EXHIBIT 99.1
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "Agreement"), dated as of April 30, 1996,
is made by and among Good Samaritan Supply Services, Inc., a South Dakota
corporation (the "Company"), The Evangelical Lutheran Good Samaritan Foundation,
a Minnesota non-profit corporation (the "Foundation"), American Medserve
Corporation, a Delaware corporation ("AMC"), and any other parties which may
become parties to this Agreement after the date hereof as provided in Section
3.6 below.
RECITALS
WHEREAS, the Foundation currently owns 1,000 Common Shares (as hereinafter
defined), constituting all of the issued and outstanding capital shares of the
Company;
WHEREAS, AMC and the Company concurrently herewith entered into a Share
Purchase Agreement, bearing even date herewith (the "Share Purchase Agreement"),
providing for the Company's sale and issuance of 666.667 newly-issued Common
Shares to AMC; and
WHEREAS, the parties hereto wish to set forth herein their agreements as to
the composition of the Board of Directors of the Company, transfers of the
Common Shares, certain conversion rights of the Foundation and its Affiliates,
put and call rights of the parties, certain registration rights, and the other
matters described below.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, the parties hereto, upon the terms and subject
to the conditions herein, hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Definitions. The following terms when used in this Agreement
shall have the following respective meanings:
"AFFILIATE" shall mean with respect to any Person, any other Person which
directly or indirectly controls, is controlled by, or is under common control
with such Person or any Affiliate of such other Person, where "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of the "controlled" Person, whether
through ownership of voting securities, by contract, or otherwise.
Notwithstanding the foregoing, in no
event shall AMC or any of its Affiliates be deemed an Affiliate of the
Foundation or any of the Foundation's Affiliates, nor shall the Foundation or
any of its Affiliates be deemed an Affiliate of AMC or any of its Affiliates.
"AMC IPO COMPANY" shall mean (i) AMC and (ii) any Person which is an
Affiliate of AMC and directly or indirectly owns any Common Shares.
"AMC SHARES" has the meaning set forth in Section 5.1.
"AMC SHAREHOLDERS" means AMC and/or any Affiliates of AMC holding Common
Shares.
"BONA FIDE OFFER" shall mean an offer to a Person from a financially
responsible Person who is not an Affiliate of such Person to purchase all or any
portion of the Common Shares owned by such Person for a purchase price payable
in cash at closing.
"CHANGE IN CONTROL" shall have the meaning specified in Section 6.7.
"COMMON SHARES" means the shares, par value $.01 per share, of the Company.
"GAAP" means generally accepted accounting principles, consistently
applied.
"GOOD SAMARITAN SHAREHOLDERS" means the Foundation and/or any Affiliates of
the Foundation holding Common Shares.
"INDEBTEDNESS" means all indebtedness for borrowed money (including
purchase money obligations) maturing one year or more from the date of creation
or incurrence thereof or renewable or extendible at the option of the debtor to
a date one year or more from the date of creation or incurrence thereof, all
indebtedness under revolving credit arrangements extending over a year or more,
all capitalized lease obligations and all guarantees of any of the foregoing.
"INVESTMENT" as applied to any Person means (i) any direct or indirect
purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person (excluding deposits
in or certificates of deposit issued by banks or other financial institutions)
and (ii) any capital contribution by such Person to any other Person.
"LIEN" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against the Person making such sale or
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any Affiliate thereof, any filing or agreement to file a financing statement as
debtor under the Uniform Commercial Code or any similar statute other than to
reflect ownership by a third party of property leased to a lessee under a lease
which is not in the nature of a conditional sale or title retention agreement,
or any subordination arrangement in favor of another Person (other than any
subordination arising in the ordinary course of business).
"PERMITTED LIENS" means (i) Liens with respect to taxes not yet due and
payable or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established in accordance with
GAAP; (ii) deposits or pledges made in connection with, or to secure payment of,
utilities or similar services, workers' compensation, unemployment insurance,
old age pensions or other social security obligations; (iii) purchase money
security interests and liens securing rental payments under capital lease
arrangements; (iv) interests or title of a lessor under any lease permitted by
this Agreement; (v) mechanics', materialmen's or contractors' liens or
encumbrances or any similar lien or restriction for amounts not yet due and
payable or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established in accordance with
GAAP; and (vi) easements, rights-of-way, restrictions and other similar charges
and Liens not interfering with the ordinary conduct of the business of the
Person subject thereto or materially detracting from the value of the assets
thereof.
"PERSON" means an individual, corporation, partnership, joint venture,
trust, limited liability company, government, or other legal entity of any
nature whatsoever.
"PROPORTIONATE SHARE" shall mean, as used herein to determine the number of
Reoffered Shares (as defined in Section 3.2(c) hereof) which a Shareholder is
entitled to purchase, the same proportion of the Common Shares available for
purchase as the Common Shares held by such Shareholder bears to the Common
Shares held by all the Shareholders who have elected to purchase Common Shares
from the Selling Shareholder.
"PURCHASE PRICE" shall mean the purchase price per Common Share set forth
in the applicable Bona Fide Offer.
"RELATION" shall mean with respect to any natural Person, any individual
related by blood, marriage or adoption to such Person.
"SEC" shall mean the Securities and Exchange Commission, or any other
entity which succeeds to the duties and functions thereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time.
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"SHAREHOLDER" shall mean each of AMC, the Foundation and any holder of
Common Shares who becomes a party to this Agreement as contemplated herein.
"SHAREHOLDER OFFER" shall mean an irrevocable offer to sell Common Shares
to the Company and the Shareholders on the terms and conditions set forth in
Section 3.2, which shall include a copy of the applicable Bona Fide Offer and
shall set forth the terms of the proposed sale in reasonable detail, including,
without limitation, the name and address of the prospective buyer, the purchase
price and other terms and conditions of payment (or the basis for determining
the purchase price and other terms and conditions), the date on or about which
such sale is to be consummated, and the number of Common Shares to be sold.
"SOCIETY" shall mean The Evangelical Lutheran Good Samaritan Society, a
South Dakota non-profit corporation.
"SUBSIDIARY" means any Person as to which the Company directly or
indirectly owns a majority of the equity interests.
"TRANSFER" means any sale, assignment, pledge, hypothecation, encumbrance,
disposition, transfer (including, without limitation, a transfer by will or
intestate distribution), gift or attempt to create or grant a security interest
in Common Shares, whether voluntary, involuntary, by operation of law or
otherwise.
SECTION 2. THE BOARD OF DIRECTORS OF THE COMPANY;
GOVERNANCE; TAX SHARING AGREEMENT
2.1 COMPOSITION OF THE BOARD OF DIRECTORS. Each Shareholder agrees that
while this Agreement is in effect it will vote all of the Common Shares owned or
held by it and will take all other necessary or desirable actions within its
control (including, without limitation, calling and attending meetings in person
or by proxy for purposes of obtaining a quorum and execution of written consents
in lieu of meetings), and the Company shall take all necessary or desirable
actions within its control (including, without limitation, calling special board
and stockholder meetings), so that:
(i) At any time that the AMC Shareholders own at least 40% but less
than 50.1% of the then-outstanding Common Shares, a five (5) member Board of
Directors of the Company consisting of the following individuals shall be
elected and installed: (a) the President/Chief Executive Officer of the Company
from time to time, (b) two (2) members designated by AMC, and (c) two (2)
members designated by the Foundation;
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(ii) At any time that the AMC Shareholders own 50.1% or more of the
then-outstanding Common Shares, but less than 80% of the then-outstanding Common
Shares, a six (6) member Board of Directors of the Company consisting of the
following individuals shall be elected and installed: (a) the President/Chief
Executive Officer of the Company from time to time, (b) three (3) members
designated by AMC, and (c) two (2) members designated by the Foundation;
(iii) At any time that the AMC Shareholders own 80% or more of the
then-outstanding Common Shares, a ten (10) member Board of Directors of the
Company consisting of the following individuals shall be elected and installed:
(a) the President/Chief Executive Officer of the Company from time to time, (b)
eight (8) members designated by AMC, and (c) one (1) member designated by the
Foundation;
(iv) the composition of the board of directors of each Subsidiary (a
"Sub Board") shall be the same as that of the Company's Board of Directors; and
(v) any committees of the Company's Board of Directors or of any Sub
Board, other than the compensation committee of the Company's Board of
Directors, shall be created only upon approval of such number of Directors as
would constitute a majority of the number of Directors as the Company's Board of
Directors is required to consist of pursuant to this Section 2.1 as of the time
of the creation of such committee, and each such committee (if any) shall
include at least one (1) member of the Board of Directors designated by AMC and
one (1) member of the Board of Directors designated by the Foundation, in each
case unless all Directors then in office affirmatively vote otherwise.
Notwithstanding the foregoing, during any period during which either
the Good Samaritan Shareholders own no Common Shares or the AMC Shareholders own
less than forty percent (40%) of the then-outstanding Common Shares, this
Section 2.1 shall not apply.
The Foundation and AMC may change any of their designees to the Board of
Directors and any Sub Board at any time without cause upon written notice to the
other Shareholders, at which time the other Shareholders shall forthwith take
such action as the Shareholder changing its designees may request to change
forthwith the composition of the Board and any Sub Board, including execution of
a unanimous written consent of the Shareholders or calling and attending a
special meeting of Shareholders.
2.2 SELECTION OF SUCCESSOR PRESIDENT/CHIEF EXECUTIVE OFFICER. In the
event that the office of President/Chief Executive Officer of the Company should
at any time become vacant for any reason, AMC and the Foundation shall each
cause their respective designees to the Board of Directors to select a new
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person to serve in such position in accordance with the following:
(a) If AMC and the Foundation can agree in writing upon a person to fill
such position and the terms of his or her employment, and such person is willing
to serve in accordance with such terms, the Board of Directors of the Company
shall elect such person as the President/CEO of the Company in accordance with
such terms (a "Permanent CEO"); and
(b) If AMC and the Foundation are unable to agree upon a Permanent CEO as
set forth in clause (a) above, the Board of Directors of the Company shall elect
as the acting President/CEO of the Company (the "Acting CEO"):
(i) such person as may be designated by the Foundation, for a term of
one (1) year or until a Permanent CEO is selected, whichever occurs first;
(ii) provided that no Permanent CEO has been selected, upon the
expiration of the one (1) year term specified in clause (b)(i) above, such
person as may be designated by AMC, for a term of one (1) year or until a
Permanent CEO is selected, whichever occurs first; and
(iii) thereafter, provided that no Permanent CEO has been selected,
upon the expiration of the one (1) year term of any Acting CEO, such person
as may be designated by (x) the Foundation, if AMC designated the Acting
CEO whose term is then expiring or (x) AMC, if the Foundation designated
the Acting CEO whose term is then expiring, in each case for a term of one
(1) year or until a Permanent CEO is selected.
Notwithstanding the foregoing, this Section 2.2 shall be of no force or effect
during any period (i) that the Good Samaritan Shareholders hold ten percent
(10%) or less of the then-outstanding Common Shares, or (ii) that the AMC
Shareholders hold less than forty percent (40%) of the then-outstanding Common
Shares, or (iii) that the AMC Shareholders own eighty percent (80%) or more of
the then-outstanding Common Shares. Each Shareholder agrees that while this
Agreement is in effect it will vote all of the Common Shares owned or held by it
and will take all other necessary or desirable actions within its control
(including, without limitation, calling and attending meetings in person or by
proxy for purposes of obtaining a quorum and execution of written consents in
lieu of meetings), and the Company shall take all necessary or desirable actions
within its control (including, without limitation, calling special board and
stockholder meetings), as may be necessary to effectuate this Section 2.2,
including, without limitation, any amendments to the articles of incorporation
or bylaws of the Corporation. Notwithstanding anything in Section 8.1 to the
contrary, the
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restrictions of Section 8.1 will not apply with respect to any such action
described in the previous sentence.
2.3 LOCATION OF PRINCIPAL EXECUTIVE OFFICE. Unless and until either the
Good Samaritan Shareholders or the AMC Shareholders hold less than ten percent
(10%) of the then-outstanding Common Shares, the Shareholders shall cause the
principal executive office of the Company to remain in St. Xxxx, Minnesota.
