EXHIBIT 2.6
STOCKHOLDERS AGREEMENT
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Second Amended and Restated Stockholders Agreement (this
"Agreement"), dated as of February 23, 1998, between Prometheus Senior
Quarters LLC, a Delaware limited liability company or an affiliate
thereof ("Investor"), and Xxxxx Xxxxxx, Xxxxx X. Xxxxxx and Xxxx X.
Xxxxxx (each a "Stockholder" and, collectively, the "Stockholders")
WHEREAS, Investor and each Stockholder previously entered into
that certain Stockholders Agreement, dated as of September 30, 1997,
which was amended and restated in its entirety as of October 14, 1997
(as so previously amended and restated, the "Prior Agreement") and
Investor and each Stockholder now desire to amend and restate the
Prior Agreement in its entirety;
WHEREAS, each Stockholder owns (both beneficially and of record)
the number of shares of Common Stock ("Common Stock") of Kapson Senior
Quarters Corp., a Delaware Corporation (the "Company") specified in
Exhibit A hereto;
WHEREAS, each Stockholder may be deemed to own beneficially an
additional 230,001 shares of Common Stock of the Company that are
owned of record by Xxxxxxx Xxxxxx and an additional 70,000 shares of
Common Stock of the Company that are owned of record by Xxxx Xxxxxx
(together with the shares specified in Exhibit A hereto, the
"Shares");
WHEREAS, concurrently herewith, Investor and a wholly owned
subsidiary of Investor ("Sub") are entering into an amended and
restated agreement and plan of merger with the Company, dated as of
February 23, 1998 (the "Merger Agreement"), pursuant to which Sub will
(i) offer to purchase pursuant to a tender offer all of the
outstanding shares of Common Stock at a price of $14.50 per share and
all of the outstanding shares of the $2.00 Convertible Exchangeable
Preferred Stock of the Company at a price of $27.93 per share (the
"Offer") and (ii) subsequent to the consummation of the Offer, merge
with and into the Company (the "Merger"), each upon the terms and
subject to the conditions set forth in the Merger Agreement; and
WHEREAS, as a condition to the willingness of Investor to enter
into the Merger Agreement, Investor has required that the Stockholders
agree, and in order to induce Investor to enter into the Merger
Agreement, the Stockholders have agreed, among other things, (i) to
grant Investor the option to purchase the Shares, (ii) to tender the
Shares in the Offer, (iii) to appoint Investor as Stockholders' proxy
to vote the Shares, and (iv) with respect to certain questions put to
stockholders of the Company for a vote, to vote the Shares, in each
case, in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and other good and valuable consideration,
the adequacy of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Stock Option.
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1.1. Grant of Stock Option. The Stockholders hereby grant to
Investor an irrevocable option (the "Stock Option") to purchase all,
but not less than all of the Shares at such time as Investor may
exercise the Stock Option at a per share purchase price equal to
$14.50 per share of Common Stock.
1.2. Exercise of Stock Option. (a) The Stock Option may be
exercised by Investor at any time prior to the termination of this
Agreement and prior to the earlier to occur (the "Expiration Date") of
(i) one year after the date hereof, (ii) if the Merger Agreement is
terminated, or the Investor provides written or oral notice to the
Company that it elects not to consummate the Offer or close the
transactions contemplated by the Merger Agreement, as a result of the
failure of any of the conditions specified in Exhibit A, and at the
time of such termination or notice there shall not exist any
Alternative Proposal (as such term is defined in the Merger Agreement)
at $14.50 or more per share of Common Stock for 75% or more of the
outstanding Common Stock of the Company, the termination of the Merger
Agreement and (iii) if the Merger Agreement is terminated, or the
Investor provides written or oral notice to the Company that it elects
not to consummate the Offer or close the transactions contemplated by
the Merger Agreements, as a result of the failure of any of the
conditions specified in Exhibit A and at the time of such termination
or notice there shall exist any Alternative Proposal at $14.50 or more
per share of Common Stock for 75% or more of the outstanding Common
Stock of the Company, the sixth monthly anniversary of the termination
of the Merger Agreement; provided, however, that if a tender offer
shall be commenced by any party or entity other than Investor and its
affiliates with respect to the Common Stock, then, notwithstanding any
provision of this Agreement, the Stockholders may tender all or any of
the Shares into the tender offer on or before the time 48 hours before
the expiration of the offer. The Stockholders shall give prompt notice
to Investor of any such tender by Stockholders, and each of the
Stockholders agree to give notice of revocation of the tender promptly
after actual receipt by such Stockholders of an irrevocable Exercise
Notice from Investor; provided, however, that if the Investor provides
an Exercise Notice as contemplated by clause (b) below, the Investor
shall not be obligated to purchase the shares at the applicable Stock
Option Closing if the Merger Agreement has not been terminated in
accordance with its terms and if the applicable tender offer is
withdrawn without being consummated prior to the applicable Stock
Option Closing.
