1
EXHIBIT 99.3
PARENT VOTING AGREEMENT
VOTING AGREEMENT dated as of April 13, 1998 (this "Agreement") by and
among Mariner Health Group, Inc., a Delaware corporation (the "Company"), and
Apollo Management, L.P., Apollo Investment Fund III, L.P., Apollo UK Partners,
III, L.P. and Apollo Overseas Partners III, L.P. (collectively, "Apollo")
WHEREAS, Apollo is the beneficial owner of shares of common stock, par
value $.01 per share (the "Parent Common Stock"), of Paragon Health Network,
Inc., a Delaware corporation ("Parent"), and through a Proxy and Voting
Agreement dated as of November 4, 1997 (the "Proxy and Voting Agreement"),
Apollo has the right to vote additional shares of Parent Common Stock;
WHEREAS, Paragon Acquisition Sub, Inc., a Delaware corporation and
wholly owned subsidiary of the Parent (the "Subsidiary"), Mariner Health Group,
Inc. and Parent have entered into an Agreement and Plan of Merger, dated as of
the date hereof (as the same may be amended or supplemented, the "Merger
Agreement"), with respect to the merger of Subsidiary with and into the Company
(the "Merger") with the Company surviving the Merger; and
WHEREAS, as an inducement to the Company to enter into, execute and
deliver the Merger Agreement, the Company requested that Apollo execute this
Agreement pursuant to which Apollo will agree to vote the shares of Parent
Common Stock which Apollo beneficially owns or has the right to vote as provided
herein.
NOW, THEREFORE, in consideration of the execution and delivery by the
Company of the Merger Agreement and the mutual covenants, conditions and
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. VOTING AGREEMENTS. Subject to the provisions of Section 6 hereof, in
connection with the efforts of the Parent to cause the Merger Agreement and the
Merger to receive the required approval of the stockholders of Parent and to be
consummated, Apollo agrees with, and covenants to, the Company as follows:
(a) At any meeting of stockholders of Parent called to vote
upon the Merger and the Merger Agreement or at any adjournment thereof
or in any other circumstance upon which a vote, consent or other
approval of stockholders of Parent is sought with respect to the
issuance of shares of Parent Common Stock in connection with the Merger
and pursuant to the Merger Agreement (the "Issuance"), Apollo shall (i)
appear or otherwise take appropriate action to ensure that the Apollo
Shares (as defined below) are present at such meeting for the purpose
of obtaining a quorum and (ii) vote (or cause to be voted) or execute a
written consent with respect to the Apollo Shares in favor of the
Issuance and each of the other transactions contemplated by or in any
way related to the Merger Agreement.
2
(b) At any meeting of stockholders of Parent or at any
adjournment thereof or in any other circumstance upon which the vote,
consent or other approval of stockholders of Parent is sought, Apollo
shall vote (or cause to be voted) or execute a written consent in
connection with the Apollo Shares against (i) any merger agreement or
merger (other than the Merger Agreement and the Merger), consolidation,
combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by
Parent or (ii) any action or agreement, including any proposed
amendment of Parent's Certificate of Incorporation or By-laws or other
proposal or transaction involving Parent or any of its subsidiaries
which action, agreement, amendment or other proposal or transaction is
intended, or could reasonably be expected to impede, interfere with,
delay, or attempt to frustrate, prevent or nullify the Merger, the
Merger Agreement or any of the other transactions contemplated thereby
(each of the foregoing in clauses (i) or (ii) above, a "Competing
Transaction").
2. REPRESENTATIONS AND WARRANTIES. Apollo represents and warrants to
the Company as follows:
(a) Through its beneficial ownership and pursuant to the Proxy
and Voting Agreement, Apollo has the right to vote 17,777,778 shares of
Parent Common Stock (the "Apollo Shares"). Except for the Apollo
Shares, Apollo is not the record or beneficial owner of any shares of
Parent Common Stock.
(b) This Agreement has been duly executed and delivered by
Apollo and Apollo intends for this to be a valid and binding agreement
and will not take any action to contest the valid and binding nature of
this Agreement. Apollo is a limited partnership duly formed, validly
existing and in good standing under the laws of the state of its
formation with full partnership power and authority necessary to enter
into this Agreement and to perform its obligations hereunder.
