EXHIBIT 10.1
SHAREHOLDER AGREEMENT
This SHAREHOLDER AGREEMENT (this "Agreement"), dated as of
October 18, 2001 is made and entered into among x-XxxXxxx.xxx, a Nevada
corporation ("Parent"), TLC Acquisition Corporation, a Delaware corporation and
wholly owned subsidiary of Parent ("Merger Sub"), and each party listed under
the heading "SHAREHOLDER" on the signature page hereof (each a "Shareholder" and
collectively, the "Shareholders");
WITNESSETH:
WHEREAS, as of the date hereof, each Shareholder owns
beneficially and of record the number of shares of common stock, par value $0.01
per share ("Company Common Stock"), of Tender Loving Care Health Care Services,
Inc., a Delaware corporation (the "Company"), set forth opposite the
Shareholder's name on Exhibit A hereto (the total number of shares of Company
Common Stock owned by the Shareholder, and any other Company Common Stock that
the Shareholder acquires, whether by means of purchase, dividend, distribution,
exercise of any stock options or otherwise, prior to the termination of this
Agreement, being collectively referred to as the "Shares");
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company, Parent, and Merger Sub are entering into an Agreement
and Plan of Merger of even date herewith (the "Merger Agreement"), which, upon
the terms and subject to the conditions set forth therein) provides for, among
other things, a tender offer (the "Offer") by Merger Sub for the Company Common
Stock and the subsequent merger of Merger Sub with and into the Company (the
"Merger"); and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Parent and Merger Sub have requested each Shareholder to
agree, and in order to induce Parent and Merger Sub to enter into the Merger
Agreement each Shareholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants, and agreements hereinafter set forth,
the parties hereto hereby agree as follows:
ARTICLE 1
SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES
Each Shareholder, severally (and not jointly), hereby represents and
warrants to Parent and Merger Sub with respect to itself and the Shares its
holds (as set forth on Exhibit A hereto) as follows:
SECTION 1.1 Due Organization and Authorization. Shareholder, if it is a
corporation or trust, is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is formed. Shareholder possesses
the requisite power and authority to execute, deliver, and perform this
Agreement, to appoint Merger Sub and Parent (or any nominee thereof) as its
Proxy (as defined below), and to consummate the transactions contemplated
hereby. This Agreement has been duly authorized and validly executed and
delivered by or on behalf of Shareholder and, assuming that it has been duly
authorized and validly executed and delivered by Parent and Merger Sub,
constitutes a legal, valid, and binding obligation of Shareholder, enforceable
against Shareholder in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law). There is no beneficial owner of any of the Shares set forth opposite
Shareholder's name on Exhibit A hereto or other beneficiary or holder of any
other interest therein whose consent is required for the execution and delivery
of this Agreement or for the consummation by Shareholder of the transactions
contemplated hereby.
SECTION 1.2 No Conflicts; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Shareholder do not, and the
performance of this Agreement by Shareholder will not, (i) conflict with or
violate the charter documents or trust instruments of Shareholder, if
applicable, (ii) conflict with or violate any law applicable to Shareholder or
by which Shareholder or any of Shareholder's assets is bound or affected, or
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, acceleration, or cancellation of, or result in the
creation of a lien or encumbrance on any assets of Shareholder (including,
without limitation, the Shares) pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise, or other instrument or
obligation to which Shareholder is a party or by which Shareholder or any of its
assets are bound or affected. (b) The execution and delivery of this Agreement
by Shareholder does not, and the performance of this Agreement by Shareholder
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic or
foreign, other than necessary filings under the Securities Exchange Act of 1934,
as amended.
SECTION 1.3 Title to Shares. Shareholder is the sole record and
beneficial owner of the Shares set forth opposite Shareholder's name on Exhibit
A hereto, free and clear of any pledge, lien, security interest, mortgage,
claim, proxy, voting restriction or other voting trust, agreement,
understanding, or arrangement of any kind, right of first refusal or other
limitation on disposition, adverse claim of ownership, or other encumbrance of
any kind, other than
restrictions imposed by securities laws or pursuant to this Agreement or the
Merger Agreement. As of the date hereof, Shareholder does not own beneficially
or of record any other Shares.