(b) In the event Investor wishes to exercise the Stock
Option, Investor shall send a written notice (an "Exercise Notice") to
the Stockholders specifying the date, which shall be a Business Day
not more than ten days, 30 days in the case of an Exercise Notice
delivered as contemplated by clause (a) above, after the date of the
Exercise Notice and a place for the closing of such purchase (a "Stock
Option Closing").
(c) Upon receipt of an Exercise Notice, the
Stockholders shall be jointly and severally obligated to deliver to
Investor a certificate or certificates representing the number of
Shares specified in such Exercise Notice, in accordance with the terms
of this Agreement, on the date specified in such Exercise Notice. The
date specified in such Exercise Notice may be as early as two Business
Days after the date of such Exercise Notice.
(d) For the purposes of this Agreement, the term
"Business Day" shall mean a day on which banks are not required or
authorized to be closed in the City of New York.
1.3. Condition to Delivery of the Shares. The obligation of
Stockholders to deliver the Shares upon any exercise of a Stock Option
is subject to the following condition: There shall be no preliminary
or permanent injunction or other order by any court of competent
jurisdiction restricting, preventing or prohibiting such exercise of
such Stock Option or the delivery of the Shares subject to such Stock
Option in respect of such exercise.
1.4. Stock Option Closing. At the Stock Option Closing, the
Stockholders will deliver to Investor a certificate or certificates
evidencing all of the Shares, each such certificate being duly
endorsed in blank and accompanied by such stock powers and such other
documents as may be necessary in Investor's judgment to transfer
record ownership of the Shares into Investor's name on the stock
transfer books of the Company and Investor will purchase the delivered
Shares at a purchase price equal to $14.50 per share of Common Stock.
All payments made by Investor to Stockholders pursuant to this Section
1.4 shall be made by wire transfer of immediately available funds to
an account designated by the Stockholders or by certified bank check
payable to the Stockholders, in an amount equal to the sum of the
product of (a) $14.50 and (b) the total number of shares of Common
Stock delivered at the Stock Option Closing.
1.5. Adjustments Upon Changes in Capitalization. In the
event of any change in the number of issued and outstanding shares of
Common Stock by reason of any stock dividend, subdivision, merger,
recapitalization, combination, conversion or exchange of shares, or
any other change in the corporate or capital structure of the Company
(including, without limitation, the declaration or payment of an
extraordinary dividend of cash or securities) which would have the
effect of diluting or otherwise adversely affecting Investor's rights
and privileges under this Agreement, the number and kind of the Shares
and the consideration payable in respect of the Shares shall be
appropriately and equitably adjusted to restore to Investor its rights
and privileges under this Agreement. Without limiting the scope of the
foregoing, in any such event, at the option of Investor, the Stock
Option shall represent the right to purchase, in addition to the
number and kind of Shares which Investor would be entitled to purchase
pursuant to the immediately preceding sentence, whatever securities,
cash or other property the Shares subject to the Stock Option shall
have been converted into or otherwise exchanged for, together with any
securities, cash or other property which shall have been distributed
with respect to such Shares.
2. Representations and Warranties of the Stockholders. The
Stockholders hereby jointly and severally represent and warrant to
Investor as follows:
2.1. Title to the Shares. Each of the Stockholders is the
owner (both beneficially and of record) of the number of shares of
Common Stock specified opposite such Stockholder's name on Exhibit A
hereto and the Stockholders do not have any other rights of any nature
to acquire any additional shares of Common Stock or any other shares
of capital stock of the Company. Each of the Stockholders owns that
number of shares of Common Stock specified opposite such Stockholder's
name on Exhibit A hereto free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on Stockholder's voting rights, charges and other
encumbrances of any nature whatsoever, and, except as provided in this
Agreement, no Stockholder has appointed or granted any proxy, which
appointment or grant is still effective, with respect to any of the
Shares. Upon the exercise of the Stock Option and the delivery to
Investor by the Stockholders of a certificate or certificates
evidencing the Shares, Investor will receive good, valid and
marketable title to the Shares, free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on Investor's voting rights, charges and other
encumbrances of any nature whatsoever.
2.2. Authority Relative to This Agreement. Each Stockholder
has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by each Stockholder and, assuming the
due authorization, execution and delivery by Investor, constitutes a
legal, valid and binding obligation of each Stockholder, enforceable
against each Stockholder in accordance with its terms.
