best efforts to cause
such Shareholder Directors to resign at such respective times and thereupon
relinquish all rights and privileges as a member of the Board. Upon termination
of this Agreement with respect to any Permitted Transferee, Xxxxxxxxxx may
request that all of the Transferee Directors then on the Board resign as
directors of Xxxxxxxxxx, and upon such request by Xxxxxxxxxx, the Permitted
Transferee shall use best efforts to cause such Transferee Directors to resign
immediately and relinquish all rights and privileges as a member of the Board.
14
(d) Non-Independent and non-Shareholder Directors. Two members of
the Board may be directors who are not Independent Directors, Shareholder
Directors or Transferee Directors.
(e) Independent Directors. Immediately following the Effective Time,
three members of the Board will be Independent Directors as set forth in the
Merger Agreement, and each of such Independent Directors shall be elected to
one of the three classes of the Board. Vacancies among the Independent
Directors occurring prior to the expiration of their respective terms of office
or created for Independent Directors as a result of increasing the size of the
Board as provided in clause (a) of this Section shall be filled by a vote of
75% of the entire remaining Board or, in the event that the Board cannot so
agree, by the unanimous agreement of the Independent Directors then in office.
Independent Directors to be nominated for election at each annual meeting of
Xxxxxxxxxx will be nominated by a vote of 75% of the entire Board or, in the
event that the Board cannot so agree, by the unanimous agreement of the
Independent Directors then in office.
(f) Efforts to Nominate and Elect Directors. Xxxxxxxxxx shall
nominate and shall use its best efforts to take and cause to be taken all
necessary action (corporate and other) to elect to the Board the individuals
required to be nominated for election as directors in accordance with the terms
hereof. The Investor shall nominate and shall use its best efforts, and shall
use best efforts to cause the Shareholder Directors and Transferee Directors,
as the case may be, and the Affiliates and Associates of the Investor to use
their respective reasonable efforts, to take and cause to be taken all
necessary action (corporate and other), which efforts shall include the voting
of all Voting Securities Beneficially Owned by the Investor and the Affiliates
and Associates of the Investor and voting, subject to his or her fiduciary
duties, as a Shareholder Director or Transferee Director, to nominate and elect
to the Board the individuals nominated by the Board in accordance with any
nomination provisions hereof then in effect and the terms of any employment
contracts between Xxxxxxxxxx and its executive officers so long as such
employment agreements remain in effect.
(g) Transferee Directors. If the Investor consummates a Transfer to
a Permitted Transferee who shall become an Investor hereunder, such Investor
shall have the right, upon written notice to Xxxxxxxxxx, to enter into such
agreements and understandings with such Permitted Transferee so that such
Investor relinquishes the right to nominate Shareholder Directors or Transferee
Directors, as the case may be, and such Permitted Transferee shall be entitled
to nominate, in place of the relinquished Shareholder Directors or Transferee
Directors, as the case may be, such number of persons for whom the Investor has
in such written notice relinquished the right to nominate who are Eligible
Persons (such persons from time to time being the "Transferee Directors");
provided, that (i) the number of Shareholder Directors or Transferee Directors,
as the case may be, entitled to be nominated by such Investor under this
Agreement shall be reduced by the number of directors relinquished in favor of
the Permitted Transferee and (ii) in no event will all or any one or any
combination of the Investors, together with their respective Affiliates and
Associates, at any time have more than four representatives on the Board,
whether pursuant to the terms hereof, any right of director appointment as set
forth in any employment agreement between any such representative and
Xxxxxxxxxx or otherwise.
10. Additional Agreements.
15
(a) No Amendment or Waiver. The Investor shall not, and shall cause
Affiliates and Associates of such Investor not to, publicly request Xxxxxxxxxx
or any of its agents or representatives, directly or indirectly, to amend or
waive any provision of this Agreement.
(b) Rights Plan. The Shareholder acknowledges that the Rights Plan
shall be adopted by Xxxxxxxxxx.
(c) No Relief of Liabilities. No Transfer by the Investor of
Beneficial Ownership of any Voting Securities of Xxxxxxxxxx shall relieve the
Investor of any liabilities or obligations to Xxxxxxxxxx that arose or accrued
prior to the date of such Transfer.
(d) Securities Subject to Agreement; Ineffective Transfers. All
Voting Securities of Xxxxxxxxxx that are Beneficially Owned by the Investor and
the Affiliates and Associates of such Investor shall be subject to this
Agreement. No Transfer or acquisition of any Voting Securities of Xxxxxxxxxx in
violation of any provision of this Agreement shall be effective to pass any
title to, or create any interest in favor of, any Person, but the Investor, in
attempting to effect or in permitting or suffering such Transfer or acquisition
(otherwise than inadvertently and in good faith, without any knowledge
thereof), shall be deemed to have committed a material breach hereof.