SECTION 1.4 Information for Offer Documents and Proxy Statement. None
of the information relating to Shareholder and its affiliates provided by or on
behalf of Shareholder or its affiliates specifically for inclusion in the
various documents to be filed with the Securities and Exchange Commission
("SEC") in connection with the transactions contemplated by the Merger Agreement
(including, without limitation, the Schedule TO, Schedule 14D-9 and other
documents filed with the SEC and delivered to Shareholders of the Company in
connection with the Offer (the "Offer Documents"), and, if applicable, the proxy
statement) will, at the respective times such documents are filed with the SEC
or are first published, sent or given to Shareholders of the Company, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE 2
SHAREHOLDERS' COVENANTS
Each Shareholder hereby severally (and not jointly) covenants to Parent
and Merger Sub with respect to itself and the Shares its holds (as set forth on
Exhibit A hereto) as follows:
SECTION 2.1 Voting of Shares. Shareholder hereby agrees that from the
date hereof until the termination of the Agreement pursuant to Section 4.2
hereof (the "Term"), at any meeting of the Shareholders of the Company however
called and in any action by written consent of the Shareholders of the Company,
Shareholder shall vote its Shares (i) in favor of the Merger and the Merger
Agreement, (ii) against any Acquisition Proposal (as defined in the Merger
Agreement) and against any proposal for action or agreement that would result in
a breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which is reasonably
likely to result in any of the Company's obligations under the Merger Agreement
not being fulfilled, any change in the directors of the Company (except as
contemplated by the Merger Agreement), any change in the present capitalization
of the Company or any amendment to the Company's corporate structure or
business, or any other action which could reasonably be expected to impede,
interfere with, delay, postpone or materially adversely affect the transactions
contemplated by this Agreement or the Merger Agreement or the likelihood of such
transactions being consummated and (iii) in favor of any other matter necessary
for consummation of the transactions contemplated by the Merger Agreement which
is considered at any such meeting of Shareholders or in such consent, and in
connection therewith to execute any documents which are necessary or appropriate
in order to effectuate the foregoing, including the ability for Merger Sub or
its nominee(s) to vote such Shareholder's Shares directly.
SECTION 2.2 Proxy. Shareholder hereby revokes all prior proxies or
powers of attorney with respect to any of its Shares. During the Term,
Shareholder hereby constitutes and appoints
Parent and Merger Sub, or any nominee designated by Parent and Merger Sub, with
full power of substitution and resubstitution at any time during the Term, as
its true and lawful attorney and proxy ("Proxy"), for and in its name, place,
and stead, to demand that the Secretary of the Company call a special meeting of
the Shareholders of the Company for the purpose of considering any matter
referred to in Section 2.1 and to vote each Share held by Shareholder as its
Proxy in respect of any such matter, at every annual, special, adjourned, or
postponed meeting of the Shareholders of the Company, including the right to
sign its name (as Shareholder) to any consent, certificate, or other document
relating to the Company that the law of the State of Delaware might permit or
require. THE FOREGOING PROXY AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED
WITH AN INTEREST THROUGHOUT THE TERM. Shareholder will take such further action
and execute such other documents as may be necessary to effectuate the intent of
this Section 2.2.
SECTION 2.3 Tender. Shareholder hereby agrees to tender in the Offer,
prior to the expiration date thereof (the "Expiration Date"), all Shares of
Company Common Stock owned beneficially and of record by it. Shareholder hereby
acknowledges and agrees that Parent's and Merger Sub's obligation to accept for
payment and pay for such Shares in the Offer is subject to the terms and
conditions set forth in Annex B to the Merger Agreement.
SECTION 2.4 Restrictions on Transfer, Proxies and Non-Interference.
Shareholder hereby agrees, while this Agreement is in effect, and except for
tendering the Shares in the Offer and as otherwise contemplated hereby, not to
(i) sell, transfer, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect to
the sale, transfer, pledge, encumbrance, assignment or other disposition of, any
of the Shares, (ii) grant any proxies, deposit any Shares into a voting trust or
enter into a voting agreement with respect to any Shares, or (iii) take any
action that would make any representation or warranty of Shareholder contained
herein untrue or incorrect in any material respect or have the effect of
preventing or disabling Shareholder from performing Shareholder's obligations
under this Agreement.
SECTION 2.5 Disclosure. Shareholder hereby authorizes Parent and Merger
Sub to publish and disclose in the Offer Documents and, if approval of the
Company's Shareholders is required under applicable law, the Company's proxy
statement (including all documents and schedules filed with the SEC), its
identity, its ownership securities of the Company, and the nature of its
commitments, arrangements, and understandings under this Agreement.