2.3. No Conflict. The execution and delivery of this
Agreement by each Stockholder does not, and the performance of this
Agreement by each Stockholder will not, conflict with, violate or
result in any breach of or constitute a default under (or an event
which with notice or lapse of time or both would become a default
under) any agreement, judgment, injunction, order, law, regulation or
arrangement to which any Stockholder is a party or is bound, except in
each case to the extent any such breach or default, whether taken
singly or in the aggregate, would not have a material adverse effect
on the ability of the Stockholders to vote the Shares, perform their
respective obligations hereunder, and consummate the transactions
contemplated hereby.
2.4. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Stockholders.
3. Representations and Warranties of Investor. Investor
hereby represents and warrants to the Stockholders as follows:
3.1. Authority Relative to This Agreement. Investor has all
necessary power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Investor and the consummation by Investor of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action on the part of Investor. This
Agreement has been duly and validly executed and delivered by Investor
and, assuming the due authorization, execution and delivery by the
Stockholders, constitutes a legal, valid and binding obligation of
Investor, enforceable against Investor in accordance with its terms.
3.2. Investment Intent. Investor hereby represents that any
securities it purchases pursuant to this Agreement are being purchased
for its own account for investment and not with a view to, or for sale
in connection with, any public distribution thereof.
4. Covenants of Stockholder.
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4.1. No Disposition or Encumbrance of Shares; No Conversion
of Shares; Acquisition of Additional Shares; No Exercise of Warrants.
(a) Each Stockholder hereby covenants and agrees that, except as
contemplated by this Agreement, each Stockholder shall not, and shall
not offer or agree to, sell, transfer, tender, assign, hypothecate or
otherwise dispose of, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal,
agreement, limitation on such Stockholder's voting rights, charge or
other encumbrance of any nature whatsoever with respect to the Shares
now owned or that may hereafter be acquired by such Stockholder.
(b) Each Stockholder hereby covenants and agrees that
any additional shares of capital stock of the Company acquired by each
Stockholder after the date hereof shall be subject to this Agreement
and shall, for all purposes of this Agreement, be deemed to be
"Shares".
4.2. No Solicitation of Transactions. Each Stockholder shall
not, directly or indirectly, through any agent or representative or
otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any individual, corporation, partnership,
limited partnership, syndicate, person (including, without limitation,
a "person" as defined in section 13(d)(3) of the Securities Exchange
Act of 1934, as amended), trust, association or entity or government,
political subdivision, agency or instrumentality of a government
(collectively, other than Investor, a "Person") relating to (i) any
acquisition or purchase of all or any of the Shares or (ii) any
acquisition or purchase of all or (other than in the ordinary course
of business) any portion of the assets of, or any equity interest in,
the Company or any business combination, whether by merger,
consolidation, or otherwise, with the Company or participate in any
negotiations regarding, or furnish to any Person any information with
respect to, or otherwise cooperate in any way with, or assist or
participate in or facilitate or encourage, any effort or attempt by
any Person to do or seek any of the foregoing. Each Stockholder hereby
represents that neither it nor its agents or representatives is now
engaged in any discussions or negotiations with any Person with
respect to any of the foregoing.
4.3. Compliance of Stockholder with This Agreement. Each
Stockholder shall take all actions and forbear from all actions, in
each case, necessary in order that (a) all of such Stockholder's
representations and warranties hereunder are true and correct and (b)
such Stockholder fulfills all of its obligations hereunder.
5. Voting Agreement; Proxy of Stockholder.
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5.1. Voting Agreement. Each Stockholder hereby agrees that,
during the time this Agreement is in effect, at any meeting of the
stockholders of the Company, however called, and in any action by
written consent of the stockholders of the Company, each Stockholder
shall, to the extent applicable, (a) vote (or execute a consent in
respect of) all of the Shares in favor of the Merger, the Merger
Agreement (as amended from time to time) and any of the transactions
contemplated by the Merger Agreement; (b) vote (or execute a consent
in respect of) the Shares against any action or agreement involving a
sale of the Shares, merger, or sale of substantially all of the assets
of the Company that would result in a breach in any material respect
of any obligation of the Company under the Merger Agreement; and (c)
vote (or execute a consent in respect of) the Shares against any
action or agreement that would reasonably be expected to impede,
interfere with, delay or attempt to discourage the Merger.