2.4 TAX SHARING AGREEMENT. In any taxable year during which or after
which the Company becomes a member of an Affiliated Group (as defined in Section
1504 of the Internal Revenue Code of 1986, as amended, or any similar state or
local law) the common parent of which is AMC (the "AMC Affiliated Group"), the
Company shall join with AMC in filing consolidated returns for Federal, state
and local income and franchise tax purposes. In such event, the Company and AMC
shall enter into a tax allocation agreement pursuant to which (1) AMC will agree
to file all such consolidated returns, to pay or arrange for the payment of all
taxes shown as due on such returns, and to act as agent for the AMC Affiliated
Group in connection with the determination of the ultimate liability of the AMC
Affiliated Group for such taxes, (2) the Company will agree to pay to AMC, or to
the appropriate taxing authority at the direction of AMC, the amount of all
Federal, state and local corporate income and franchise taxes that would be
payable by the Company if the Company filed separate tax returns for all periods
beginning on or after the Closing Date, and (3) AMC and the Company will agree
to such other terms and conditions as are necessary to fairly apportion
responsibility for all Federal, state and local corporate income and franchise
taxes payable (or tax refunds receivable) by the AMC Affiliated Group among the
members of such AMC Affiliated Group. Such agreement shall also provide that
the Company will be paid currently the full tax benefit of any operating loss
used by other members of the AMC Affiliate Group to the extent that the Company
could otherwise have carried back that loss to its earlier years if the Company
filed separate tax returns for all periods beginning on or after the date of
this Agreement. Such tax allocation agreement shall also contain such other
terms as are normal, customary and commercially reasonable with respect to
similar agreements among members of affiliated groups of corporations.
SECTION 3. RESTRICTIONS ON TRANSFERS OF COMMON SHARES
3.1 RESTRICTION OF TRANSFERS. Except for Transfers of Common Shares made
pursuant to a Bona Fide Offer and in accordance with the provisions of this
Section 3 and Transfers of Common Shares which are excepted from the
restrictions on Transfer contained in this Section 3 by operation of Section
3.3,
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no Shareholder shall make any Transfer of Common Shares; PROVIDED, HOWEVER, that
(i) if at any time the Good Samaritan Shareholders hold ten percent (10%) or
less of the then-outstanding Common Shares, then the AMC Shareholders shall be
free to Transfer their Common Shares without regard to whether such Transfer is
made pursuant to a Bona Fide Offer and without first complying with the
procedure set forth in Section 3.2, and (ii) if at any time the AMC Shareholders
hold ten percent (10%) or less of the then-outstanding Common Shares, then the
Good Samaritan Shareholders shall be free to Transfer their Common Shares
without regard to whether such Transfer is made pursuant to a Bona Fide Offer
and without first complying with the procedure set forth in Section 3.2. Any
Transfer of Common Shares by a Shareholder which is not made in accordance with,
or which violates any of, the provisions of this Section 3, shall be null and
void and have no effect, and the Company shall not recognize any such Transfer
or recognize the Transferee as the holder of such Common Shares for any purpose.
3.2 RIGHTS OF FIRST REFUSAL. (a) Any Shareholder desiring to make a
Transfer of all or any portion of his, her or its Common Shares (a "Selling
Shareholder") (including any Common Shares acquired after the date hereof)
pursuant to a Bona Fide Offer shall first deliver to the Company and the other
Shareholders a Shareholder Offer in respect of such Common Shares (the "Offered
Shares").
(b) The Company may, within 45 days after receipt of any Shareholder
Offer, elect, in accordance with Section 3.2(d), to purchase any or all of the
Offered Shares for a purchase price equal to the product of the per share
Purchase Price multiplied by the number of Offered Shares to be purchased by the
Company, payable in cash at closing.
(c) In the event that the Company does not elect to purchase all of the
Offered Shares within the 45-day period specified above, the Company shall give
written notice to the Shareholders (the "Reoffer Notice") of the number of
Offered Shares available for purchase (the "Reoffered Shares") on or before the
final day of such 45-day period. Each of the other Shareholders may, within 15
days after receipt of the Reoffer Notice, elect to purchase any or all of the
Reoffered Shares for a purchase price equal to the product of the Purchase Price
multiplied by the number of Reoffered Shares to be purchased by the Shareholder,
payable in cash at closing.
(d) Acceptance of any Shareholder Offer or any offer of Reoffered Shares
shall be evidenced by a written notice given by the Company or a Shareholder
electing to purchase Reoffered Shares ("Purchasing Shareholder") to the Selling
Shareholder within the applicable time period. Each such acceptance shall
specify the number of Common Shares which the Company or such Purchasing
Shareholder desires to purchase. In the event that more than one Shareholder
elects to purchase Reoffered Shares, the
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number of Reoffered Shares purchasable by each Purchasing Shareholder shall be
determined in accordance with the following procedures:
(i) if the Purchasing Shareholder has elected to purchase a number of
Reoffered Shares equal to or less than its Proportionate Share of the Reoffered
Shares, it shall be entitled (and shall be deemed to have irrevocably elected)
to purchase the number of Reoffered Shares that it has elected to purchase;
(ii) if the Purchasing Shareholder has elected to purchase a number
of Reoffered Shares greater than its Proportionate Share of Reoffered Shares, it
shall be entitled (and shall be deemed to have irrevocably elected) to purchase
(A) its Proportionate Share of the Reoffered Shares, plus
(B) the lesser of
(1) the number of Reoffered Shares which such Purchasing
Shareholder has elected to purchase in excess of its Proportionate Share,
or
(2) the same proportion of the total number of Reoffered
Shares remaining after each Purchasing Shareholder shall have been
allocated Common Shares pursuant to subsection 3.2(d)(i) and 3.2(d)(ii)(A)
above as (x) the number of Common Shares owned by such Purchasing
Shareholder bears to (y) the total number of Common Shares owned by all
Purchasing Shareholders which have elected to purchase Common Shares in
excess of their respective Proportionate Share of the Reoffered Shares;
PROVIDED, HOWEVER, that if any Reoffered Shares remain to be purchased after the
foregoing calculation, the allocation of such remaining Reoffered Shares shall
be determined by repeated application of the calculation stated in (1) and (2)
above until all Reoffered Shares have been allocated.
Notwithstanding anything to the contrary stated in this Section 3.2,
neither the Company nor any Shareholder shall be entitled to purchase Offered
Shares unless they shall have collectively elected to purchase all the Offered
Shares.
(e) In the event that the Company and the Purchasing Shareholders
collectively elect to purchase all of the Offered Shares in accordance with
Sections 3.2(c) and 3.2(d), the Company and the Purchasing Shareholders shall
close such purchase of Common Shares at the principal office of the Company
promptly and in any event within 30 days after the date on which either (i) the
Company elected to purchase all of the Offered Shares, or (ii) the Company
and/or the Purchasing Shareholders collectively elected to
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purchase all of the Offered Shares, unless the parties agree on a different
place or time. At the closing of the Transfer of Common Shares contemplated by
this Section 3, (i) the Selling Shareholder shall deliver to the Company and/or
the Purchasing Shareholder(s) the certificate or certificates representing the
Offered Shares, properly endorsed for Transfer and with documentary stamps
affixed (the cost of which shall be borne by the Company), free and clear of all
security interests, liens and restrictions other than those imposed by this
Agreement, and (ii) the Company and/or the Purchasing Shareholder(s) shall
deliver to the Selling Shareholder payment in full of the purchase price.
Payment of the purchase price shall be made by certified check or wire transfer
to such accounts as are designated in writing by the Selling Shareholder.
(f) In the event that the Company and the other Shareholders do not
collectively elect to purchase all of the Offered Shares by the end of the 15-
day period specified in Section 3.2(c), all of the Offered Shares may be
Transferred by the Selling Shareholder to the Person(s) named in the Shareholder
Offer free of the rights of first refusal set forth in this Section 3.2 at any
time within 30 days after the expiration of such period, on the terms described
in the Shareholder Offer and applicable Bona Fide Offer; provided, however, that
such Transfer shall be permitted only if the Transferee shall have executed and
delivered to the Company and each Shareholder an instrument pursuant to which
such Transferee joins in and agrees to be bound by this Agreement as a
Shareholder. In the event that a Transfer pursuant to the Bona Fide Offer is
not consummated by the proposed Transferee and the Selling Shareholder within
such 30-day period, the Selling Shareholder may not thereafter Transfer the
Offered Shares without again complying with this Section 3.2.
3.3 UNRESTRICTED TRANSFERS. Notwithstanding any other provision of this
Section 3, the following Transfers of Common Shares shall not be subject to the
rights of first refusal contained in Section 3.2:
(a) any Transfer of Common Shares made in connection with a public
offering of Common Shares made by the Company pursuant to a registration
statement which has become effective under the Securities Act or to the
public through a broker, dealer or market maker pursuant to the provisions
of Rule 144 adopted under the Securities Act;
(b) any Transfer of Common Shares to the Company;
(c) any Transfer of Common Shares a Shareholder is required or
entitled to make pursuant to Sections 5 or 6 hereof; and
(d) any Transfer of Common Shares by a Shareholder to an Affiliate or
Relation of such Shareholder or to a trust established for the sole
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benefit of such Shareholder or a Relation of such Shareholder, provided,
however, that (x) AMC and its Affiliates shall be entitled to make such
Transfers only to Persons directly or indirectly majority owned or
controlled by AMC, (y) such Transfer shall only be permitted if the
Transferee shall have executed and delivered to the Company and each
Shareholder an instrument pursuant to which such Transferee joins in and
agrees to be bound by this Agreement as a Shareholder and further agrees to
be bound by all of the obligations hereunder of the Shareholder making such
Transfer, and (z) if any such Transferee which is an Affiliate of a
Shareholder shall at any time thereafter no longer be an Affiliate thereof,
such Transferee shall be obligated to Transfer its Common Shares back to
such Shareholder.
3.4 SECURITIES LAW RESTRICTIONS. Notwithstanding any other provision in
this Agreement, but subject to express written waiver by the Company in the
exercise of its good faith and reasonable judgment, no Shareholder shall
Transfer any Common Shares without the registration of the Transfer of such
Common Shares under the Securities Act and applicable state securities laws or
until the Company shall have received such legal opinions or other assurances
that such Transfer is exempt from the registration requirements under the
Securities Act and applicable state securities laws as the Company in its good
faith and reasonable discretion deems appropriate in light of the facts and
circumstances relating to such proposed Transfer, together with such
representations, warranties and indemnifications from the transferor and the
Transferee as the Company in its good faith and reasonable discretion deems
appropriate to confirm the accuracy of the facts and circumstances that are the
basis for any such opinion or other assurances and to protect the Company and
the Shareholders from any liability resulting from any such Transfer.
3.5 LEGENDS. All certificates representing Common Shares now or hereafter
owned by the Shareholders shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY PORTION HEREOF OR INTEREST HEREIN MAY BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE
DISPOSED OF ("TRANSFER") UNLESS THE SAME IS REGISTERED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND THE COMPANY SHALL HAVE RECEIVED, AT THE
EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF SUCH EXEMPTION REASONABLY
SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE, AMONG
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OTHER THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY).
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO (I) RESTRICTIONS ON
TRANSFER, AND (II) CERTAIN MANDATORY "CALL" OPTIONS, EACH OF WHICH ARE
CONTAINED IN THAT CERTAIN SHAREHOLDERS AGREEMENT DATED AS OF APRIL 30, 1996
TO WHICH THE COMPANY IS A PARTY, AS AMENDED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO
THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST DELIVERED TO THE
COMPANY.
All certificates evidencing Common Shares hereafter issued to a Shareholder for
any reason or purpose shall, when issued, bear a similar legend. The Company
shall remove the foregoing legend, at the request of any Shareholder, when
appropriate.
3.6 FUTURE SHAREHOLDERS TO BECOME PARTIES TO THIS AGREEMENT.
Notwithstanding any other provision of this Agreement to the contrary, unless
both the Foundation and AMC shall have otherwise consented in writing, no party
to this Agreement (including, without limitation, the Company and any Person
becoming a party to this Agreement after the date hereof) shall Transfer any
Common Shares to any Person (including, without limitation, upon any initial
issuance of Common Shares by the Company) unless and until the Transferee shall
have executed and delivered to the Company and each Shareholder an instrument
pursuant to which such Transferee joins in and agrees to be bound by this
Agreement.