(e) Further Assurances. Xxxxxxxxxx and each Investor shall execute
and deliver such additional instruments and other documents and shall take such
further actions as may be necessary or appropriate to effectuate, carry out and
comply with all of the terms of this Agreement and the transactions
contemplated hereby.
(f) Investor Voting on Other Matters. Unless such action is
recommended by the Board, the Investor shall not, and shall cause the
Affiliates and Associates of the Investor not to, vote any Voting Securities of
Xxxxxxxxxx to amend or repeal the Restated Articles of Incorporation of
Xxxxxxxxxx or the By-laws of Xxxxxxxxxx or to call or request any special
meeting of Xxxxxxxxxx' shareholders. The Investor shall cause all Voting
Securities of Xxxxxxxxxx owned by the Shareholder and all Affiliates and
Associates of such Investor to be represented, in person or by proxy, at all
meetings of holders of Voting Securities of which the Investor has actual
notice, so that such Voting Securities may be counted for the purpose of
determining the presence of a quorum at such meetings.
11. Legends. (a) The Investor agrees that all certificates representing the
Voting Securities subject to this Agreement shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A SHAREHOLDER AGREEMENT DATED AUGUST 16, 1996 (A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF THE COMPANY) WHICH PROVIDES, AMONG OTHER
THINGS, FOR CERTAIN RESTRICTIONS ON TRANSFER THEREOF. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT SHALL BE VOID."
(b) Upon termination with respect to the Investor of this
Agreement in accordance with its terms and upon request by such Investor,
Xxxxxxxxxx shall issue new certificates with the foregoing legend removed.
16
12. Specific Performance. Each party hereto acknowledges that it will be
impossible to measure in money the damage to the other party if a party hereto
fails to comply with any of the obligations imposed by this Agreement, that
every such obligation is material and that, in the event of any such failure,
the other party will not have an adequate remedy at law or damages.
Accordingly, each party hereto agrees that injunctive relief or other equitable
remedy, in addition to remedies at law or damages, is the appropriate remedy
for any such failure and will not oppose the granting of such relief on the
basis that the other party has an adequate remedy at law. Each party hereto
agrees that it shall not seek, and agrees to waive any requirement for, the
securing or posting of a bond in connection with any other party's seeking or
obtaining such equitable relief.
13. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns and shall not be assignable (by operation of law or otherwise) without
the written consent of all other parties hereto; provided, that in the event of
a Surviving Company Merger where Xxxxxxxxxx is not the surviving corporation,
(x) this Agreement shall be assigned to and shall inure to the benefit of and
be binding upon such surviving corporation and (y) any reference herein to
Xxxxxxxxxx shall be deemed to be a reference to such surviving corporation;
provided, further, that the rights and obligations under this Agreement
(excluding Section 7) may be assigned by an Investor to a Permitted Transferee
in accordance with the terms of the Transfer to such Permitted Transferee,
which assignment shall not terminate any portion of this Agreement with respect
to such assignor except in accordance with Section 15(e).
14. Entire Agreement; Amendment; Waiver. This Agreement shall supersede all
prior agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties with
respect to the subject matter hereof. This Agreement may not be amended,
supplemented or modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by Xxxxxxxxxx and approved by the
unanimous vote of the Independent Directors and, with respect to each Investor,
by such Investor. No waiver of any provisions hereof by any party shall be
deemed a waiver of any other provisions hereof by any such party, nor shall any
such waiver be deemed a continuing waiver of any provision hereof by such
party.
15. Miscellaneous.
(a) Governing Law and Venue. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH AND SUBJECT TO THE LAWS OF THE STATE OF INCORPORATION OF
XXXXXXXXXX, WITHOUT REFERENCE TO CONFLICTS OF LAWS PRINCIPLES. The parties
hereby irrevocably submit to the jurisdiction of the courts of the state of
incorporation of Xxxxxxxxxx and the Federal courts of the United States of
America located in the state of incorporation of Xxxxxxxxxx solely in respect
of the interpretation and enforcement of the provisions of this Agreement, and
in respect of the transactions contemplated hereby, and hereby waive, and agree
not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit or proceeding may not be brought or
is not maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or any such document may not be enforced in
or by such courts, and the parties hereto irrevocably agree that all claims
with respect to such action or proceeding shall be heard and determined in such
a State or Federal court. The parties
17
hereby consent to and grant any such court jurisdiction over the person of such
parties and over the subject matter of such dispute and agree that mailing of
process or other papers in connection with any such action or proceeding in the
manner provided in Section 15(b), shall be valid and sufficient service
thereof.
