TERMINATION AND RELEASE OF
PROXY AND VOTING AGREEMENT
This TERMINATION AND RELEASE OF PROXY AND VOTING AGREEMENT (the
"Termination"), dated as of April 13, 1998, by and among Apollo Management,
L.P., a Delaware limited partnership ("Apollo Management" and together with its
affiliates and managed investment funds, "Apollo") and the stockholders listed
on the signature pages attached hereto (together with each other Person (defined
below) who is or becomes a party to the Proxy and Voting Agreement (defined
below) in accordance with the terms hereof, the "Stockholders").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to that certain Stockholders
Agreement, dated as of November 4, 1997 (the "Stockholders Agreement"), pursuant
to which the parties provided for certain rights and obligations in respect of
the Shares (defined in the Stockholders Agreement);
WHEREAS, in addition to the Stockholders Agreement, the Stockholders provided
for certain voting rights and obligations in respect to Shares pursuant to that
certain Proxy and Voting Agreement, dated as of November 4, 1997, by and among
Apollo Management and the Other Stockholders (defined in the Stockholders
Agreement);
WHEREAS, as an inducement to Mariner Health Group, Inc. ("Mariner") to enter
into that certain Agreement and Plan of Merger (the "Merger Agreement") by and
among the Company, Mariner and Paragon Acquisition Sub, Inc., a wholly owned
subsidiary of the Company ("Sub"), Mariner requested, and Apollo Management,
Xxxxx X. Xxxxx ("Xxxxx") and the other parties hereto have agreed to enter into
this Termination to become effective as of the effective time (the "Effective
Time") of the merger of Sub with and into Mariner; and
NOW THEREFORE, the parties hereto agree as follows:
1. Representation and Warranties. Each party hereto hereby represents and
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warrants to the other party as follows:
(a) Authority Relative to this Termination. Each party hereto has the
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requisite power and authority to execute and deliver this Termination and to
consummate the transactions contemplated hereby. The execution and delivery of
this Termination and the consummation of the transactions contemplated hereby
have been duly and validly authorized by such party and no other proceedings on
the part of such party are necessary to authorize this Termination or to
consummate the transactions so contemplated. This Termination has been duly and
validly executed and delivered by such party, and assuming that this Termination
has been duly and validly authorized, executed and delivered by the other
parties hereto, this Termination constitutes a valid and binding obligation of
such party, enforceable against such party in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general principles of
equity (whether considered in a proceeding in equity or at law).
(b) No Conflicts. Neither the execution and delivery of this
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Termination nor the consummation of the transactions contemplated hereby will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which such
party is a party or by which such party is bound. Other than the Proxy and
Voting Agreement and with respect to Apollo, that certain Parent Voting
Agreement, dated as of the date hereof, by and between Apollo and Mariner, there
are no other agreements or understandings with respect to the voting of the
Shares.
2. Xxxxx' Rights and Obligations. As of the Effective Time, Xxxxx will no
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longer be a Stockholder under the Proxy and Voting Agreement and from and after
the Effective Time Xxxxx' rights and obligations under the Proxy and Voting
Agreement (including, without limitation, the irrevocable proxy granted by Xxxxx
to Apollo Management) shall be deemed to be terminated and of no further effect
with respect to Xxxxx and any shares of Common Stock he beneficially owns.
3. Force and Effect. Except as to the termination of Xxxxx' rights and
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obligations under the Proxy and Voting
Agreement, this Termination shall have no effect on the Proxy and Voting
Agreement and the Proxy and Voting Agreement shall remain in full force and
effect after giving effect to this Termination.
4. Termination. This Termination will expire without becoming effective and
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will be of no force and effect upon the termination of the Merger Agreement.
5. Third Party Beneficiary. The parties to this Termination hereby
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acknowledge and agree that the termination of Xxxxx' rights and obligations
pursuant to this Termination is intended to be for the benefit of Mariner and
its stockholders and may be enforced by Mariner stockholders who on the record
date for the meeting at which the Merger Agreement is submitted to Mariner
stockholders for approval, are the record holders of not less than 40% of the
then outstanding shares of Mariner common stock.
6. Governing Law. This Termination shall be governed in all respects,
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including validity, interpretation and effect, by the laws of the State of
Delaware (without giving effect to the provisions thereof relating to conflicts
of law).
7. Counterparts. This Termination may be executed in two or more
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counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
8. Descriptive Headings. The headings herein are inserted for convenience of
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reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Termination.
9. Further Assurances. The parties hereto will execute and deliver all such
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further documents and instruments and take all such further actions as may be
necessary in order to consummate the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Termination as of
the date first above written.
APOLLO MANAGEMENT, L.P.,
on behalf of one or more managed
investment funds
By: AIF III Management, Inc.
Its General Partner
By:
Name:
Title:
Xxxxx X. Xxxxx
CHASE EQUITY ASSOCIATES, L.P.
By: Chase Capital Partners
Its General Partner
By:
Partner
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HEALTHCARE EQUITY PARTNERS, L.P.
By: Beecken, Xxxxx & Company, L.L.C.
Its General Partner
By:
Managing Director
HEALTHCARE EQUITY QP PARTNERS, L.P.
By: Beecken, Xxxxx & Company, L.L.C.
Its General Partner
By:
Managing Director
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KEY CAPITAL CORPORATION
By:
Name:
Title:
KEY EQUITY PARTNERS 97
By:
Name:
Title: General Partner
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DRAX HOLDINGS L.P.
By: Xxxxx Corporation
Its General Partner
By:
Name:
Title:
WALNUT GROWTH PARTNERS LIMITED
PARTNERSHIP
By: Walnut GP, L.L.C.
Its General Partner
By:
Managing Director
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