SECTION 4. COMPOSITION OF AMC BOARD UPON INITIAL PUBLIC
OFFERING OF AMC SHARES
4.1 APPOINTMENT TO AMC BOARD. Subject to Section 4.2, not later than five
(5) days after the closing of any initial public offering by an AMC IPO Company
of the common equity issued by such AMC IPO Company, AMC shall cause such AMC
IPO Company to cause XXXX X. XXXXXXX (or such other individual who may be Chief
Executive Officer of The Evangelical Lutheran Good Samaritan Society) and, if
and for so long as he is Chief Executive Officer of the Company, Xxxxxxx X.
Xxxxxxx, to be added as members of the Board of Directors of such AMC IPO
Company and thereafter to nominate such individuals for election to the Board of
Directors of such AMC IPO Company in each subsequent election of directors
thereof.
4.2 TERMINATION OF SECTION 4.1. The obligations of the AMC IPO Company
pursuant to Section 4.1 shall terminate at such time as both of the following
clauses (i) and (ii) are true: (i) either the AMC Shareholders own ten percent
(10%) or less of the Company's then-outstanding Common Shares or the Good
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Samaritan Shareholders own ten percent (10%) or less of the Company's
then-outstanding Common Shares; and (ii) the Foundation and its Affiliates
collectively own five percent (5%) or less of the outstanding AMC Shares of any
AMC IPO Company.
SECTION 5. CONVERSION RIGHTS
5.1 GENERALLY. On the date of or at any time after such time as any AMC
IPO Company engages in an initial public offering of the common equity issued by
such AMC IPO Company (the "AMC Shares"), each Good Samaritan Shareholder shall
have the option ("Conversion Option") to elect to exchange any or all of its
Common Shares for AMC Shares issued by such AMC IPO Company in the manner and at
the exchange ratio provided in this Section 5; PROVIDED, HOWEVER, that (i) until
three (3) years after the date of this Agreement, the maximum aggregate number
of Common Shares which the Good Samaritan Shareholders may elect to exchange
pursuant to this Section 5 shall be two hundred (200) (which number shall be
adjusted as necessary to account for any stock split, stock dividend, merger,
consolidation, recapitalization or similar event affecting the number of Common
Shares outstanding), and (ii) until five (5) years after the date of this
Agreement, such Conversion Option shall not be exercisable to the extent that,
after any such exercise, the aggregate number of Common Shares held by the Good
Samaritan Shareholders would be ten percent (10%) or less of the then-issued and
outstanding Common Shares. Any Good Samaritan Shareholder shall exercise its
Conversion Option by giving written notice of such exercise (a "Conversion
Notice") to AMC, which Conversion Notice shall specify the number of Common
Shares as to which the Good Samaritan Shareholder is then exercising its
Conversion Option (the "Converting Shares"). AMC agrees to cause any AMC IPO
Company to comply with the obligations of such AMC IPO Company pursuant to this
Agreement.
5.2 CONVERSION FORMULA. (a) The number of AMC Shares (or fractions
thereof) issuable in exchange for the Converting Shares upon any exercise of the
option set forth in Section 5.1 (the "AMC Shares Issuable") shall be determined
as of the last day (the "Determination Date") of the last completed month
preceding the date on which any Conversion Notice is deemed given pursuant to
this Agreement, using the formula set forth in Sections 5.2(d) and (e) hereof
based upon the factors set forth in Sections 5.2(b) and (c) hereof.
Notwithstanding the foregoing, (i) in the event that, applying the foregoing
definition, the Determination Date would be a date prior to twenty (20) business
days after the date of any initial public offering of the AMC Shares (the "20th
Trading Day"), then the Determination Date shall instead be the last day of the
month in which the 20th Trading Day falls, and (ii) in the event that AMC
exercises its option to purchase "Control Shares" pursuant to Section 1.8 of the
Share Purchase Agreement prior to an exercise of the Conversion Option by a Good
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Samaritan Shareholder, then the purchase and sale of such Control Shares shall
be deemed to have occurred on the day before the Determination Date if such
purchase and sale actually occurs, for purposes of all definitions and
calculations under this Section 5.
(b) For purposes of this Agreement, the following terms shall have the
following meanings:
"AMC ADJUSTED NET INCOME" shall mean the consolidated net income of
the AMC IPO Company and its subsidiaries (excluding the Company, if the Company
is then a subsidiary of such AMC IPO Company) for the twelve (12) month period
ending on the Determination Date (the "Period"), determined in accordance with
GAAP excluding any effects of incremental goodwill created by purchase
accounting resulting from the AMC IPO Company's investment(s) in the Company,
adjusted on a retroactive pro-forma basis (i) to adjust for the effects of
acquisitions, divestitures, discontinued operations, changes in law and
regulations (e.g., changes in the maximum prices chargeable under applicable
law) which AMC or the Foundation can demonstrate will affect net income, and
other major changes in the business (e.g., the gain or loss of a major customer
relationship), as if all such events occurred on the first day of the Period,
and (ii) to adjust for any other extraordinary, unusual or non-recurring gains
or losses.
"AMC INTEREST" shall mean the percentage of the outstanding Common
Shares which is owned by the AMC IPO Company or any of its direct or indirect
subsidiaries as of the Determination Date.
"AMC SHARES OUTSTANDING" shall mean the number of AMC Shares issued
and outstanding as of the Determination Date.
"AMC SHARE PRICE" shall mean the average closing price per share of
the AMC Shares for the twenty (20) consecutive business days prior to the
Determination Date, as reported on the principal securities exchange or
interdealer quotation system on which the AMC Shares are traded for such period.
"AMORTIZATION PERIOD" shall mean the period over which the AMC IPO
Company will amortize the accounting goodwill created on its balance sheet as a
consequence of its acquisition of Common Shares pursuant to this Section 5. The
Shareholders agree that the Amortization Period shall be the longest period
allowable under the rules, regulations and policies of the SEC, and in no event
shorter than the period used by the AMC IPO Company to amortize goodwill
associated with its investment in any like company. In the event that the AMC
IPO Company and the Foundation disagree about what period is the longest
allowable period for such purposes, the AMC IPO Company shall promptly, by means
of a letter, pre-filing notification or other form of communication which is
appropriate under the circumstances, seek to obtain the SEC's acquiescence in
the AMC IPO Company's use of
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the longer of the two amortization periods proposed by the AMC IPO Company and
the Foundation. In such written communication and any subsequent submissions or
oral communications with the SEC, the AMC IPO Company shall advocate (and shall
cause its accountants and attorneys to advocate) for such longer period in
accordance with the reasonable suggestions of the party proposing the use of
such period. In the event of any such communication to the SEC, the
Amortization Period shall be such Amoritization Period as the SEC indicates to
be the longest allowable under the circumstances.
"BOOK VALUE" shall mean the book shareholders' equity of the Company
as of the Determination Date, determined in accordance with GAAP.
"COMPANY ADJUSTED NET INCOME" shall mean the consolidated net income
of the Company and its Subsidiaries for the Period, determined in accordance
with GAAP excluding any effects of incremental goodwill created by purchase
accounting resulting from the AMC IPO Company's investment(s) in the Company,
adjusted on a retroactive pro-forma basis (i) to adjust for the effects of
acquisitions, divestitures, discontinued operations, changes in law and
regulations (e.g., changes in the maximum prices chargeable under applicable
law) which AMC or the Foundation can demonstrate will affect net income, and
other major changes in the business (e.g., the gain or loss of a major customer
relationship), as if all such events occurred on the first day of the Period,
and (ii) to adjust for any other extraordinary, unusual or non-recurring gains
or losses.
"CONVERTING INTEREST" shall mean the percentage amount equal to (i)
the Converting Shares DIVIDED BY (ii) the number of outstanding Common Shares
which are owned by any Person other than the AMC IPO Company or any of its
direct or indirect subsidiaries as of the Determination Date.
"DISCOUNT FACTOR" shall mean ninety two and one half percent (92.5%);
PROVIDED, that for any Determination Date occurring after completion of the
Company's audited financial statements for fiscal year 1998, if the consolidated
net income of the Company and its Subsidiaries for the Company's fiscal year
1998 as shown thereon ("1998 Net Income") is greater than $3,049,000 but less
than $5,858,000, then the Discount Factor shall be 92.5% PLUS one tenth of one
percent (0.1%) for every increment of $37,453 by which the 1998 Net Income is
greater than $3,049,000; and PROVIDED, FURTHER, that if the 1998 Net Income is
$5,858,000 or greater, then the Discount Factor shall be one hundred percent
(100%).
"NON-AMC INTEREST" shall mean the percentage of the outstanding Common
Shares which is owned by any Person other than the AMC IPO Company or any of its
direct or indirect subsidiaries as of the Determination Date.
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"TOTAL CONVERTED AMC SHARES" shall mean the number of AMC Shares (or
fractions thereof) which would be issuable hereunder to a Good Samaritan
Shareholder in exchange for all Common Shares owned by such Good Samaritan
Shareholder if such Good Samaritan Shareholder owned all Common Shares
outstanding other than the Common Shares owned by the AMC IPO Company or any of
its direct or indirect subsidiaries, as of the Determination Date.
(c) For purposes of the formula set forth in Section 5.2(d), the foregoing
terms shall be represented by the following abbreviations:
AMC Adjusted Net Income - "Q";
AMC Interest - "R";
AMC Share Price - "S";
AMC Shares Outstanding - "T";
Amortization Period - "U";
Book Value - "V";
Company Adjusted Net Income - "W";
Discount Factor - "X";
Non-AMC Interest - "Y"; and
Total Converted AMC Shares - "Z".
(d) The Total Converted AMC Shares shall be determined using the following
formula:
(U * T * Y * W) + (T * Y * V)
Z = -------------------------------------
(U * Q) + (U * R * W) + (T * S * X)
(e) The AMC Shares Issuable for the number of Converting Shares specified
in the Conversion Notice shall be equal to (i) the number of Total Converted AMC
Shares as determined by the formula contained in Section 5.2(d), multiplied by
(ii) the Converting Interest, multiplied by (iii) the Discount Factor.
5.3 PROCEDURE. Within twenty (20) days after the later of the
Determination Date or the date on which any Conversion Notice is deemed given
pursuant to this Agreement, AMC shall cause the regular outside accountants
retained by the AMC IPO Company to deliver to the Foundation and to each Good
Samaritan Shareholder exercising its option pursuant to this Section 5 such
accounting firm's calculation of the number of AMC
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Shares Issuable in exchange for the Converting Shares, including detailed
supporting calculations specifying how all variables contained in Sections 5.2
and 5.3 were computed (including, without limitation, AMC Adjusted Net Income
and Company Adjusted Net Income) (the "AMC Calculation"). Unless the converting
Good Samaritan Shareholder shall have notified the AMC IPO Company in writing of
the converting Good Samaritan Shareholder's objection to the AMC Calculation,
specifying those aspects of the AMC Calculation to which such converting holder
objects (an "Objection Notice"), within ten (10) days after the Foundation's
receipt thereof, the AMC Calculation shall be deemed final and binding upon the
parties. If an Objection Notice is given within such period, then the AMC IPO
Company and the converting Good Samaritan Shareholder(s) shall attempt to
resolve any differences within a period of five (5) days after the giving of
such notice. If they are unable to agree upon the appropriate calculation
within such five (5) day period, then they shall mutually agree upon an
independent outside accounting firm to make such determination (or, if they are
unable to agree, shall select one of the Big-6 accounting firms (other than
AMC's, the AMC IPO Company's, the Foundation's or the Society's firm) by lot)
(the "Independent Accountant"). The parties shall use their reasonable best
efforts to cause the Independent Accountants to deliver to AMC, the AMC IPO
Company, the Foundation and each converting Good Samaritan Shareholder, within
fifteen (15) days after the expiration of the five (5) day period described
above, the Independent Accountant's calculation of the number of AMC Shares
Issuable in exchange for the Converting Shares, including detailed supporting
calculations specifying how all variables contained in Sections 5.2 and 5.3 were
computed (including, without limitation, AMC Adjusted Net Income and Company
Adjusted Net Income) (the "Independent Accountant's Calculation"). The
Independent Accountant's Calculation shall be deemed final and binding upon the
parties. The fees and expenses of AMC's regular outside accountants and any
Independent Accountants in performing the tasks described in this Section 5.3
shall be borne equally by the AMC IPO Company, on the one hand, and all Good
Samaritan Shareholders then electing to exchange Common Shares pursuant to this
Article 5, on the other.