(b) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given (i) on
the first business day following the date received, if delivered personally or
by telecopy (with telephonic confirmation of receipt by the addressee), (ii) on
the business day following timely deposit with an overnight courier service, if
sent by overnight courier specifying next day delivery and (iii) on the first
business day that is at least five days following deposit in the mails, if sent
by first class mail, to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
If to the Shareholder, to:
Xx. Xxxxxxx Xxxxxx Xxxxxxxxxx
AM Natruper Xxxx 00
X-00000 Xxxxxxxxx
Xxxxxxx Xxxxxxxx of Germany
Facsimile: (000)00-000-000-0000
with copies to:
X.X. Messenger
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
and to:
Xx. Xxxxx zu Losebeck
Sozietat Xx. X. Xxxxxxx
Xxxxxxxxx 0
00000 Xxxxxxxxx, Xxxxxxx
Facsimile: (000) 00-000-000-0000
If to Xxxxxxxxxx, to:
Xxxxxxxxxx Healthcare Corporation
000 Xxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
Vice President
and General Counsel
18
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
Facsimile: (000) 000-0000
(c) Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (ii) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
(d) Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which shall together constitute the same
agreement.
(e) Termination. With respect to a particular Investor (but not with
respect to any other Person who may at such time be bound by the terms hereof),
this Agreement shall terminate automatically without any action by any party
upon the earliest to occur of (i) the Investor, together with all Affiliates
and Associates of such Investor, ceasing to Beneficially Own at least 25% of
the Total Voting Power of Xxxxxxxxxx (but Sections 9 (c), (d) and (f) shall
not, with respect to the Shareholder, terminate until the Shareholder, together
with all Affiliates and Associates of the Shareholder, ceases to Beneficially
Own at least 10% of the Total Voting Power of Xxxxxxxxxx) and (ii) the
Investor, together with all Affiliates and Associates of such Investor,
Beneficially Owning at least 90% of the Total Voting Power of Xxxxxxxxxx;
provided that in the event of a termination pursuant to clause (ii) of this
subsection, the Investor shall remain obligated to and shall promptly acquire
all of the remaining Voting Securities of Xxxxxxxxxx (other than any such
Voting Securities properly exercising any appraisal or dissenters rights) at a
price equal to or in excess of any price paid by the Investor or Affiliates or
Associates of such Investor for such Voting Securities in the 90-day period
preceding such acquisition; provided, further, that in the event of a
termination pursuant to clause (i) of this subsection, the Investor shall
remain subject to the obligations of Sections 9(c), 9(d) and 9(f).
(f) Headings. All Section headings and the recitals herein are for
convenience of reference only and are not part of this Agreement, and no
construction or reference shall be derived therefrom.
(g) Other Agreements. The parties hereto agree that there is not and
has not been any other agreement, arrangement or understanding between the
parties hereto with respect to the matters set forth herein.
19
(h) THIRD PARTY BENEFICIARIES. NOTHING IN THIS AGREEMENT, EXPRESS OR
IMPLIED, IS INTENDED TO CONFER UPON ANY THIRD PARTY (INCLUDING ANY HOLDER OF
VOTING SECURITIES OF XXXXXXXXXX) ANY RIGHTS OR REMEDIES OF ANY NATURE
WHATSOEVER UNDER OR BY REASON OF THIS AGREEMENT; PROVIDED, THAT THE FOREGOING
SHALL NOT IN ANY WAY RESTRICT OR LIMIT ANY HOLDER OF VOTING SECURITIES OF
XXXXXXXXXX FROM BRINGING A SHAREHOLDER DERIVATIVE ACTION TO SEEK OR COMPEL THE
DIRECTORS OF XXXXXXXXXX TO CAUSE XXXXXXXXXX TO ENFORCE ANY OBLIGATIONS OF AN
INVESTOR HEREUNDER OR TO EXERCISE ANY RIGHTS OR REMEDIES OF XXXXXXXXXX
HEREUNDER.
IN WITNESS WHEREOF, Xxxxxxxxxx and each Investor have executed
and delivered this Agreement, or a counterpart hereof, as of the date first
written above or, where applicable, across from the Investor's signature on
such counterpart.
XXXXXXXXXX HEALTHCARE CORPORATION
By: /s/ Xx. Xxxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xx. Xxxxxxx X. Xxxxxxxxxx
Title: Chairman
PARK HOSPITAL GMBH
By: /s/ Xx. Xxxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xx. Xxxxxxx X. Xxxxxxxxxx
Title: Chairman
As Guarantor of the obligations
of the Shareholder:
\s\ Xx. Xxxxxxx X. Xxxxxxxxxx
-------------------------------
Xx. Xxxxxxx Xxxxxx Xxxxxxxxxx
