CONFORMED COPY
SUPPORT AGREEMENT dated as of April 19, 1998,
among KAPSON SENIOR QUARTERS CORP., a Delaware
corporation ("Parent"), KA ACQUISITION CORP., a
Delaware corporation ("Sub"), Vencor, Inc., a Delaware
corporation ("Vencor), and Vencor Assisted Living
Holdings, Inc., a Delaware corporation ("VALH") (each
of Vencor and VALH, a "Stockholder" and, collectively,
the "Stockholders").
WHEREAS, Parent, Sub and Atria Communities, Inc., a Delaware
corporation (the "Company"), propose to enter into an Agreement and Plan of
Merger dated as of the date hereof (as the same may be amended or
supplemented, the "Merger Agreement"; capitalized terms used but not
defined herein shall have the meanings set forth in the Merger Agreement)
providing for the merger of Sub with and into the Company;
WHEREAS, pursuant to the Merger Agreement, the outstanding
capital stock of Sub will be converted into 11,111,111 shares of Common
Stock of the Surviving Corporation and the Stockholders will retain
1,234,568 shares of Common Stock of the Surviving Corporation;
WHEREAS, each Stockholder owns the number of shares of Common
Stock set forth opposite its name on Schedule A hereto (such shares of
Common Stock, together with any other shares of capital stock of the
Company acquired by such Stockholder after the date hereof and during the
term of this Agreement, being collectively referred to herein as the
"Subject Shares" of such Stockholder); and
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, Parent and Sub have requested that each Stockholder enter
into this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Representations and Warranties of Each Stockholder.
Each Stockholder hereby represents and warrants to Parent and Sub as of the
date hereof as follows:
(a) Authority; Execution and Delivery; Enforceability. The
Stockholder has all requisite corporate power and authority to execute this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery by the Stockholder of this Agreement and
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the
Stockholder. The Stockholder has duly executed and delivered this
Agreement, and this Agreement constitutes the legal, valid and binding
obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws
affecting creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether considered in a proceeding in equity or at law). The execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the
provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or acceleration
of any obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of the
Stockholder or any of its subsidiaries under, (i) the Certificate of
Incorporation or By-laws of the Stockholder or the comparable charter or
organizational documents of any of its subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, conces sion, franchise or license applicable
to the Stockholder or any of its subsidiaries or their respective
properties or assets or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Stockholder
or any of its subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Liens that individually or in the
aggregate would not (x) have a Material Adverse Effect on the Stockholder,
(y) impair the ability of the Stockholder to perform their respective
obligations under this Agreement or (z) prevent the consummation of any of
the Transactions. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to the Stockholder or any of its subsidiaries
in connection with the execution and delivery of this Agreement by the
Stockholder or the consummation by the Stockholder of transactions
contemplated hereby, except for the filing with the SEC of such reports
under Section 13(d) and 16(a) of the Exchange Act as may be required in
connection with the Agreement and the transactions contemplated hereby.
(b) The Subject Shares. The Stockholder is the record and/or
beneficial owner of, and has good and valid title to, the Subject Shares,
free and clear of any Liens. The Stockholder does not own, of record or
beneficially, any shares of capital stock of Company other than the Subject
Shares. The Stockholder has the sole right to vote the Subject Shares, and
none of the Subject Shares is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of the
Subject Shares, except as contemplated by this Agreement.
SECTION 2. Representations and Warranties of Parent and Sub.
Parent and Sub hereby represent and warrant to each Stockholder as follows:
Parent and Sub have all requisite corporate power and authority to enter
into this Agreement and to consummate the Transactions. The execution and
delivery of this Agreement and the consummation of the Transactions have
been duly authorized by all necessary corporate action on the part of
Parent and Sub. This Agreement has been duly executed and delivered by
Parent and Sub and constitutes a valid and binding obligation of such
party, enforceable against such party in accordance with its terms (subject
to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights
generally from time to time in effect and to general principles of equity,
including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether considered in a
proceeding in equity or at law). The execution and delivery of the
Operative Agreements do not, and the consummation of the Transactions and
compliance with the provisions of the Operative Agreements will not,
conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancelation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of
the properties or assets of Parent or Sub under, (i) the certificate of
incorporation or by-laws (or other comparable
organizational documents) of Parent or Sub, (ii) any loan or credit agree
ment, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent
or Sub or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or Sub, other than, in the case of clauses
(ii) and (iii), any such conflicts, violations, defaults, rights, losses or
Liens that individually or in the aggregate would not (x) have a Material
Adverse Effect on Parent, (y) impair the ability of Parent and Sub to
perform their respective obligations under this Agreement or (z) prevent
the consummation of any of the Transactions. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Parent or Sub in
connection with the execution and delivery of this Agreement or the
consummation by Parent or Sub, as the case may be, of any of the
Transactions, except for (i) the filing with the SEC of the Proxy Materials
and such reports under Sections 13 and 16(a) of the Exchange Act as may be
required in connection with the Operative Agreement and the Transactions,
(ii) the filing of the Certificate of Merger with the Delaware Secretary of
State and appropriate documents with the relevant authorities of other
states in which the Company is qualified to do business, (iii) such filings
as may be required in connection with the taxes described in Section 6.10
of the Merger Agreement and (iv) such other consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required
under the "takeover" or "blue sky" laws of various states.