5.4 CLOSING. The Good Samaritan Shareholders and the AMC IPO Company
shall close the exchange contemplated by this Section 5 at the principal office
of the AMC IPO Company within 45 days after the date on which any Conversion
Notice is deemed given pursuant to this Agreement, or, if later, five (5)
business days after the Determination Date, or, if later, within three (3)
business days after the AMC Calculation or Independent Accountant's Calculation
is deemed final pursuant to Section 5.3, in each case unless the parties agree
on a different place or time. At the closing of the exchange contemplated by
this Section 5, (i) each Good Samaritan Shareholder making such exchange shall
deliver to the AMC IPO Company the certificate or certificates representing the
Common Shares then being exchanged by such Good Samaritan Shareholder, properly
endorsed with documentary stamps affixed (the cost of which shall be borne by
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the Good Samaritan Shareholder making such exchange), free and clear of all
security interests, liens and restrictions other than those imposed by this
Agreement, and (ii) the AMC IPO Company shall deliver to each Good Samaritan
Shareholder making such exchange the AMC Shares Issuable in exchange for such
Common Shares then being exchanged by such Good Samaritan Shareholder, except
that AMC shall not be obligated to issue any fractional AMC Share (but rather
shall pay cash in lieu thereof, at the closing price per share of the AMC Shares
on the principle securities exchange or interdealer quotation system on which
the AMC Shares are traded as of the Determination Date).
SECTION 6. "PUT" AND "CALL" RIGHTS
6.1 PUT BY THE GOOD SAMARITAN SHAREHOLDERS. (a) At any time after that
date which is three (3) years after the date of this Agreement, the Foundation
may by written demand require the AMC Shareholders to purchase and the AMC
Shareholders hereby jointly and severally agree to purchase any or all of the
Common Shares owned by the Foundation and/or any Affiliates of the Foundation
(except for such number of Common Shares then held by the Foundation and any
Affiliates of the Foundation as is then equal to ten percent (10%) of the
then-issued and outstanding Common Shares) for the consideration and under the
conditions set forth in Sections 6.3 through 6.6
(b) At any time after that date which is five (5) years after the date of
this Agreement, the Foundation may by written demand require the AMC
Shareholders to purchase and the AMC Shareholders hereby jointly and severally
agree to purchase any or all of the Common Shares owned by the Foundation and/or
any Affiliates of the Foundation for the consideration and under the conditions
set forth in Sections 6.3 through 6.6.
(c) AMC's obligations under this Section 6 shall continue notwithstanding
any sale or other Transfer by AMC of any or all of its Common Shares.
6.2 CALL BY AMC. At any time after that date which is five (5) years
after the date of this Agreement, AMC may by written demand require all
Shareholders (other than AMC and its Affiliates) to sell and all such
Shareholders hereby agree to sell any or all of the Common Shares held by such
Shareholders to AMC or any AMC IPO Company (at the election of AMC) for the
consideration and under the conditions set forth in Sections 6.3 through 6.6;
provided, however, that the Foundation and its Affiliates shall have the right
to retain, collectively, a number of Common Shares equal to ten percent (10%) of
the then outstanding Common Shares of the Company; and provided, further, that
AMC shall have the option to exclude from any such call any or all Common Shares
held by any current or former employee, officer or director of the Company or
any Subsidiary, as specified
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by AMC in its discretion with respect to any or all of the Common Shares then
held by each such Person. Any exercise of such right for less than all Common
Shares owned by all Shareholders (other than the Common Shares which are or may
be excluded from such call pursuant to the provisos to the immediately preceding
sentence of this Section 6.2 ("Excluded Shares")) shall obligate each
Shareholder other than AMC and its Affiliates to sell the same percentage of
such Shareholder's Common Shares (after excluding the Excluded Shares). The
Foundation shall have the right to designate which Common Shares held by it
and/or its Affiliates shall not be subject to such call pursuant to the first
proviso of the first sentence of this Section 6.2.
6.3 LIMITATIONS ON EXERCISE OF PUT AND CALL RIGHTS. The Foundation shall
be entitled to exercise its rights pursuant to Section 6.1 no more than once in
any ninety (90) day period. AMC shall be entitled to exercise its rights
pursuant to Section 6.2 no more than once in any ninety (90) day period.
6.4 ELECTION OF FORM OF CONSIDERATION TO BE RECEIVED FOR COMMON SHARES TO
BE TRANSFERRED. If AMC Shares are publicly traded on the NASDAQ Stock Market,
the American Stock Exchange or the New York Stock Exchange at the time of an
exercise of an option pursuant to Section 6.1 or 6.2 hereof, then (i) upon any
exercise of the option set forth in Section 6.1 by the Foundation, AMC shall be
entitled to elect whether the consideration to be received for the Common Shares
to be sold to the AMC Shareholders shall be cash or AMC Shares, or some
combination thereof, and (ii) upon any exercise of the option set forth in
Section 6.2 by AMC, each selling Shareholder shall be entitled to elect whether
the consideration to be received for the Common Shares to be sold to AMC shall
be cash or AMC Shares, or some combination thereof. Such election shall be made
irrevocably by delivery of written notice to the party exercising such option
within thirty (30) days after delivery of the written demand described in
Sections 6.1 and 6.2, or if any party shall fail to so give such written notice
within such period, such party shall be deemed to have elected that the
consideration for all Common Shares to be purchased shall be cash. In
connection with any such transaction, (x) each party selling or issuing either
Common Shares or AMC Shares shall make customary representations and warranties
regarding such Shareholder's title to the Common Shares or AMC Shares being
transferred, and (y) each party receiving Common Shares or AMC Shares shall make
customary representations and warranties regarding federal and state securities
law compliance.
6.5 DETERMINATION OF AMOUNT OF CONSIDERATION FOR COMMON SHARES. (a) If
the AMC Shares are publicly traded on the NASDAQ Stock Market, the American
Stock Exchange or the New York Stock Exchange at the time of an exercise of an
option pursuant to Section 6.1 or 6.2 hereof, then the consideration for which
AMC and/or any AMC Shareholders shall purchase Common Shares pursuant to such
Sections shall be (i) for such number of Common Shares as are being purchased
for AMC Shares, such number of AMC Shares as
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such Common Shares would be convertible into pursuant to Section 5, and (ii) for
such number of Common Shares as are being purchased for cash, such number of AMC
Shares as such Common Shares would be convertible into pursuant to Section 5
MULTIPLIED BY the AMC Share Price. For purposes of such calculation, the
"Determination Date" shall be the last day of the last completed month prior to
the date on which any election pursuant to Section 6.4 occurs or is deemed to
occur; PROVIDED, HOWEVER, that (x) in the event that the Determination Date
would be a date prior to the 20th Trading Day, then the Determination Date shall
instead be the last day of the month in which the 20th Trading Day falls, and
(y) in the event that AMC exercises its option to purchase "Control Shares"
pursuant to Section 1.8 of the Share Purchase Agreement prior to the applicable
Good Samaritan Shareholder's exercise of its option pursuant to Section 6.1,
then the purchase and sale of such Control Shares shall be deemed to have
occurred on the day before the Determination Date if such purchase and sale
actually occurs, for purposes of all definitions and calculations under Sections
5 and 6. Further, the procedure described in Section 5.3 shall be employed by
and govern the parties' determination of the number of AMC Shares into which
such Common Shares would be convertible pursuant to Section 5, substituting "the
date on which any election pursuant to Section 6.4 occurs or is deemed to occur"
for "the date on which any Conversion Notice is deemed given" for purposes of
this Section 6.
(b) If the AMC Shares are not publicly traded on the NASDAQ Stock Market,
the American Stock Exchange or the New York Stock Exchange at the time of an
exercise of an option pursuant to Section 6.1 or 6.2 hereof, then the
consideration for which AMC and/or any AMC Shareholders shall purchase Common
Shares pursuant to such Sections shall be cash, and the purchase price shall be
the price agreed upon by the parties, or if the parties cannot agree on a price,
the Appraised Value (as hereinafter defined) of the Common Shares to be
purchased, calculated pursuant to subsection 6.5(c), as of the last day of the
last completed month prior to the date on which any election pursuant to Section
6.4 occurs or is deemed to occur.
(c) The "Appraised Value" of the Common Shares to be transferred shall be
determined by the appraisers identified below based on their determinations of
earnings, book value, and other appropriate items, as follows:
(i) AMC, on the one hand, and the selling Shareholders which cannot
agree on a price with AMC, on the other, shall each select an independent
appraiser which is either a big 6 accounting firm (or successor thereto) or an
investment banking firm having operations nationwide which conducts appraisals
of the type described in this Section 6.5, and such two (2) appraisers shall
each individually determine the fair market value of the Common Shares to be
transferred; PROVIDED, that if either party fails to so designate an appraiser
within fifteen (15) days after receipt of the notice referred to in Section 6.4,
the appraiser
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selected by the other party shall determine the fair market value of the Common
Shares to be transferred;
(ii) If the values determined by such two (2) appraisers are the same,
then such value shall be the Appraised Value;
(iii) If the values determined by such two appraisers are different by
an amount not greater than ten percent (10%) of the higher of the two
appraisals, then the Appraised Value shall be the average of such two values;
(iv) If the values determined by such two (2) appraisers are different
by an amount greater than ten percent (10%) of the higher of the two appraisals,
then the first two (2) appraisers shall jointly select an independent third
appraiser (of the same type described in clause (i) above) who shall determine a
value for the Common Shares to be transferred; the Appraised Value shall then be
the average of those two values determined by the three (3) appraisers which are
nearest to one another in total amount.
(d) In the event more than one selling Shareholder cannot agree on a price
with AMC pursuant to this Section 6, the Shareholder selling the most Common
Shares shall be entitled to select the appraiser on behalf of all such
Shareholders which have not agreed on a price per Common Share with AMC. The
cost of such appraisal shall be borne equally by AMC, on the one hand, and the
selling Shareholders which cannot agree on a price with AMC, on the other.
6.6 CLOSING. AMC and the Shareholders agree that they will close the
Transfer of Common Shares contemplated by Sections 6.1 through 6.5 within the
following periods after the date on which a Good Samaritan Shareholder or AMC,
as the case may be, gave the applicable notice under Section 6.1 or 6.2: (i) for
Common Shares being purchased for cash, within 120 days; and (ii) for Common
Shares being purchased for AMC Shares, within 30 days (or, if later, within
three (3) business days after final determination of the number of AMC Shares to
be issued in exchange for those Common Shares then being exchanged pursuant to
Sections 6.5(a) and 5.3). The closing shall take place at the principal office
of the party who gave the applicable notice under Section 6.1 or 6.2, unless the
parties agree on a different place or time. At the closing of the Transfer of
Common Shares contemplated by this Section 6, (i) the selling Shareholder(s)
shall deliver to AMC or the purchasing AMC Shareholders, as applicable, the
certificate or certificates representing the Common Shares purchased thereby,
properly endorsed for Transfer and with documentary stamps affixed (the cost of
which shall be borne by the party giving notice pursuant to Section 6.1 or 6.2),
free and clear of all security interests, liens and restrictions other than
those imposed by this Agreement, and (ii) AMC and/or such purchasing AMC
Shareholders shall deliver to the selling
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Shareholder(s) the consideration for which such Common Shares are being
purchased, in full. Payment of any cash purchase price shall be made by
certified check or wire transfer to such account as is designated in writing by
the selling Shareholders.
