Exhibit 99.5
VOTING AND PAYMENT AGREEMENT
VOTING AGREEMENT, dated as of December 17, 1998 (this "Agreement"), among
Phar-Mor, INC., a Pennsylvania corporation ("Buyer"), and XXXXXX XXXXX (the
"Holder").
WITNESSETH:
WHEREAS, Buyer, PHARMACY ACQUISITION CORP., a New York corporation and
wholly-owned subsidiary of Buyer ("Merger Subsidiary") and PHARMHOUSE CORP., a
New York corporation (the "Company"), propose to enter into an Agreement and
Plan of Merger to be dated as of the date hereof (the "Merger Agreement";
capitalized terms used herein and not otherwise defined are used herein as
defined in the Merger Agreement), pursuant to which Merger Subsidiary will be
merged with and into the Company (the "Merger"), and each outstanding share of
the common stock, par value $.01, of the Company (the "Company Common Stock")
will be converted into the right to receive cash on the basis described in the
Merger Agreement;
WHEREAS, the Holder, individually or as trustee or custodian, is the
owner of the number of shares of Company Common Stock set forth opposite the
Holder's name on Schedule I to this Agreement (the "Subject Shares"); and
WHEREAS, as a condition of its entering into the Merger Agreement, Buyer
has requested that the Holder agree, and the Holder has agreed, (i) to vote
the Subject Shares with respect to the Merger Agreement and the Merger and
(ii) to make certain payments to Buyer, upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
Section 1. Agreement to Vote Shares. (a) At every annual or
special meeting of the shareholders of the Company and at every continuation
or adjournment thereof, and on every action or approval by written consent of
the shareholders of the Company in lieu of any such meeting, in which in
either case the Merger Agreement and the Merger are being considered or voted
on, the Holder shall vote the Subject Shares in accordance with the
recommendations of the Board of Directors of the Company. The Holder may vote
the Subject Shares on all other matters.
(b) No person executing this Agreement who is or becomes during the
term hereof a director of the Company makes any agreement or understanding
herein in his or her capacity as such director. The Holder signs solely in
his or her capacity as the owner of the Subject Shares.
Section 2. Agreement to Make Payments. In the event that (i) an
Acquisition Proposal shall have been made known to the Company or any Company
Subsidiary, or has been made directly to the Company's stockholders generally
or any person shall have publicly announced an intention (whether or not
conditional) to make an Acquisition Proposal and thereafter Company
Stockholder Approval is not obtained, or (ii) the Merger Agreement is
terminated by Buyer pursuant to Section 9.01(h) or Section 9.01(l) thereof,
and if in either case during the period ending June 30, 2000 the Holder sells,
assigns or transfers all or any of the Subject Shares (whether by operation of
law or otherwise) for consideration in excess of $3.25 per share, then Holder
shall pay to Buyer all consideration received by the Holder in connection with
such transfer in excess of $3.25 per share. The Holder shall make such
payment to Buyer promptly, and in any event no later than three business days,
after receipt by the Holder of the consideration from the holder's transferee
as aforesaid.
Section 3. Representations and Warranties of the Holder. The
Holder hereby represents and warrants to Buyer that:
(a) this Agreement has been duly executed and delivered by the
Holder, and is the legal, valid and binding obligation of the Holder;
(b) no consent of any court, governmental authority,
beneficiary, co-trustee or other person is necessary for the execution,
delivery and performance of this Agreement by the Holder;
(c) the Holder owns the Subject Shares free and clear of any
pledge, lien, security interest, charge, claim, equity or encumbrance of any
kind, other than this Agreement;
(d) the Holder has the present power and right to vote all of
the Subject Shares; and
(e) except as provided herein, the Holder has not (i) granted
any power-of-attorney or other authorization or interest with respect to any
of the Subject Shares, (ii) deposited any of the Subject Shares into a voting
trust or (iii) entered into any voting agreement of other arrangement with
respect to the voting of any of the Subject Shares.
Section 4. Representations and Warranties of Buyer. Buyer hereby
represents and warrants to the Holder that:
(a) this Agreement has been duly executed and delivered by
Buyer, and is the legal, valid and binding obligation of Buyer; and
(b) no consent of any court, governmental authority,
beneficiary, co-trustee or other person is necessary for the execution,
delivery and performance of this Agreement by Buyer.