SECTION 2.6 No Solicitation. Shareholder covenants and agrees that,
during the Term, it shall not, directly or indirectly, solicit, initiate,
knowingly encourage, or knowingly take any other action designed to facilitate
any inquiries or the making of any proposal from any person (other than from
Parent or Merger Sub) relating to (i) any acquisition of any Shares or (ii) any
transaction that constitutes an Acquisition Proposal. Shareholder further
covenants and agrees that, during the Term, it shall not and shall not permit
its agents and other representatives to, participate in any discussions or
negotiations (except with Parent or Merger Sub) regarding, or furnish to any
person (other than Parent or Merger Sub) any information with respect to, or
otherwise cooperate in any way with, or assist or participate in or knowingly
facilitate or encourage, any effort or attempt by any person (other than Parent
and Merger Sub) to make, any
transaction (i) relating to any acquisition of any Shares, or (ii) that may
constitute an Acquisition Proposal. Shareholder immediately shall cease and
cause to be terminated all existing discussions or negotiations of Shareholder
and its agents or other representatives with any person (other than Parent and
Merger Sub) with respect to any of the foregoing. Shareholder shall notify
Parent and Merger Sub promptly of any such proposal or offer, or any inquiry or
contact with any person with respect thereto, of which it becomes aware and
shall, in any such notice to Parent and Merger Sub, indicate in reasonable
detail the identity of the person making such proposal, offer, inquiry, or
contact and the material terms and conditions of such proposal, offer, inquiry,
or contact. Notwithstanding any provision of this Section to the contrary and
without limiting the generality of Section 2.7, Shareholder may, and if any
agent or representative of Shareholder is a member of the Board of Directors of
the Company, such member of the Board of Directors of the Company may, in his or
her capacity as such director, take such actions, if any, as are permitted in
such capacity by Section 5.3 of the Merger Agreement.
SECTION 2.7 Shareholder Capacity. No person executing this Agreement
who is or becomes during the term hereof a director or officer of the Company
makes any agreement or understanding herein in his or her capacity as such
director or officer. Each Shareholder signs solely in its capacity as the record
holder and beneficial owner of such Shareholder's Shares and nothing herein
shall limit or affect any actions taken by any Shareholder in such Shareholder's
capacity as an officer or director of the Company. This Section 2.7 shall
survive termination of this Agreement.
ARTICLE 3
COMPANY SECURITIES OPTION
SECTION 3.1 Grant of Option. In order to induce Parent and Merger Sub
to enter into the Merger Agreement, each Shareholder hereby grants to Parent and
Merger Sub an irrevocable option (the "Company Securities Option") to purchase
the Shareholder's Shares at a cash price per Share equal to the Per Share Amount
as defined in the Merger Agreement and used in this Agreement with the same
meaning) (the "Per Share Amount") equal to $1.00 in cash or any higher price
paid or to be paid by Parent or Merger Sub pursuant to the Offer or the Merger
or prior to the termination of this Agreement pursuant to Section 4.2 below, but
excluding any price paid to any Shareholder who exercises dissenters' rights in
connection with the Merger. The Company Securities Option shall be exercisable
pursuant to the terms of Section 3.2 below.
SECTION 3.2 Exercise of Company Securities Option. The Company
Securities Option (i) shall become exercisable, in whole but not in part, for
all Shares subject thereto (less any such Shares which Merger Sub has accepted
for payment or paid for in the Offer) immediately after the expiration of the
Offer (or, if for any reasons later, immediately after the expiration of the
period, including any extensions thereof, during which shares of Company Common
Stock tendered pursuant to the Offer may by the terms of the Offer be accepted
or rejected) or, if later, the date on which there shall not be in effect any
preliminary or final injunction or other order issued by any court or
governmental, administrative, or regulatory agency or authority
prohibiting the exercise of the Company Securities Option pursuant to this
Agreement, if, but only if, Merger Sub has accepted for payment all shares of
Company Common Stock tendered and not withdrawn in the Offer, and (ii) shall
remain exercisable for a period of sixty (60) days after the first such date on
which the Company Securities Option becomes exercisable pursuant to clause (i)
of this sentence. If the Company Securities Option does not become exercisable
under this Section 3.2 due to (a) the termination or withdrawal of the Offer
prior to the Expiration Date (or the later date specified in the second
parenthetical of this Section 3.2), or (b) the failure of Merger Sub to accept
for payment all shares of Company Common Stock tendered and not withdrawn in the
Offer, it shall be deemed to have expired. In the event that Parent or Merger
Sub wishes to exercise the Company Securities Option, Parent or Merger Sub,
prior to the expiration thereof, shall send a written notice to Shareholder
identifying the place for the closing of such purchase at least two (2) business
days prior to such closing.
ARTICLE 4
MISCELLANEOUS
SECTION 4.1 Definitions. Terms used but not otherwise defined in this
Agreement, have the meanings assigned to such terms in the Merger Agreement.