(c) Except as described on Schedule 2(c) hereof, neither the
execution and delivery of this Agreement nor the consummation by Apollo
of the transactions contemplated hereby will result in a violation of,
or a default under, or conflict with, any contract, trust, commitment,
agreement, understanding, arrangement or restriction of any kind to
which Apollo is a party or bound or to which the Apollo Shares are
subject. Neither the execution and delivery of this Agreement nor the
consummation by Apollo of the transactions contemplated hereby will
violate, or require any consent, approval or notice under any provision
of any judgment, order or decree applicable to Apollo or the Apollo
Shares, except for any necessary consent, approval or notice under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, or
Section 13 of the Securities Exchange Act of 1934, as amended, and (ii)
required by local, state and federal regulatory agencies, commissions,
boards or public authorities with jurisdiction over health care
facilities and providers.
(d) Except as described on Schedule 2(d) hereof, none of which
as of the date hereof impede the ability of Apollo to fulfill its
obligations under this Agreement, the
2
3
Apollo Shares owned by affiliates of Apollo (the "Affiliate Shares")
and the certificates representing such Shares are now and at all times
during the term hereof will be held by such affiliates, or by a nominee
or custodian for the benefit of such affiliate, free and clear of all
liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising
hereunder.
(e) Apollo understands and acknowledges that the Company is
entering into the Merger Agreement in reliance upon Apollo's execution
and delivery of this Agreement.
3. COVENANTS. Apollo agrees with, and covenants to, the Company as
follows:
(a) Apollo shall not (i) transfer (which terms shall include,
without limitation, for the purposes of this Agreement, any sale, gift,
pledge, alienation, assignment or other disposition, directly or
indirectly, by operation of law, in connection with any merger or
otherwise (collectively, a "Transfer")), or consent to any Transfer of,
any or all of the Affiliate Shares or any interest therein, except
pursuant to the Merger or as set forth on Schedule 3(a) hereof, (ii)
enter into any contract, option or other agreement or understanding
with respect to any Transfer of any or all of the Affiliate Shares or
any interest therein, (iii) grant any proxy, power of attorney or other
authorization in or with respect to the Affiliate Shares, except for
this Agreement and any proxy granted in connection with any meeting of
stockholders of Parent called to vote upon the Issuance or at any
adjournment thereof which contains voting instructions consistent with
Apollo's obligations under this Agreement, or (iv) deposit the
Affiliate Shares into a voting trust or enter into a voting agreement
or any other arrangement with respect to such Shares; provided, that
Apollo may, subject to the provisions of Section 4 hereof, transfer any
Affiliate Shares to another affiliate of Apollo or other party to the
Proxy and Voting Agreement so long as Apollo continues to be able to
vote such Shares in accordance with the terms of this Agreement.
(b) Subject to the provisions of Section 6 hereof, Apollo
shall not, in its capacity as a stockholder of Parent, and shall
instruct any investment banker, attorney or other adviser or
representative of Apollo not to, directly or indirectly, (i) solicit,
initiate, facilitate, or encourage any Competing Transactions or (ii)
participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, a Competing
Transaction. Apollo shall immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing. Without
limiting the foregoing, it is understood that solely for purposes of
enabling the Company to avail itself of the remedies available pursuant
to Section 9(h) hereof, any violation of the restrictions set forth in
the preceding sentence by an investment banker, attorney or other
adviser or representative of Apollo, whether or not such person is
3
4
purporting to act on behalf of Apollo or otherwise, shall be deemed to
be a violation of this Section 3(b) by Apollo.
4. CERTAIN EVENTS. Apollo agrees that this Agreement and the
obligations hereunder shall attach to the Apollo Shares and shall be binding
upon any person or entity to which legal or beneficial ownership of the Apollo
Shares shall pass, whether by operation of law or otherwise. In the event of any
stock split, stock dividend, merger, reorganization, recapitalization or other
change in the capital structure of Parent affecting Parent Common Stock, or the
acquisition of additional shares of Parent Common Stock or other voting
securities of Parent by Apollo, the obligations hereunder shall attach to any
additional shares of Parent Common Stock or other voting securities of Parent
issued to or acquired by Apollo.
5. VOIDABILITY. If prior to the execution hereof, the Board of
Directors of Parent shall not have duly and validly authorized and approved by
all necessary corporate action the Merger Agreement and the transactions
contemplated thereby, so that by the execution and delivery hereof the Company
would become, or could reasonably be expected to become, an "interested
stockholder" with whom Parent would be prevented for any period pursuant to
Section 203 of the DGCL from engaging in any "business combination" (as such
terms are defined in Section 203 of the DGCL), then this Agreement shall be void
and unenforceable until such time as such authorization and approval shall have
been duly and validly obtained.
6. STOCKHOLDER CAPACITY. Certain persons affiliated with Apollo are
directors of Parent and Apollo does not make any agreement or understanding
herein with respect to such individuals in their capacity as directors and the
provisions of this Agreement shall not restrict or limit the discharge of their
fiduciary duties as directors of Parent. Apollo signs solely in its capacity as
the beneficial owner or holder of a proxy with respect to the Apollo Shares.