6.7 FOUNDATION EXIT OPTION UPON CHANGE IN CONTROL OF AMC SHAREHOLDER. (a)
As used in this Section 6.7, the following terms shall have the following
meanings:
"Change in Control" shall mean any transaction or series of transactions
(including any sale or exchange of stock, any sale or exchange of assets,
and any merger or consolidation) which would result in any AMC Shareholder
being directly or indirectly controlled by a Nursing Home Company (with
"control" meaning the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of the AMC
Shareholder in question, whether through ownership of voting securities, by
contract, or otherwise); PROVIDED, that if such transaction or series of
transactions consists of a purchase or series of purchases of
publicly-traded securities made through the public securities markets and
not pursuant to any agreement or arrangement between the purchaser or any
of the purchaser's Affiliates and AMC or any of AMC's Affiliates, such
purchase or series of purchases shall not be deemed a Change of Control
hereunder;
"Discussions" shall mean discussions with respect to any transaction or
series of transactions which would result in a Change in Control; and
"Nursing Home Company" shall mean any Person which, on a consolidated basis
with its subsidiaries, derives a majority of its revenues from the
ownership and/or management of long-term care facilities (which term
includes, without limitation, skilled and intermediate nursing facilities
and assisted living facilities), and any Affiliate of any such Person.
(b) Notwithstanding anything to the contrary stated in this Section 6.7,
the provisions of Sections 6.7(c) through 6.7(f) shall apply only with respect
to Changes in Control which would occur while both (i) the Foundation and its
Affiliates hold more than ten percent (10%) of the Company's Common Shares and
(ii) AMC and its Affiliates hold more than ten percent (10%) of the Company's
Common Shares.
(c) In the event that AMC or any Affiliate thereof is at any time in
Discussions with any Nursing Home Company, AMC or such Affiliate may deliver
written notice (a "Change in Control Notice") to the Foundation stating that
Discussions are taking place and identifying the Nursing Home Company which
would directly or indirectly own or control an AMC Shareholder in the
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event of the Change of Control contemplated by such Discussions. Such Change in
Control Notice shall specify the type or types of transactions (E.G., merger or
sale of stock) to which such Discussions relate, as well as the entities which
would or may be involved in such transaction(s) (E.G., the parties to be merged
or whose stock would be sold).
(d) (i) For a period of twenty (20) business days after its receipt of a
Change in Control Notice, the Foundation shall have the option of whether or not
to consent to the Change in Control described in such Change in Control Notice
with respect to the Nursing Home Company identified in such Change in Control
Notice. If, within such twenty (20) business day period, the Foundation
delivers written notice to AMC stating that it does not consent to such Change
in Control (a "Disapproval Notice"), the Foundation shall be deemed to have
exercised its "Exit Option" pursuant to this Section 6.7 and the provisions of
6.7(e) shall apply. If the Foundation consents to such Change in Control by
delivery of written notice indicating such consent to AMC, or if, as of the end
of such twenty (20) business day period, the Foundation shall have failed to
deliver a Disapproval Notice to AMC, then the Foundation shall be deemed to have
waived its Exit Option with respect to the Change in Control described in the
Change of Control Notice and AMC and/or the Affiliate thereof delivering such
notice shall be entitled to engage in the Change in Control specified in such
Change in Control Notice with the Nursing Home Company identified therein.
(ii) If any Change in Control shall occur as to which no Change in
Control Notice was ever delivered, then, until the expiration of one hundred
twenty (120) days after written notice of such Change in Control shall have been
given to the Foundation pursuant to this Agreement, the Foundation shall have
the option to either (A) by written demand require the AMC Shareholders to
purchase (and the AMC Shareholders hereby agree to purchase) all of the Common
Shares owned by the Good Samaritan Shareholders, or (B) by written demand
require the AMC Shareholders to sell (and the AMC Shareholders hereby agree to
sell) all of the Common Shares owned by the AMC Shareholders, in each case for
cash. The price per Common Share to be paid for the Good Samaritan
Shareholders' Common Shares upon any exercise of the "put" described in clause
(A) above, and the price per Common Share to be paid for the AMC Shareholders'
Common Shares upon any exercise of the "call" described in clause (B) above,
shall be the Appraised Value of such Common Shares, determined in accordance
with Section 6.5(c) (and, for such purposes, the fifteen (15) day period
described in Section 6.5(c)(i) shall be fifteen (15) days from the date the
Foundation gives notice of its exercise of such put or call pursuant to this
Section 6.7(d)(ii)). The Good Samaritan Shareholders and the AMC Shareholders
shall close any "put" transaction pursuant to clause (A) above within one
hundred twenty (120) days after the Foundation shall have given notice of its
exercise of such put, and shall close any "call" transaction pursuant to clause
(B) above within thirty (30) days after the
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Foundation shall have given notice of its exercise of such call. In connection
with any such transaction, each selling Shareholder shall make customary
representations and warranties regarding its title to the Common Shares being
transferred, and each purchasing Shareholder shall make customary
representations and warranties regarding federal and state securities law
compliance. The closing of any such transaction shall take place at such
location within the United States as may be specified by the party acquiring
Common Shares pursuant thereto. At such closing, the selling Shareholder(s)
shall deliver to the applicable purchaser(s) the certificate or certificates
representing the Common Shares purchased thereby, properly endorsed for Transfer
and with documentary stamps affixed (the cost of which shall be borne by the
Company), free and clear of all security interests, liens and restrictions other
than those imposed by this Agreement, and (ii) the applicable purchaser(s) shall
deliver to the selling Shareholder(s) the applicable purchase price for such
Common Shares, in full. Payment of such purchase price shall be made by
certified check or wire transfer to such account as is designated in writing by
the selling Shareholders.
(e) (i) The Foundation's delivery of any Disapproval Notice and
consequent exercise of its Exit Option shall constitute the Good Samaritan
Shareholders' irrevocable offer ("Sale Offer") to sell all Common Shares then
held by the Good Samaritan Shareholders to AMC or any Affiliate of AMC for cash
in an amount equal to the Appraised Value thereof, determined in accordance with
Section 6.5(c) hereof, PROVIDED that the Change in Control described in the
applicable Change in Control Notice actually occurs.
(ii) For a period of ten (10) business days after its receipt of a
Disapproval Notice, AMC shall have the option to accept the Sale Offer, by
delivery of written notice to such effect to the Foundation; PROVIDED, that any
such acceptance shall be contingent upon the consummation of the transaction
which would result in the applicable Change in Control.
(iii) Unless the Foundation shall have received written notification
from AMC accepting a Sale Offer within the ten (10) business day period
described in subsection (e)(ii) above, AMC shall be deemed to have declined such
Sale Offer. If AMC declines such Sale Offer, either by delivery of written
notice stating that it declines the Sale Offer or by virtue of the expiration of
the ten (10) business day period described in subsection (e)(ii) above, then AMC
shall be deemed to have irrevocably offered ("Purchase Offer") to sell all
Common Shares then held by the AMC Shareholders to the Foundation or any
Affiliate of the Foundation for cash in an amount equal to the Appraised Value
thereof, determined in accordance with Section 6.5(c) hereof, PROVIDED that the
Change in Control described in the applicable Change in Control Notice actually
occurs.
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(iv) For a period of ten (10) business days after the commencement of
any such Purchase Offer, the Foundation shall have the option to accept the
Purchase Offer, by delivery of written notice to such effect to AMC; PROVIDED,
that any such acceptance shall be contingent upon the consummation of the
transaction which would result in the applicable Change in Control.
(v) Unless AMC shall have received written notification accepting a
Purchase Offer from the Foundation within the ten (10) business day period
described in subsection (e)(iv), the Foundation shall be deemed to have declined
such Purchase Offer. In the event that any such Purchase Offer is declined by
the Foundation, then AMC and its Affiliates shall thereafter be entitled to
engage in any transaction described in the Change in Control Notice with the
Nursing Home Company identified therein, without regard to the provisions of
this Section 6.7.
(f) If either AMC or the Foundation accepts a Sale Offer or a Purchase
Offer pursuant to Section 6.7(e), the parties shall proceed promptly and in good
faith to ascertain the Appraised Value of the Common Shares to be purchased and
sold in accordance with the provisions set forth in Section 6.5(c) (and, for
such purposes, the fifteen (15) day period described in Section 6.5(c)(i) shall
be fifteen (15) days from the date of any acceptance of such Sale Offer or
Purchase Offer, as the case may be). The parties shall close the purchase and
sale of Common Shares contemplated by such Sale Offer or Purchase Offer as soon
as practicable following such determination of Appraised Value and at the same
time as the transaction resulting in a Change in Control is consummated;
PROVIDED, HOWEVER, that in the event that the Appraised Value shall not have
been determined as of the date of the consummation of the transaction which
would result in a Change in Control, such Change in Control may occur
nonetheless if and only if all Persons which are party to such transaction
deliver to the Good Samaritan Shareholders their unconditional agreement to
cause the Sale Offer or Purchase Offer transaction to be consummated as soon as
practicable after the Appraised Value is determined in accordance with Section
6.5(c).
(g) The closing of any Sale Offer or Purchase Offer transaction shall take
place at such location within the United States as may be specified by the party
acquiring Common Shares pursuant thereto. At such closing, (i) the selling
Shareholder(s) shall deliver to the applicable purchaser(s) the certificate or
certificates representing the Common Shares purchased thereby, properly endorsed
for Transfer and with documentary stamps affixed (the cost of which shall be
borne by the Company), free and clear of all security interests, liens and
restrictions other than those imposed by this Agreement, and (ii) the applicable
purchaser(s) shall deliver to the selling Shareholder(s) the Appraised Value of
such Common Shares, in full. Payment of such Appraised Value shall be made by
certified check or wire transfer to such accounts as are designated in writing
by the selling Shareholders.
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SECTION 7. REGISTRATION RIGHTS
7.1 THE GOOD SAMARITAN SHAREHOLDERS' RIGHTS UPON CONVERSION. In the event
that any Good Samaritan Shareholder shall at any time receive AMC Shares
pursuant to Section 6, then all such Good Samaritan Shareholders shall
collectively have the rights set forth in this Section 7 with respect to all AMC
Shares received pursuant to Section 6. In the event that any Good Samaritan
Shareholder shall at any time receive AMC Shares pursuant to Section 5, then all
such Good Samaritan Shareholders shall have the rights set forth in this Section
7 (other than the rights set forth in Section 7.2(a) hereof, which shall not
apply in such case) with respect to all AMC Shares received pursuant to Section
5. AMC hereby agrees to cause any AMC IPO Company to comply with the
obligations thereof set forth in this Section 7.
7.2 REGISTRATION RIGHTS (a) Upon the receipt by AMC, at any time after 90
days after the date on which an AMC IPO Company completes an Initial Public
Offering of AMC Shares pursuant to a registration statement filed with the SEC,
of a written request from the Foundation to effect any registration, other than
a registration pursuant to Rule 415 under Regulation C promulgated under the
Securities Act, of all or any portion of the AMC Shares held by the Good
Samaritan Shareholders, the AMC IPO Company shall prepare and file as
expeditiously as possible a registration statement under the Securities Act
covering the AMC Shares subject to such request and shall use its reasonable
best efforts to cause such registration statement (a "Demand Registration") to
become effective within 120 days of the receipt of such request. The Foundation
shall be entitled to require the AMC IPO Company to effect two Demand
Registrations with respect to AMC Shares, pursuant to this subsection 7.2(a).
In the event that the Good Samaritan Shareholders determine for any reason
(other than at the request of the AMC IPO Company) not to proceed with a
registration of AMC Shares at any time before the registration statement has
been declared effective by the SEC, and such registration statement, if
theretofore filed with the SEC, is withdrawn with respect to the AMC Shares
covered thereby, and the Good Samaritan Shareholders agree to reimburse the AMC
IPO Company for the fees, costs and expenses in connection therewith, then the
Foundation shall not be deemed to have exercised its right to require the AMC
IPO Company to register the AMC Shares pursuant to this subsection 7.2(a). If
the Good Samaritan Shareholders determine not to proceed with such a
registration upon the request of the AMC IPO Company or the AMC IPO Company's
exercise of its right pursuant to Section 7.2(d), the Good Samaritan
Shareholders shall not be required to reimburse the AMC IPO Company for its
fees, costs and expenses and shall not be deemed to have exercised a Demand
Registration right to require the AMC IPO Company to register the AMC Shares
pursuant to this subsection 7.2(a).