SECTION 4.2 Termination. This Agreement shall terminate and be of no
further force and effect (i) by the written mutual consent of the parties
hereto, or (ii) automatically and without any required action of the parties
hereto upon the earlier to occur of (A) the Effective Time, (B) the closing of
the exercise of the Company Securities Option or the expiration of the Company
Securities Option, (C) the termination of the Merger Agreement in accordance
with its terms, or (D) the acceptance for payment of all of the Shares pursuant
to the Offer, whichever occurs earlier. The termination of this Agreement shall
not relieve any party hereto from any liability for any breach of this Agreement
prior to termination.
SECTION 4.3 Notices. All notices and other communications to any party
hereunder shall be in writing (including facsimile transmission) and shall be
given to Parent, Merger Sub and Company as specified in Section 9.1 of the
Merger Agreement. If notice is to be made to a Shareholder, such notice must be
sent to his or her address as set forth on Exhibit A hereto.
SECTION 4.4 Severability. In the event that any provision in this
Agreement is held invalid, illegal, or unenforceable in a jurisdiction, such
provision shall be modified or deleted as to the jurisdiction involved but only
to the minimum extent necessary to render the same valid, legal, and
enforceable. The validity, legality, and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby nor shall
the validity, legality, or enforceability of such provision be affected thereby
in any other jurisdiction.
SECTION 4.5 Entire Agreement. This Agreement and the Merger Agreement,
as it may be amended from time to time, constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties, or any
of them, with respect thereto.
SECTION 4.6 Assignment. No party may assign or delegate this Agreement
or any right, interest, or obligation hereunder; provided, that, Parent or
Merger Sub, in its sole discretion, may assign or delegate its rights and
obligations hereunder to any direct or indirect wholly-owned subsidiary of
Parent.
SECTION 4.7 No Third-Party Beneficiaries. This Agreement shall be
binding upon, inure solely to the benefit of, and be enforceable by only the
parties hereto, their respective successors, and permitted assigns, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
person, other than the parties hereto, their respective successors, and
permitted assigns, any rights, remedies, obligations, or liabilities of any
nature whatsoever.
SECTION 4.8 Waiver of Appraisal Rights. Shareholder hereby waives any
rights of appraisal or rights to dissent from the Merger.
SECTION 4.9 Further Assurance. Each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
SECTION 4.10 Certain Events. Shareholder agrees that this Agreement and
the obligations hereunder shall attach to Shareholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise. Notwithstanding any
transfer of Shares, the transferor shall remain liable for the performance of
all obligations under this Agreement.
SECTION 4.11 No Waiver. The failure of any party hereto to exercise any
right, power, or remedy provided under this Agreement or otherwise available at
law or in equity, the failure of any party hereto to insist upon compliance by
any other party hereto with its obligations hereunder, or the existence of any
custom or practice of the parties at variance with the terms hereof shall not
constitute a waiver by such party of its right to exercise any such or other
right, power, or remedy or to demand such compliance.
SECTION 4.12 Specific Performance. The parties hereto acknowledge that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
otherwise breached. Accordingly, the parties agree that an aggrieved party shall
be entitled to injunctive relief to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court having
jurisdiction, this being in addition to any other right or remedy to which such
party may be entitled under this Agreement, at law, or in equity.
SECTION 4.13 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without effect
to provisions thereof relating to conflicts of law.
SECTION 4.14 Headings. The descriptive headings in this Agreement were
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 4.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 4.16 Shares Not Held Of Record. Every provision of this
Agreement which requires a Shareholder to take action with respect to such
Shareholder's Shares shall be interpreted to include a requirement that such
Shareholder cause such action to be taken by the owner of record of any Shares
beneficially owned by such Shareholder that such Shareholder does not hold of
record.
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IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be executed in a manner sufficient to bind them as of the date
first written above.
X-XXXXXXX.XXX.
By: /s/ Xxxxx Xxxxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxxxx
Title: President and Co-Chief Executive Officer
TLC ACQUISITION CORPORATION.
By: /s/ Xxxxx Xxxxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxxxx
Title: President
SHAREHOLDER
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
SHAREHOLDER
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
SHAREHOLDER
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
SHAREHOLDER
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
SHAREHOLDER
By: /s/ Xxxxxxx X. Xxxxxxxxx, Ph.D.
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Name: Xxxxxxx X. Xxxxxxxxx, Ph.D.
SHAREHOLDER
By: /s/ Xxxxxxxx Xxxxxxx, Ph.D.
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Name: Xxxxxxxx Xxxxxxx, Ph.D.
SHAREHOLDER
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
SHAREHOLDER
By: /s/ Xxxxx X. Silver
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Name: Xxxxx X. Silver, Esq.