SECTION 3. Covenants of Each Stockholder. Subject to Section 5
hereof, each Stockholder covenants and agrees as follows:
(a) The Stockholder hereby permits the Company, Parent and Sub to
publish and disclose in the Proxy Materials (including all documents and
schedules filed with the SEC) its identity and ownership of the Subject
Shares and the nature of its commitments, arrangements and understandings
under this Agreement.
(b) (1) At any meeting of the stockholders of the Company called
to seek the approval of the Merger Agreement and the Merger (the "Company
Stockholder Approval") or in any other circumstances upon which a vote,
consent or other approval with respect to the Merger Agreement, any other
Operative Agreement, the Merger or any other Transaction is sought, the
Stockholder shall vote (or cause to be voted) the Subject Shares in favor
of granting the Company Stockholder Approval.
(2) The Stockholder hereby irrevocably grants to, and appoints,
Parent, Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxx, or any of them, and any
individual designated in writing by any of them, and each of them
individually, as the Stockholder's proxy and attorney-in-fact (with full
power of substitution), for and in the name, place and stead of the
Stockholder, to vote the Subject Shares, or grant a consent or approval in
respect of the Subject Shares in a manner consistent with this Section 3.
The Stockholder understands and acknowledges that Parent is entering into
the Merger Agreement in reliance upon the Stockholder's execution and
delivery of this Agreement. The Stockholder hereby affirms that the
irrevocable proxy set forth in this Section 3(b) is given in connection
with the execution of the Merger Agreement, and that such irrevocable proxy
is given to secure the performance of the duties of the Stockholder under
this Agreement. The Stockholder hereby further affirms that the irrevocable
proxy is coupled with an interest and may under no circumstances be
revoked, except as
provided herein. The Stockholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof.
Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212(e) of the DGCL. The
irrevocable proxy granted hereunder shall automatically terminate upon the
termination of Sections 3(b) and 3(c).
(c) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the Stockholder
shall vote (or cause to be voted) the Subject 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 Company,
(ii) any "takeover proposal" (as defined in the Merger Agreement) and (iii)
any amendment of the certificate of incorporation or by-laws of the Company
or other proposal or transaction involving the Company or any of its
subsidiaries, which amendment or other proposal or transaction would in any
manner impede, frustrate, prevent or nullify any provision of any Operative
Agreement, the Merger or any other Transaction or change in any manner the
voting rights of any class of capital stock of the Company. The Stockholder
shall not commit or agree to take any action inconsistent with the
foregoing.
(d) Other than this Agreement, the Stockholder shall not (i)
sell, transfer, pledge, assign or otherwise dispose of (including by gift)
(collectively, "Transfer"), or enter into any agreement, option or other
arrangement (including any profit sharing arrangement) with respect to the
Transfer of, any Subject Shares to any person other than pursuant to the
Merger or (ii) enter into any voting arrangement, whether by proxy, voting
agreement or otherwise, with respect to any Subject Shares and shall not
commit or agree to take any of the foregoing actions. Notwithstanding the
foregoing, the Stockholder may Transfer the Subject Shares to the Vencor
Operating Company (as defined below) or one of its wholly owned
subsidiaries in connection with the transactions described in the Vencor
Proxy Statement (as defined below); provided, however, that the Vencor
Operating Company (or such subsidiary, if applicable) shall execute and
deliver to Parent a supplement to this Agreement agreeing to be bound by
the terms hereof. "Vencor Operating Company" means the corporation referred
to as the "Operating Company" in the Vencor Proxy Statement. The "Vencor
Proxy Statement" means definitive proxy statement included in the Schedule
14A of Vencor, as amended, filed with the Securities and Exchange
Commission on March 26, 1998.
(e) The Stockholder shall not, nor shall it authorize or permit
any officer, director or employee of, or any investment banker, attorney or
other adviser or representative of, the Stockholder to, (i) directly or
indirectly solicit, initiate or encourage the submission of, any takeover
proposal, (ii) enter into any agreement with respect to any takeover
proposal or (iii) directly or indirectly 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, any takeover proposal. The Stockholder promptly shall advise
Parent orally and in writing of any takeover proposal or inquiry made to
the Stockholder with respect to or that could reasonably be expected to
lead to any takeover proposal and the material terms of any such takeover
proposal or inquiry.