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(b) Each time the AMC IPO Company shall determine to prepare and file a
registration statement under the Securities Act (other than pursuant to a Demand
Registration) in connection with the proposed offer and sale for cash of any AMC
Shares by the AMC IPO Company or any of its security holders (other than on
Forms S-4 or S-8, or any successor or similar form) and the registration
statement may be used for registration of the AMC Shares held by the Good
Samaritan Shareholders (a "Proposed Registration"), the AMC IPO Company shall
give written notice of its determination to the Good Samaritan Shareholders.
Upon the written request of the Good Samaritan Shareholders given to the AMC IPO
Company within 20 days after the giving of any such notice by the AMC IPO
Company, the AMC IPO Company shall, subject to Section 7.2(c) hereof, cause all
such AMC Shares which such Good Samaritan Shareholders have requested to be
registered to be included in such registration statement (a "PIGGYBACK
REGISTRATION"); provided, however, that the AMC IPO Company shall have the
option at any time to postpone or abandon any Proposed Registration and
Piggyback Registration at any time prior to the closing thereof. Any Good
Samaritan Shareholder shall have the right to withdraw its AMC Shares from a
Piggyback Registration if an underwritten offering of such AMC Shares is priced
below a minimum price specified in such Good Samaritan Shareholder's election.
(c) Notwithstanding Sections 7.2(a) or 7.2(b), if the managing
underwriter or underwriters advise the AMC IPO Company in writing that in its
or their opinion or, in the case of a Piggyback Registration not being
underwritten, the AMC IPO Company shall reasonably determine (and notify the
Good Samaritan Shareholders of such determination), that the number or kind
of securities proposed to be sold pursuant to the registration statement will
adversely affect the success of such offering, the AMC IPO Company shall be
obligated to include in the registration statement only that number of
securities, if any, which, in the opinion of such underwriter or
underwriters, or the AMC IPO Company, as the case may be, can be sold as
follows: (i) first, such AMC Shares as to which registration rights have been
exercised by the Good Samaritan Shareholders under subsection 7.2(a) above or
by any other holder of AMC shares exercising similar demand registration
rights, (ii) second, the AMC Shares which the AMC IPO Company proposes to
sell, and (iii) third, the AMC Shares requested to be included in such
registration by the Good Samaritan Shareholders under subsection 7.2(b) above
or by any other holder of AMC Shares exercising piggyback registration rights
(including, without limitation, management). In the event that one (1) or
more Good Samaritan Shareholders and one (1) or more other holders of AMC
Shares shall have exercised demand registration rights, then the priority
amongst holders exercising such demand registration rights pursuant to clause
(i) above shall be allocated pro rata amongst such holders in proportion to
the number of AMC Shares held by the Good Samaritan Shareholders versus the
number of AMC Shares held by such other exercising holders. In the event
that one (1) or more Good Samaritan Shareholders and one (1) or more other
holders of AMC Shares shall
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have exercised piggyback registration rights (including, without limitation,
management), then the priority amongst holders exercising such piggyback
registration rights pursuant to clause (iii) above shall be allocated pro rata
amongst such holders in proportion to the number of AMC Shares held by the Good
Samaritan Shareholders versus the number of AMC Shares held by such other
exercising holders of AMC Shares.
(d) Notwithstanding the provisions of subsections 7.2(a) and (b) hereof,
(i) the AMC IPO Company shall have the right to delay or suspend the preparation
and filing of a registration statement for up to 120 days if in the reasonable
judgment of a majority of the Directors on the Board of Directors of the AMC IPO
Company such preparation or filing would harm or hinder in any material fashion
the ability of the AMC IPO Company to conduct its affairs or would have a
material adverse effect on the business, properties or financial condition of
the AMC IPO Company; PROVIDED that the AMC IPO Company shall use its reasonable
best efforts to cause any such registration statement to become effective within
180 days of receipt of the request therefor and shall only be entitled to
utilize this clause (i) once in any 12 month period, (ii) if, prior to receiving
a request for a Demand Registration, the AMC IPO Company has given notice under
subsection 7.2(b) hereof that it intends to prepare and file a registration
statement (the "AMC Registration Statement"), then the AMC IPO Company shall
have the right to delay or suspend the filing of the registration statement
requested pursuant to subsection 7.2(a); PROVIDED that the AMC IPO Company shall
use its reasonable best efforts to cause any such registration statement
requested by the Good Samaritan Shareholders to become effective within 180 days
after the effective date of the AMC Registration Statement.
(e) The Good Samaritan Shareholders in an underwritten offering
contemplated by subsection 7.2(b) shall be a party to the underwriting agreement
between the AMC IPO Company and such underwriters and shall complete and execute
all questionaires, powers of attorney, indemnities and other documents required
under the terms of such underwriting arrangements.
7.3 STANDSTILL. The Good Samaritan Shareholders agree in connection with
any underwritten public offering of AMC Shares by the AMC IPO Company that, upon
the request of the managing underwriters (or, if not an underwritten offering,
upon the request of the AMC IPO Company), they shall commit themselves in
writing not to sell or offer to sell any AMC Shares other than such AMC Shares
included in the registration statement, during the 7 days prior to, and for a
period not to exceed 180 days from, the date of the final prospectus used in
such offering; PROVIDED, HOWEVER, that (i) nothing in such agreement shall
prevent any Good Samaritan Shareholder that is a partnership from making a
distribution to the partners of such Good Samaritan Shareholder of AMC Shares
that is otherwise in compliance with applicable securities law, if the
Transferees of the AMC Shares shall agree
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to be bound by the applicable provisions of such agreement, and (ii) the Good
Samaritan Shareholders shall have no obligation to enter into the agreement
described in this Section 7.3 unless the AMC IPO Company and all holders of AMC
Shares and all officers and directors of the AMC IPO Company holding AMC Shares
enter into similar agreements for the same duration.
7.4 REGISTRATION PROCEDURES. With respect to any Demand Registration or
Piggyback Registration the AMC IPO Company will:
(a) use its reasonable best efforts to prepare and file with the SEC,
as expeditiously as practicable, a registration statement which includes
the AMC Shares requested to be sold by the Good Samaritan Shareholders, as
the same may be reduced by the operation of Section 7.2(c) hereof (the
"Registrable Securities"), and to cause such registration statement to
become effective and remain effective for such period as may be reasonably
necessary to effect the sale of such Registrable Securities, not to exceed
one hundred eighty (180) days;
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein
as may be necessary to keep such registration statement effective until the
earlier of (i) the date on which all securities covered by such
registration statement have been sold and (ii) 180 days after the effective
date of such registration statement;
(c) use its reasonable best efforts to register or qualify the
Registrable Securities for sale under such other securities or blue sky
laws of such jurisdictions as the Good Samaritan Shareholders may
reasonably request and do any and all other acts and things which may be
reasonably necessary or desirable to enable the Good Samaritan Shareholders
to consummate the disposition of the Registrable Shares in such
jurisdictions; PROVIDED, HOWEVER, that the AMC IPO Company shall not be
required to qualify to do business, to file a general consent to service of
process or to subject itself to taxation in any such jurisdictions;
(d) furnish to the Good Samaritan Shareholders and to the
underwriters of the securities being registered a reasonable number of
copies of the registration statement, preliminary prospectus, final
prospectus, and such other documents as the Good Samaritan Shareholders or
underwriters may reasonably request in order to facilitate the public
offering of such securities;
(e) notify the Good Samaritan Shareholders, promptly after it shall
receive notice thereof, of the time when such registration statement has
become effective or a supplement
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to any prospectus forming a part of such registration statement has
been filed;
(f) notify the Good Samaritan Shareholders promptly of any request by
the SEC for the amending or supplementing of such registration statement or
prospectus or for additional information;
(g) prepare and file with the SEC, promptly upon the request of the
Good Samaritan Shareholders, any amendments or supplements to such
registration statement or prospectus which, in the opinion of counsel for
the Good Samaritan Shareholders (and concurred in by counsel for the AMC
IPO Company), is required under the Securities Act in connection with the
distribution of the Registrable Shares by the Good Samaritan Shareholders;
(h) prepare and promptly file with the SEC, and promptly notify the
Good Samaritan Shareholders of the filing of, any amendment or supplement
to such registration statement or prospectus as may be necessary to correct
any statements or omissions if, at the time when a prospectus relating to
such securities is required to be delivered under the Securities Act, any
event shall have occurred as the result of which any such prospectus or any
other prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statement therein, in the light of the circumstances in which they were
made, not misleading;
(i) advise the Good Samaritan Shareholders, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop
order by the SEC suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding for that
purpose and promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order
should be issued;
(j) at the request of the Good Samaritan Shareholders, use its
reasonable best efforts to cause to be furnished on the date or dates
provided for in the underwriting agreement: (i) an opinion of counsel
addressed to the Good Samaritan Shareholders and the underwriters, if any,
opining as to such matters as are customarily covered in counsel's opinions
to underwriters; and (ii) a letter or letters from the independent
certified public accountants of the AMC IPO Company, addressed to the
underwriters, if any, and to the Good Samaritan Shareholders, covering such
matters as such underwriters and the Good Samaritan Shareholders reasonably
request, in which letters such accountants shall state (without limiting
the generality of the foregoing) that they are independent certified public
accountants within the meaning of the Securities Act and that in the
opinion of such
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accountants the financial statements and other financial data of the AMC
IPO Company included in the registration statement or any amendment or
supplement thereto comply in all material respects with the applicable
accounting requirements of the Securities Act.
(k) if necessary to permit any Good Samaritan Shareholder to be able
to avail itself of any defense to a cause of action which would not
otherwise be available to the Good Samaritan Shareholders, and provided
that the Good Samaritan Shareholders first enter into a confidentiality
agreement reasonably acceptable to the AMC IPO Company, give such Good
Samaritan Shareholder, its underwriters, if any, and its respective counsel
and accountants the reasonable opportunity to participate in the
preparation of the registration statement, each prospectus included therein
or filed with the SEC, and each amendment thereof or supplement thereto,
and shall give each of them such reasonable access to its books and records
and such reasonable opportunities to discuss the business of the AMC IPO
Company with its officers and the independent public accountants who have
certified its financial statements as shall be necessary, in the reasonable
opinion of any such Good Samaritan Shareholder's and such underwriter's
respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
7.5 EXPENSES. With respect to each Demand Registration, Piggyback
Registration or proposed Piggyback Registration, the AMC IPO Company shall bear
the fees, costs and expenses of such registrations, including but not limited to
the following fees, costs and expenses: all registration, filing, and stock
exchange fees, printing expenses, fees and disbursements of counsel and
accountants for the AMC IPO Company, fees and disbursements of other Persons
retained by the AMC IPO Company, all legal fees and disbursements and other
expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered or
qualified, and the reasonable fees and disbursements of one counsel for the Good
Samaritan Shareholders and all other AMC IPO Company shareholders participating
in such registration; provided, that the Good Samaritan Shareholders
participating in such registration shall be responsible for, and shall pay,
their PRO RATA share of underwriting discounts and commissions, and shall be
solely responsible for all transfer taxes, fees of accountants and other
professional advisors retained by the Good Samaritan Shareholders, and all fees
and disbursements of attorneys retained by the Good Samaritan Shareholders in
excess of the reasonable fees and disbursements of the one counsel to be paid by
the AMC IPO Company.
7.6 INDEMNIFICATION.
(a) BY THE AMC IPO COMPANY. The AMC IPO Company shall indemnify and hold
harmless the Good Samaritan Shareholders and
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any underwriter (as defined in the Securities Act) for the Good Samaritan
Shareholders and their respective officers, directors, members, employees and
agents and each other Person, if any, who controls the Good Samaritan
Shareholders or such underwriter within the meaning of the Securities Act, from
and against any and all loss, damage, liability or claims, to which the Good
Samaritan Shareholders or any such underwriter becomes subject under the
Securities Act or otherwise, and subject to the provisions of Section 7.6(c)
hereof to reimburse them, from time to time upon request, for any legal or other
costs or expenses reasonably incurred by them in connection with investigating
any claims or defending any action (as provided in Section 7.6(c) hereof),
insofar as such losses, damages, liabilities, claims, costs or expenses are
caused by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however, that
the AMC IPO Company will not be liable in any such case to the extent that any
such loss, damage, liability, claim, cost or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission (other than a statement or omission about the AMC IPO Company) made in
conformity with information furnished by the Good Samaritan Shareholders in
writing specifically for use in the preparation of a registration statement.