Section 5. Covenants of the Holder. The Holder hereby agrees and
covenants that:
(a) any shares of capital stock of the Company (including the
Company Common Stock) that the Holder purchases or with respect to which the
Holder otherwise acquires beneficial ownership (including by reason of stock
dividends, split-ups, recapitalizations, combinations, exchanges of shares or
the like) after the date of this Agreement and prior to the termination of the
covenants of the Holder set forth in Section 1 shall be considered Subject
Shares and subject to the covenants of Section 1 and Section 2 of this
Agreement;
(b) the Holder will not sell, assign, pledge or otherwise
transfer any of the Subject Shares at any time prior to the termination of the
covenants of the Holder set forth in Section 1; provided, however, that the
foregoing limitation shall not apply to any transfer effected pursuant to the
laws of descent and distribution or intestate succession following the death
of the Holder during the subject period, but shall apply to any further
transfer by any permitted successor or assign of the Holder pursuant to such
laws; and
(c) during the period beginning on the date of the termination
of the covenants of the Holder set forth in Section 1 and ending on June 30,
2000, the Holder will not sell, assign or transfer all or any of the Subject
Shares other than for value in a bona fide arms' length transaction to an
unaffiliated transferee; provided, however, that the foregoing limitation
shall not apply to any transfer effected pursuant to the laws of descent and
distribution following the death of the Holder during the subject period, but
shall apply to any further transfer by any permitted successor or assign of
the Holder pursuant to such laws.
Section 6. Termination. This covenants of the Holder set forth in
Section 1 hereof shall terminate on the earlier of (a) the Effective Time and
(b) the date 30 calendar days after the date on which the Merger Agreement is
terminated. The covenants of the Holder set forth in Section 2 hereof shall
terminate on June 30, 2000.
Section 7. Notices. All notices, requests and other communications
given or made pursuant hereto to any party hereunder shall be in writing
(including facsimile or similar writing) and shall be given:
if to Buyer:
Phar-Mor, Inc.
00 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
with a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. XxXxx, Xx.
Facsimile: 000-000-0000
if to the Holder:
Xxxxxx Xxxxx
00 Xxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Facsimile: 000-000-0000
with a copy to:
Xxxxxxx, Xxxxxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: 000-000-0000
and to:
Xxxxxxx, Xxxxxxx & Xxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile: (000) 000-0000
or such other address or facsimile numbers as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by facsimile,
when such facsimile is transmitted to the facsimile number specified in this
Section and the appropriate facsimile confirmation is received, or (b) if
given by any other means, when delivered at the address specified in this
Section.
Section 8. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by Buyer and the Holder or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 9. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
Section 10. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the prior written consent of each of the other parties hereto.
Section 11. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by all of the other parties
hereto.
Section 12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without
reference to conflict of laws principles applied in such State.
Section 13. Jurisdiction; Jury Trial Waiver. (a) Any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with this Agreement or the transactions
contemplated by this Agreement shall be brought in any federal court located
in the Southern District of the State of New York or any New York state court
sitting in New York City, and each of the parties hereto hereby consents to
the exclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and waives any
objection to venue laid therein. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the State of New York. Without limiting the generality of the
foregoing, each party hereto agrees that service of process upon such party at
the address referred to in Section 8, together with written notice of such
service to such party, shall be deemed effective service of process upon such
party.
(b) EACH PARTY HERETO HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING INSTITUTED BY EITHER OF THEM AGAINST THE OTHER WHICH
PERTAINS DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, ANY ALLEGED TORTIOUS
CONDUCT BY ANY PARTY, OR IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR
RELATES TO THE RELATIONSHIP AMONG THE PARTIES HERETO.
Section 14. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement in any federal court located in the Southern District of the State
of New York or any New York state court sitting in New York City, in addition
to any remedy to which they are entitled at law or in equity.
Section 15. Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words "include," "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation." The phrases "the date of this Agreement,"
"the date hereof," and terms of similar import, unless the context otherwise
requires, shall be deemed to refer to December 17, 1998.
Section 16. Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior written and oral and all contemporaneous oral agreements
and understandings with respect to the subject matter hereof. Each party
acknowledges and agrees that no other party hereto makes any representations
or warranties, whether express or implied, other than the express
representations and warranties contained herein.
Section 17. Severability. If any term or other provision of this
Agreement is determined to be invalid, illegal or incapable of being enforced
by any rule of law, or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated herein is not
affected in any manner materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
caused this Agreement to be duly executed by their respective authorized
officers, as of the day and year first above written.
Phar-Mor, INC.
By:
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Name:
Title:
THE HOLDER
By
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Name: Xxxxxx Xxxxx
SCHEDULE I
HOLDER NUMBER OF SHARES
Xxxxxx Xxxxx 62,794