(f) The Stockholder shall use its reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable,
the Merger and the other Transactions.
(g) The Stockholder hereby consents to and approves the actions
taken by the Board of Directors of the Company in approving the Merger
Agreement, the Merger and the other Transactions. The Stockholder hereby
waives, and agrees not to exercise or assent, any appraisal rights under
Section 262 in connection with the Merger.
SECTION 4. [Intentionally Omitted]
SECTION 5. Termination. This Agreement shall terminate upon the
earliest of (i) the Effective Time, (ii) the termination of the Merger
Agreement in accordance with its terms and (iii) the Outside Date, other
than with respect to the liability of any party for breach hereof prior to
such termination.
SECTION 6. Additional Matters. (a) The Stockholder shall, from
time to time, execute and deliver, or cause to be executed and delivered,
such additional or further consents, documents and other instruments as
Parent may reasonably request for the purpose of effectively carrying out
the transactions contemplated hereby.
(b) Concurrently with the Closing of the Merger, each Stockholder
and Parent shall enter into the Shareholders and Registration Rights
Agreement, in the form attached as Exhibit A hereto.
(c) No Stockholder shall be deemed to make any agreement or
understanding herein with respect to any director or officer of such
Stockholder in his or her capacity as a director or officer of the Company.
Each Stockholder signs solely in its capacity as the record holder and
beneficial owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, such Stockholder's Subject Shares and nothing herein
shall limit or affect any actions taken by any director or officer of such
Stockholder in his or her capacity as a director or officer of the Company
(to the extent not specifically prohibited by the Merger Agreement).
SECTION 7. General Provisions.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto and consented to
by the Company.
(b) Notice. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or sent by
overnight courier (providing proof of delivery) to Parent or Sub in
accordance with Section 9.02 of the Merger Agreement and to the Stockholder
at its address set forth on Schedule A hereto (or at such other address for
a party as shall be specified by like notice).
(c) Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section to this Agreement unless
otherwise indicated. 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. Wherever
the words "include", "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation".
(d) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or
law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement.
This Agreement shall become effective against Parent and Sub when one or
more counterparts have been signed by Parent and Sub and delivered to each
Stockholder. This Agreement shall become effective against any Stockholder
when one or more counterparts have been executed by such Stockholder and
delivered to Parent and Sub. Each party need not sign the same counterpart.
(f) Entire Agreement; No Third-Party Beneficiaries. This
Agreement (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (ii) is not intended to
confer upon any person other than the parties hereto (and, with respect to
Section 7(a) and (h) only, the Company) any rights or remedies hereunder.
(g) Governing Law. 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 law thereof.
(h) Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole
or in part, by operation of law or otherwise, (i) by Parent or Sub without
the prior written consent of the Stockholders and the Company (except that
Parent or Sub may assign, in its sole discretion, its rights and
obligations hereunder to any affiliate of Parent, but no such assignment
shall relieve Parent or Sub of its obligations hereunder without the
consent of the Stockholders and the Company) or (ii) by any Stockholder
without the prior written consent of Parent and the Company (except that
any Stockholder may assign, in its sole discretion, its rights and
obligations hereunder to the Vencor Operating Company or one of its wholly
owned subsidiaries in connection with any Transfer permitted by the last
sentence of Section 3(d), but no such assignment shall relieve such
Stockholder of its obligations hereunder without the consent of Parent and
the Company), and any purported assignment without such consent shall be
void. Subject to the preceding sentences, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and permitted assigns.
(i) Enforcement. The parties agree 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 were otherwise
breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms
and provisions of this Agreement in any New York state court, any Federal
court located in the State of New York or the State of Delaware or in any
Delaware state court, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties
hereto (i) consents to submit itself to the personal jurisdiction of any
New York state court, any Federal court located in the State of New York or
the State of Delaware or any Delaware state court in the event any dispute
arises out of this Agreement or any Transaction, (ii) agrees that it will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that it will not bring
any action relating to this Agreement or any Transaction in any court other
than a New York state court, any Federal court sitting in the State of New
York or the State of Delaware or any Delaware state court and (iv) waives
any right to trial by jury with respect to any claim or proceeding related
to or arising out of this Agreement or any transaction contemplated hereby.
IN WITNESS WHEREOF, each party has duly executed this Agreement,
all as of the date first written above.
KAPSON SENIOR QUARTERS CORP.,
by
/s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title: President
VENCOR, INC.,
by
/s/ W. Xxxxx Xxxxxxxx
----------------------------
Name: W. Xxxxx Xxxxxxxx
Title: Chief Executive Officer
KA ACQUISITION CORP.,
by
/s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: President
SCHEDULE A
Number of Shares of
Name and Address of Stockholder Common Stock Owned
------------------------------- -------------------
Vencor
0000 Xxxxx Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 0
VALH
0000 Xxxxx Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 10,000,000