(b) BY THE GOOD SAMARITAN SHAREHOLDERS. The Good Samaritan Shareholders
holding AMC Shares that are included in a registration pursuant to this
Agreement will indemnify and hold harmless the AMC IPO Company, any underwriter
and their respective officers, directors, members, shareholders, employees and
agents and each other Person, if any, who controls the AMC IPO Company, such
other holder or such underwriter, from and against any and all loss, damage,
liability or claim, to which the AMC IPO Company or such other holder or any
controlling Person and/or any underwriter becomes subject under the Securities
Act or otherwise and to reimburse them, from time to time upon request, for any
legal or other costs or expense reasonably incurred by them in connection with
investigating any claims or defending any actions, insofar as such losses,
damages, liabilities, costs, or expenses are caused by any untrue or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein, or any amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was so
made in reliance upon and in conformity
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with written information furnished by the Good Samaritan Shareholders
specifically for use in the preparation of such registration statement;
provided, however, that in any such case, the Good Samaritan Shareholders shall
not be required to provide indemnification pursuant to this subsection in an
amount exceeding the amount of net proceeds received by the Good Samaritan
Shareholders pursuant to such registration statement.
(c) NOTICE. Promptly after receipt by an indemnified party pursuant to
the provisions of paragraph (a) or (b) of this Section 7.6 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provision, such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party in writing of the
commencement thereof; but the omission to so notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than hereunder. In case such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall have the right to participate in, and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party; PROVIDED, HOWEVER, if the defendants in any action
include both the indemnified party and the indemnifying party and there is a
conflict of interest which would prevent counsel for the indemnifying party from
also representing the indemnified party, the indemnified party or parties shall
have the right to select separate counsel to participate in the defense of such
action on behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party pursuant to the provisions of said paragraph (a) or (b) for any legal or
other expense subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation, unless (i) the
indemnified party shall have employed counsel in accordance with the proviso of
the preceding sentence, (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after the notice of the commencement of the action, or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.
(d) CONTRIBUTION. If for any reason the indemnification provided for in
paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to
hold it harmless as contemplated by such paragraphs, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnified party and the
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indemnifying party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations;
PROVIDED, HOWEVER, that, in any such case, (i) the Good Samaritan Shareholders
will not be required to contribute any amount in excess of the net proceeds
received by the Good Samaritan Shareholders for all such AMC Shares sold by the
Good Samaritan Shareholders pursuant to such registration statement, and (ii) no
Good Samaritan Shareholder guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any holder of AMC Shares who was not guilty of such fraudulent
misrepresentation.
Promptly after receipt of notice of the commencement of any action, suit or
proceeding in connection with a public offering of the AMC Shares, the
indemnified party will, if a claim for contribution in respect thereof is able
to be made against another party, notify the contributing party of the
commencement thereof. The omission so to notify the contributing party will not
relieve it from any liability which it may have to any other party other than
for contribution under the Securities Act. In case any such action, suit or
proceeding is brought against any party, and such party notifies a contributing
party of the commencement thereof, the contributing party will be entitled to
participate therein with the notifying party and any other contributing party
similarly notified.
7.7 GOOD SAMARITAN SHAREHOLDERS TO PROVIDE INFORMATION. In the event the
Good Samaritan Shareholders request a registration of AMC Shares, the Good
Samaritan Shareholders shall provide all such information and materials and
shall take all such actions as may be reasonably requested by the AMC IPO
Company in connection therewith, including all actions and information required
in order to permit the AMC IPO Company to comply with all applicable
requirements of the SEC and to obtain any desired acceleration of the effective
date of such registration statement. Specifically, the AMC IPO Company may
require the Good Samaritan Shareholders to furnish the AMC IPO Company with such
information and affidavits regarding the Good Samaritan Shareholders and the
distribution of their securities as the AMC IPO Company may from time to time
reasonably request in writing.
7.8 RULE 144 REPORTING. The AMC IPO Company agrees that at all times
after it has filed a registration statement pursuant to the requirements of the
Securities Act relating to any class of equity securities of the AMC IPO
Company, it will use its best efforts to file in a timely manner all reports
required to be filed by it pursuant to the Securities Exchange Act of 1934, as
amended (the "Securities Act of 1934"), and the rules and regulations
promulgated thereunder. At any time and upon request of the Good Samaritan
Shareholders, the AMC IPO Company will furnish the Good Samaritan Shareholders
and others with such information as may be necessary to enable the Good
Samaritan
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Shareholders to effect sales of AMC Shares pursuant to Rule 144 under the
Securities Act of 1934.
SECTION 8. BOARD APPROVAL REQUIREMENTS FOR CERTAIN ACTIONS;
CERTAIN COVENANTS OF THE COMPANY
8.1 BOARD APPROVAL REQUIREMENTS FOR CERTAIN ACTIONS. Notwithstanding any
provision in the articles of incorporation or bylaws of the Company to the
contrary, (i) during any period that AMC and the Foundation each have the right,
pursuant to Section 2, to designate exactly two (2) members of the Board of
Directors of the Company, the Company shall not take any of the actions
specified in subsections 8.1(a) through 8.1(t) unless at least one (1) Director
designated by AMC and one (1) Director designated by the Foundation shall have
voted in favor thereof at a regular or special meeting of the Board of Directors
or pursuant to a unanimous written consent of Directors, and (ii) during any
period that, pursuant to Section 2, AMC has the right to designate three (3) or
more members of the Board of Directors of the Company and the Foundation has the
right to designate at least one (1) member of the Board of Directors of the
Company, the Company shall not take any of the actions specified in subsections
8.1(a), (b), (d), (e) (provided, that for such purposes "50%" shall be
substituted for "15%" in subsection 8.1(e)), (f), (j), (r) or (u), in each case
unless at least one (1) Director designated by AMC and one (1) Director
designated by the Foundation shall have voted in favor thereof at a regular or
special meeting of the Board of Directors or pursuant to a unanimous written
consent of Directors:
(a) directly or indirectly redeem, purchase or otherwise acquire, or
permit any Subsidiary to redeem, purchase or otherwise acquire, any of the
Company's or any Subsidiary's capital stock or other equity securities
(including, without limitation, warrants, options and other rights to
acquire such capital stock or other equity securities) or directly or
indirectly redeem, purchase or make any payments with respect to any stock
appreciation rights, phantom stock plans or similar rights or plans (other
than as required pursuant to the terms thereof);
(b) except pursuant to Sections 1.1, 1.7 or 1.8 of the Share Purchase
Agreement, authorize, issue or enter into any agreement providing for the
issuance (contingent or otherwise) of (i) any notes or debt securities
containing equity features (including, without limitation, any notes or
debt securities convertible into or exchangeable for capital stock or other
equity securities, issued in connection with the issuance of capital stock
or other equity securities or containing profit participating features), or
(ii) any capital stock or other equity securities (or any securities
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convertible into or exchangeable for any capital stock or other equity
securities);
(c) make, or permit any Subsidiary to make, any loans or advances to,
guarantees for the benefit of, or Investments in, any Person, except for
(i) reasonable advances to employees in the ordinary course of business,
(ii) acquisitions permitted pursuant to subsection (g) below and (iii)
Investments having a stated maturity no greater than one year from the date
the Company makes such Investment in (A) obligations of the United States
government or any agency thereof of obligations guaranteed by the United
States government or (B) commercial paper with a rating of a least
"Prime-1" by Xxxxx'x Investors Service, Inc.;
(d) merge or consolidate with any Person or, except as permitted by
subsection (g) below, permit any Subsidiary to merge or consolidate with
any Person;
(e) sell, lease or otherwise dispose of, or permit any Subsidiary to
sell, lease or otherwise dispose of, more than 15% of the consolidated
assets of the Company and its Subsidiaries (computed on the basis of book
value, determined in accordance with GAAP) in any transaction or series of
related transactions (other than sales of inventory in the ordinary course
of business);
(f) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction (including, without limitation,
any reorganization into a limited liability company, a partnership or any
other non-corporate entity which is treated as a partnership for federal
income tax purposes);
(g) acquire, or permit any Subsidiary to acquire, any interest in any
company or business (whether by a purchase of assets, purchase of stock,
merger or otherwise), or enter into any joint venture, involving an
aggregate consideration (including, without limitation, the assumption of
liabilities whether direct or indirect) exceeding $250,000 in any one
transaction or series of related transactions or exceeding $500,000 in any
twelve-month period;
(h) enter into, or permit any Subsidiary to enter into, the
ownership, active management or operation of any lines of business other
than the lines of business engaged in by the Company as of the date hereof;
(i) become subject to, or permit any of its Subsidiaries to become
subject to (including, without limitation, by way of amendment to or
modification of) any agreement or instrument which by its terms would
(under any circumstances) restrict (i) the right of any Subsidiary to make
loans or advances or pay dividends to, transfer property
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to, or repay any Indebtedness owed to, the Company or another Subsidiary or
(ii) the Company's right to perform the provisions of this Agreement, the
Share Purchase Agreement, the Non-Competition Agreement, the Company's
articles of incorporation or the Company's bylaws;
(j) except as expressly contemplated by this Agreement, make any
amendment to the Company's articles of incorporation or the Company's
bylaws, or file any resolution of the Board of Directors with the South
Dakota Secretary of State;
(k) enter into, amend, modify or supplement, or permit any Subsidiary
to enter into, amend, modify or supplement, any agreement, transaction,
commitment or arrangement with any of its or any Subsidiary's officers,
directors, employees, stockholders or Affiliates or with any individual
related by blood, marriage or adoption to any such individual or with any
entity in which any such Person or individual owns a beneficial interest,
other than (i) agreements with the Society or any Affiliate of the Society
(including, without limitation, Society long-term care facilities)
providing for the provision of goods or services by the Company on terms
which are not commercially unreasonable to the Company, (ii) customary
employment arrangements and benefit programs on reasonable terms and
changes thereto approved by the compensation committee of the Board of
Directors of the Company in accordance with the bylaws of the Company and
(iii) as otherwise expressly contemplated by this Agreement or in any other
agreement disclosed to AMC and entered into concurrently herewith;
(l) except in connection with any acquisition permitted by subsection
(g) above, establish or acquire any Subsidiaries;
(m) create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, Indebtedness
exceeding an aggregate principal amount of $250,000 outstanding at any time
on a consolidated basis;
(n) create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any Liens other
than (i) Permitted Liens and (ii) Liens on assets acquired as permitted by
subsection (g) above securing Indebtedness permitted by subsection (m)
above;
(o) make any capital expenditures (including, without limitation,
payments with respect to capitalized leases, in excess of amounts therefor
approved in the annual budget of the Company;
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(p) enter into any leases or other rental agreements (excluding
capitalized leases, as determined in accordance with GAAP) under which the
amount of the aggregated lease payments for all such agreements exceeds
$250,000 on a consolidated basis for any twelve-month period;
(q) change its fiscal year;
(r) issue or sell any shares of the capital stock, or rights to
acquire shares of the capital stock, of any Subsidiary to any Person other
than the Company;
(s) enter into any material transaction outside of the ordinary
course of the Company's business which is not approved in the annual budget
of the Company (other than any transaction of a type described in any of
the foregoing subsections 8.1(a) through (r) which the Company is permitted
to enter into pursuant to the terms of such subsection);
(t) adopt the budget of the Company and its Subsidiaries for the next
fiscal year, or adopt any revisions thereto after the same has been
adopted; or
(u) except pursuant to Sections 1.1, 1.7 or 1.8 of the Share Purchase
Agreement, authorize, issue or enter into any agreement providing for the
issuance (contingent or otherwise) of (i) any notes or debt securities
containing equity features (including, without limitation, any notes or
debt securities convertible into or exchangeable for capital stock or other
equity securities, issued in connection with the issuance of capital stock
or other equity securities or containing profit participating features)
which, combined with Common Shares issued or issuable pursuant to clause
(ii) of this subsection 8.1(u), could result in the issuance of more than
three hundred (300) Common Shares, or (ii) any capital stock or other
equity securities (or any securities convertible into or exchangeable for
any capital stock or other equity securities) which, combined with Common
Shares issued or issuable pursuant to clause (i) of this subsection 8.1(u),
could result in the issuance of more than three hundred (300) Common
Shares; PROVIDED, that each such three hundred (300) Common Share
limitation number shall be adjusted as necessary to account for any stock
split, stock dividend, merger, consolidation, recapitalization or similar
event affecting the number of Common Shares outstanding.