7. REGULATORY APPROVAL. Each of the provisions of this Agreement is
subject to compliance with applicable regulatory conditions.
8. FURTHER ASSURANCES. Apollo shall, upon request of the Company,
execute and deliver any additional documents and take such further actions as
may reasonably be deemed by the Company to be necessary or desirable to carry
out the provisions hereof.
9. TERMINATION. It is a condition precedent to the effectiveness of
this Agreement that the Merger Agreement shall have been executed and delivered
and be in full force and effect. This Agreement shall automatically terminate
and be of no further force and effect upon the first to occur of (i) the
Effective Time of the Merger or (ii) the date upon which the Merger Agreement is
terminated in accordance with its terms. Upon such termination, except for any
rights any party may have in respect of any breach by any other party of its or
his obligations hereunder, none of the parties hereto shall have any further
obligation or liability hereunder
10. MISCELLANEOUS.
4
5
(a) Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to them in the
Merger Agreement.
(b) All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be
deemed given upon the same terms as set forth in Section 8.05 of the
Merger Agreement, except that notices to Apollo shall be sent to:
Apollo Advisors, L.P.
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
With a copy to:
Xxxxxx X. Xxxxxx
Sidley & Austin
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the Company and Apollo and delivered to Company,
Subsidiary, Parent and Apollo.
(e) This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement, and supersedes
all prior agreements and undertakings, both written and oral, among the
parties with respect to the subject matter hereof.
(f) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the
laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in
part, through any merger, by operation of law or otherwise, by any of
the parties without the prior written consent of the other parties,
except by laws of descent or as expressly contemplated by Section 3(a)
hereof. Any assignment in violation of the foregoing shall be void.
(h) Apollo agrees that irreparable damage would occur and that
the Company would not have any adequate remedy at law in the event that
any of the provisions of this
5
6
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the Company
shall be entitled to an injunction or injunctions to prevent breaches
or threatened breaches by Apollo of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of
the United States located in the State of Delaware or in Delaware state
court, this being in addition to any other remedy to which the Company
may be entitled at law or in equity. In addition, each of the parties
hereto irrevocably and unconditionally (i) consents to be subject to
the personal jurisdiction of any Federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby,
(ii) agrees that such party will not attempt to deny or defeat the
personal jurisdiction of such courts by motion or other request for
leave from any such court, (iii) agrees that such party will not bring
any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court sitting in
the State of Delaware or a Delaware state court and (iv) that service
of process may also be made on such party by prepaid certified mail
with a proof of mailing receipt validated by the United States Postal
Service constituting evidence of, valid service, and that service made
pursuant to this clause (iv) shall have the same legal force and effect
as if served upon such party personally within the State of Delaware.
(i) If any term, provision, covenant or restriction herein, or
the application thereof to any circumstance, shall, to any extent, be
held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions herein and the application thereof to any other
circumstances, shall remain in full force and effect, shall not in any
way be affected, impaired, or invalidated, and shall be enforced to the
fullest extent permitted by law and the provision found to be invalid,
void or unenforceable shall be immediately revised by the parties
hereto so as to be valid, binding and enforceable to the greatest
extent then permitted by applicable law.
(j) No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be in
writing and signed by such party.
(k) A facsimile of this Agreement containing signatures of all
of the parties hereto shall constitute an original document for all
purposes.
[BALANCE OF PAGE INTENTIONALLY OMITTED]
6
7
IN WITNESS WHEREOF, the Company and Apollo have caused this Parent
Voting Agreement to be duly executed and delivered on day and year first above
written.
MARINER HEALTH GROUP, INC.
By:
-----------------------------
Name:
Title:
APOLLO MANAGEMENT, L.P.
By: AIF III Management, Inc.,
Its General Partner
By:
-----------------------------
Name:
Title:
APOLLO INVESTMENT FUND III, L.P.
By: Apollo Advisors II, L.P.,
Its General Partner
By: Apollo Capital Management II, Inc.,
Its General Partner
By:
-----------------------------
Name:
Title:
7
8
APOLLO UK PARTNERS III, L.P.
By: Apollo Advisors II, L.P.,
Its General Partner
By: Apollo Capital Management II, Inc.,
Its General Partner
By:
-----------------------------
Name:
Title:
APOLLO OVERSEAS PARTNERS, III, L.P.
By: Apollo Advisors II, L.P.,
Its General Partner
By: Apollo Capital Management II, Inc.,
Its General Partner
By:
-----------------------------
Name:
Title:
8
