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EXHIBIT C
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 (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:
15. 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
(iii) a merger or other business combination (other than a Surviving Company
Merger) involving Xxxxxxxxxx,(iv) 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 (v) 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
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time or the occurrence of conditions) pursuant to any agreement, 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 l3D 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
individual's 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
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Investor and Affiliates and Associates of such Investor only for so long as this
Agreement is in effect with respect to the respective Investor).
"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.
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"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.
"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)
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"Proposal Notice" Section 7(a)
"Shareholder Directors" Section 9(a)
"Shareholder Proposal" Section 7(a)
"Transferee Directors" Section 9(g)
16. 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 $.0l 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.
17. 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.
18. 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-ll under the Exchange Act) in opposition to a
Board slate of Xxxxxxxxxx nominated by the Board;
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(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;
(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
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(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.
19. 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:
(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;
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(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, 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 or 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.
20. 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
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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 "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 l0%
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
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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 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
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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.
21. 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
(Page 36 of 47 Pages)
12
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.
(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
(Page 37 of 47 Pages)
13
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 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.
22. 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.
23. 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 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
(Page 38 of 47 Pages)
14
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 foregoing 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.
(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
(Page 39 of 47 Pages)
15
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.
24. ADDITIONAL AGREEMENTS.
(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.
(Page 40 of 47 Pages)
16
(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.
25. 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.
26. 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
(Page 41 of 47 Pages)
17
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.
27. 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).
28. 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.
29. 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 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.
(Page 42 of 47 Pages)
18
(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
(Page 43 of 47 Pages)
19
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.
(Page 44 of 47 Pages)
20
(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.
(Page 45 of 47 Pages)
21
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 hereof.
XXXXXXXXXX HEALTHCARE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
PARK HOSPITAL GmbH
By: /s/ Dr. Manfred Xxxxx Xxxxxxxxxx
--------------------------------------
Name: Dr. Manfred Xxxxx Xxxxxxxxxx
Title: Chairman
As Guarantor of the obligations
of the Shareholder:
/s/ Dr. Manfred Xxxxx Xxxxxxxxxx
---------------------------------
Dr. Manfred Xxxxx Xxxxxxxxxx
(Page 46 of 47 Pages)