5.2. Irrevocable Proxy. Each Stockholder agrees that, in the
event such Stockholder shall fail to comply with the provisions of
Section 5.1 hereof as determined by Investor in its sole discretion,
such failure shall result, without any further action by such
Stockholder, in the irrevocable appointment of Investor as the
attorney and proxy of such Stockholder pursuant to the provisions of
Delaware General Corporation Law, with full power of substitution, to
vote, and otherwise act (by written consent or otherwise) with respect
to all shares of Common Stock, including the Shares owned by such
Stockholder, that such Stockholder is entitled to vote at any meeting
of stockholders of the Company (whether annual or special and whether
or not an adjourned or postponed meeting) or consent in lieu of any
such meeting or otherwise, on the matters and in the manner specified
in Section 5.1 hereof. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE
AND COUPLED WITH AN INTEREST. Each Stockholder hereby revokes,
effective upon the execution and delivery of the Merger Agreement by
the parties thereto, all other proxies and powers of attorney with
respect to the Shares that such Stockholder may have heretofore
appointed or granted, and no subsequent proxy or power of attorney
(except in furtherance of such Stockholder's obligations under Section
5.1 hereof) shall be given or written consent executed (and if given
or executed, shall not be effective) by such Stockholder with respect
thereto so long as this Agreement remains in effect.
6. Tender of Shares; Automatic Exercise of Option.
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6.1. Tender of Shares. Each Stockholder hereby agrees that,
during the time this Agreement is in effect, each Stockholder shall,
to the extent applicable, tender (and/or cause to be tendered) all of
the Shares to Investor immediately upon consummation of the Offer.
6.2. Automatic Exercise. Each Stockholder agrees that, in
the event such Stockholder shall fail to comply with the provisions of
Section 6.1 hereof as determined by Investor in its sole discretion,
such failure shall result, without any further action by such
Stockholder or Investor, in the automatic and irrevocable exercise of
the Stock Option by Investor and the provisions of this Agreement
applicable to such exercise, the delivery of the Shares and the Stock
Option Closing shall take effect as though an Exercise Notice had been
delivered to the Stockholders pursuant to Section 1.2(b) of this
Agreement.
7. Termination. This Agreement shall terminate on the date
(the "Termination Date") that is the earliest of (i) the date upon
which the Merger is consummated, (ii) one year after the date hereof,
(iii) the Expiration Date, or (iv) a breach by Investor and/or Sub of
its obligations to fund and close the Merger.
8. Miscellaneous.
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8.1. Expenses. Except as otherwise provided herein, all
costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring
such expenses.
8.2. Further Assurances. Each Stockholder and Investor shall
execute and deliver all such further documents and instruments and
take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
8.3. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this
Agreement were not performed in accordance with the terms hereof and
that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or in equity.
8.4. Entire Agreement. This Agreement constitutes the entire
agreement between Investor and the Stockholders with respect to the
subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between Investor and the
Stockholders with respect to the subject matter hereof.
8.5. Assignment. This Agreement shall not be assigned by
operation of law or otherwise, except that Investor may assign all or
any of its rights and obligations hereunder to any affiliate of
Investor, provided that no such assignment shall relieve Investor of
its obligations hereunder if such assignee does not perform such
obligations.
8.6. Parties in Interest. This Agreement shall be binding
upon, inure solely to the benefit of, and be enforceable by, the
parties hereto and their successors and permitted assigns. Nothing in
this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
8.7. Amendment; Waiver. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto. Any
party hereto may (a) extend the time for the performance of any
obligation or other act of any other party hereto, (b) waive any
inaccuracy in the representations and warranties contained herein or
in any document delivered pursuant hereto and (c) waive compliance
with any agreement or condition contained herein. Any such extension
or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
8.8. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of this Agreement 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 a mutually acceptable
manner in order that the terms of this Agreement remain as originally
contemplated to the fullest extent possible.
8.9. Notices. Except as otherwise provided herein, all
notices, requests, claims, demands and other communications hereunder
shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by cable,
facsimile transmission, telegram or telex or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other
address for a party as shall be specified in a notice given in
accordance with this Section 8.9):
if to Investor:
Prometheus Senior Quarters LLC
c/o Lazard Freres Real Estate Investors L.L.C.
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxx X. Mechanic, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Stockholders:
Xxxxx Xxxxxx
Kapson Senior Quarters Corp.
000 Xxxxxxxxx Xxxx Xxxx.
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
8.10. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in Delaware
without regard to any principles of choice of law or conflicts of law
of such State. All actions and proceedings arising out of or relating
to this Agreement shall be heard and determined in any state or
federal court sitting in Delaware.
8.11. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
8.12. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed to be an original but all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the date first
written above.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx
PROMETHEUS SENIOR QUARTERS LLC
By: LF STRATEGIC REALTY INVESTORS II
L.P., its Sole Member
By: LAZARD FRERES REAL ESTATE INVESTORS
L.L.C., its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Principal
EXHIBIT A
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Stockholder Number of Shares
----------- ----------------
Xxxxx Xxxxxx 1,283,333
Xxxxx X. Xxxxxx 1,283,333
Xxxx X. Xxxxxx 1,283,333
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TOTAL: 3,849,999