Notwithstanding the foregoing, this Section 8.1 shall be of no force or effect
during any period that either the AMC Shareholders or the Good Samaritan
Shareholders hold ten percent (10%) or less of the then-outstanding Common
Shares.
8.2 AFFIRMATIVE COVENANTS OF THE COMPANY. Unless both AMC and the
Foundation shall have otherwise consented in writing, the Company shall, and
shall cause each Subsidiary to:
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(a) at all times cause to be done all things necessary to maintain,
preserve and renew its corporate existence and all material licenses,
authorizations and permits necessary to the conduct of its businesses;
(b) maintain and keep its material properties in good repair, working
order and condition, and from time to time make all necessary or desirable
repairs, renewals and replacements, so that its businesses may be properly
and advantageously conducted in all material respects at all times;
(c) pay and discharge when payable all taxes, assessments and
governmental charges imposed upon its properties or upon the income or
profits therefrom (in each case before the same becomes delinquent and
before penalties accrue thereon) and all material claims for labor,
materials or supplies which if unpaid would by law become a Lien upon any
of its property, unless and to the extent that the same are being contested
in good faith and by appropriate proceedings and adequate reserves (as
determined in accordance with GAAP) have been established on its books with
respect thereto;
(d) comply in all material respects with all other material
obligations which it incurs pursuant to any contract or agreement, whether
oral or written, express or implied, as such obligations become due, unless
and to the extent that the same are being contested in good faith and by
appropriate proceedings and adequate reserves (as determined in accordance
with GAAP) have been established on its books with respect thereto;
(e) comply with all applicable laws, rules and regulations of all
governmental authorities, the violation of which could reasonably be
expected to have a material adverse effect on the business, assets,
liabilities, results of operations, financial condition or prospects of the
Company and its Subsidiaries, taken as a whole (a "Material Adverse
Effect");
(f) apply for and continue in force with good and responsible
insurance companies adequate insurance covering risks of such types and in
such amounts as are customary for corporations of similar size engaged in
similar lines of business; and
(g) maintain proper books of record and account which present fairly
in all material respects its financial condition and results of operations
and make provisions on its financial statements for all such proper
reserves as in each case are required in accordance with GAAP.
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8.3 FINANCIAL STATEMENTS AND OTHER INFORMATION. Unless both AMC and the
Foundation shall have otherwise consented in writing, the Company shall deliver
to each of AMC and the Foundation (in each case so long as it or any of its
Affiliates hold any Common Shares):
(a) as soon as available but in any event within 30 days after the
end of each monthly accounting period in each fiscal year, unaudited
consolidating and consolidated statements of income and cash flows of the
Company and its Subsidiaries for each monthly period and for the period
from the beginning of the fiscal year to the end of such month, and
unaudited consolidating and consolidated balance sheets of the Company and
its Subsidiaries as of the end of such monthly period, setting forth in
each case comparisons to the Company's annual budget and to the
corresponding period in the preceding fiscal year, and all such statements
shall be prepared in accordance with GAAP, subject to the absence of
footnote disclosures and to normal year-end audit adjustments, and shall be
certified by the Company's chief financial officer;
(b) accompanying the financial statements referred to in subsection
(a), a certificate of the Company executed by the chief executive officer
or chief financial officer of the Company (an "Officer's Certificate")
stating that the Company is not in default of any of its obligations
hereunder or under the Share Purchase Agreement (an "Event of
Noncompliance") and that neither the Company nor any of its Subsidiaries is
in default under any of its other material agreements or, if any Event of
Noncompliance or any such default exists, specifying the nature and period
of existence thereof and what actions the Company and its Subsidiaries have
taken and propose to take with respect thereto;
(c) within 90 days after the end of each fiscal year, consolidating
and consolidated statements of income and cash flows of the Company and its
Subsidiaries for such fiscal year, and consolidating and consolidated
balance sheets of the Company and its Subsidiaries as of the end of such
fiscal year, setting forth in each case comparisons to the Company's annual
budget and to the preceding fiscal year, all prepared in accordance with
GAAP, and accompanied by (i) with respect to the consolidated portions of
such statements, an opinion containing no exceptions or qualifications
(except for qualifications regarding specified contingent liabilities) of
an independent accounting firm of recognized national standing, (ii) a
certificate from such accounting firm, addressed to the Company's Board of
Directors, stating that in the course of its examination nothing came to
its attention that caused it to believe that there was an Event of
Noncompliance in existence or that there was any other default by the
Company or any Subsidiary in the fulfillment of or compliance with any of
the terms,
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covenants, provisions or conditions of any other material agreement to
which the Company or any Subsidiary is a party or, if such accountants have
reason to believe any Event of Noncompliance or other default by the
Company or any Subsidiary exists, a certificate specifying the nature and
period of existence thereof, and (iii) a copy of such firm's annual
management letter to the board of directors;
(d) promptly upon receipt thereof, any additional reports, management
letters or other detailed information concerning significant aspects of the
Company's operations or financial affairs given to the Company by its
independent accountants (and not otherwise contained in other materials
provided hereunder);
(e) at least 30 days but not more than 90 days prior to the beginning
of each fiscal year, an annual budget prepared on a monthly basis for the
Company and its Subsidiaries for such fiscal year (displaying anticipated
statements of income and cash flows and balance sheets), and promptly upon
preparation thereof any other significant budgets prepared by the Company
and any revisions of such annual or other budgets;
(f) promptly (but in any event within five business days) after the
discovery or receipt of notice of any Event of Noncompliance, any default
under any material agreement to which it or any of its Subsidiaries is a
party, any condition or event which is reasonably likely to result in a
Material Adverse Effect (including, without limitation, the filing of any
material litigation against the Company or any Subsidiary or the existence
of any dispute with any Person which involves a reasonable likelihood of
such litigation being commenced), an Officer's Certificate specifying the
nature and period of existence thereof and what actions the Company and its
Subsidiaries have taken and propose to take with respect thereto;
(g) within ten days after transmission thereof, copies of all
financial statements, proxy statements, reports and any other general
written communications which the Company sends to its stockholders and
copies of all registration statements and all regular, special or periodic
reports which it files, or (to its knowledge) any of its officers or
directors files with respect to the Company, with the Securities and
Exchange Commission or with any securities exchange on which any of its
securities are then listed, and copies of all press releases and other
statements made available generally by the Company to the public concerning
material developments in the Company's and its Subsidiaries' businesses;
and
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(h) with reasonable promptness, such other information and financial
data concerning the Company and its Subsidiaries as AMC or the Foundation
may reasonably request.
Each of the financial statements referred to in subsections (a) and (c) above
shall be true and correct in all material respects as of the dates and for the
periods stated therein, subject in the case of the unaudited financial
statements to changes resulting from normal year-end audit adjustments.
8.4 INSPECTION OF PROPERTY. The Company shall permit any representatives
designated by AMC or the Foundation (in each case so long as it or any of its
Affiliates hold more than ten percent (10%) of the outstanding Common Shares),
upon reasonable notice and during normal business hours, to (i) visit and
inspect any of the properties of the Company and its Subsidiaries, (ii) examine
the corporate and financial records of the Company and its Subsidiaries and make
copies thereof or extracts therefrom and (iii) discuss the affairs, finances and
accounts of any such corporations with the directors, officers, key employees
and independent accountants of the Company and its Subsidiaries. The
presentation of an executed copy of this Agreement by AMC or the Foundation to
the Company's independent accountants shall constitute the Company's permission
to its independent accountants to participate in discussions with such Persons.
SECTION 9. GENERAL PROVISIONS
9.1 WAIVERS AND AMENDMENTS. This Agreement may be amended or modified in
whole or in part only by a writing which makes reference to this Agreement
executed by all of the parties to this Agreement. The obligations of any party
hereunder may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the party
claimed to have given the waiver; PROVIDED, HOWEVER, that any waiver by any
party of any violation of, breach of, or default under any provision of this
Agreement or any other agreement provided for herein shall not be construed as,
or constitute, a continuing waiver of such provision, or a waiver of any other
violation of, breach of or default under any other provision of this Agreement
or any other agreement provided for herein.
9.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the Company, its successors and permitted assigns,
and shall be binding upon and inure to the benefit of the other parties hereto
and their respective heirs, successors and permitted assigns. No party may
assign any or all of his rights or delegate any or all of his duties under this
Agreement without the prior written consent of each of the other parties hereto.
No Person which is not a party hereto shall have any rights pursuant to this
Agreement.
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9.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
9.4 NOTICES. All notices, elections and other communications pursuant to
this Agreement shall be made in writing and be deemed to have been duly given
(i) when delivered, if personally delivered, (ii) one business day after
delivered to (and accepted by) an overnight courier service, if sent by
overnight courier service addressed to the applicable address set forth below,
(iii) one business day after sent by facsimile transmission, if sent to the
applicable facsimile number set forth below, and (iv) five days after being sent
by registered or certified mail, return receipt requested, postage prepaid, to
the applicable address set forth below:
IF TO THE COMPANY:
Xx. Xxxxxxx X. Xxxxxxx
President/Chief Executive Officer
Good Samaritan Supply Services, Inc.
0000 Xxxxxxxx Xxx.
Xx. Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (612) 696-
with a copy to:
Xxxxxx X. Xxx, Esq.
Xxxx Xxxxx Xxxx & XxXxxx
0000 X Xxxxxx, X.X.
Xxxxx 0000 -- Xxxx Xxxxx
Xxxxxxxxxx, X.X. 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO AMC OR THE AMC IPO COMPANY:
American Medserve Corporation, Inc.
Park Lake Center
000 Xxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx and
Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
Xxxx X. Xxxxxxxxx, Esq.
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO THE FOUNDATION:
The Evangelical Lutheran Good Samaritan Foundation
0000 Xxxx 00xx Xxxxxx
Xxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx, Chief Executive Officer
with a copy to:
Xxxx Xxxxx, Esq.
Xxxxxxx, Street & Deinard
Suite 2300
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
9.5 ENTIRE AGREEMENT. This Agreement, together with the Share Purchase
Agreement and the Non-Competition and Marketing Assistance Agreement, embodies
the entire agreement among the Company, AMC and the Foundation in relation to
its subject matter, and, except as provided herein or therein, no
representations, warranties, covenants, understandings or agreements or
otherwise, in relation thereto, exist between any of the parties.
9.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the substantive law of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the laws of any
jurisdiction other than the State of Delaware to be applied.
9.7 SEVERABILITY. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant and/or
provision hereof. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed severed
from this Agreement, but every other provision of this Agreement
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shall remain in full force and effect, and in substitution for any such
provision held unlawful, there shall be deemed substituted a provision of
similar import reflecting the original intent of the parties hereto to the
extent permissible under law.
9.8 SPECIFIC PERFORMANCE. The parties hereto agree that upon a breach of
any other provisions of this Agreement a remedy at law would not be adequate,
and that the parties hereto are entitled to injunctive relief and specific
performance, and any other legal or equitable remedies, as remedies for the
enforcement of this Agreement.
9.9 TIME OF THE ESSENCE. Time is of the essence in the parties'
performance of each and every provision of this Agreement.
IN WITNESS WHEREOF, the Company and the Shareholders have executed this
Shareholders Agreement as of the day and year first above written.
AMERICAN MEDSERVE CORPORATION, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Its: President/Chief Executive Officer
-----------------------------------
THE EVANGELICAL LUTHERAN GOOD SAMARITAN FOUNDATION
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Its: President/Chief Executive Officer
-----------------------------------
GOOD SAMARITAN SUPPLY SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Its: President/Chief Executive Officer
-----------------------------------
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