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EXHIBIT 99.2
STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT is entered into as of May 24, 2000, by and
between Xxxxxx Pharmaceuticals, Inc., a Nevada corporation ("PARENT"), Purchaser
(as defined hereinafter), and ____________ ("STOCKHOLDER").
RECITALS
A. Parent, WS Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("PURCHASER"), and Schein Pharmaceutical,
Inc., a Delaware corporation (the "COMPANY"), are entering into an Agreement and
Plan of Merger of even date herewith (the "MERGER AGREEMENT") which provides
(subject to the conditions set forth therein) for the Offer, followed by the
merger of Purchaser into the Company (the "MERGER").
B. In order to induce Parent and Purchaser to enter into the Merger
Agreement, Stockholder is entering into this Stockholder Agreement.
AGREEMENT
The parties to this Stockholder Agreement, intending to be legally
bound, agree as follows:
SECTION 1. CERTAIN DEFINITIONS
For purposes of this Stockholder Agreement:
(a) "COMPANY COMMON STOCK" shall mean the common stock, par value $.01
per share, of the Company.
(b) "EXPIRATION DATE" shall mean the earlier of (i) the date on which
the Merger Agreement is validly terminated in accordance with its terms, (ii)
the date on which the Merger becomes effective, and (iii) the date on which
payment is made to Stockholder of the full purchase price for all shares of
Company Common Stock tendered by Stockholder and not withdrawn pursuant to the
Offer as provided in the next to the last sentence of Section 3.4 of this
Stockholder Agreement; provided, however, that if either (A) a First Option
Triggering Event shall have occurred, or (B) prior to the valid termination of
the Merger Agreement a Triggering Event (as defined in the Merger Agreement)
shall have occurred, "Expiration Date" shall mean the date one year following
the date of the occurrence of the First Option Triggering Event or the valid
termination of the Merger Agreement, as the case may be.
(c) A "FIRST OPTION TRIGGERING EVENT" shall be deemed to have occurred
if either: (i) less than 24,500,000 shares of Company Common Stock are validly
tendered on or before the fifth business day following the commencement of the
Offer pursuant to the Merger Agreement, or (ii) shares of Company Common Stock
are withdrawn from the Offer such that at any time after the fifth business day
following the commencement of the Offer less than 24,500,000 remain tendered and
not withdrawn pursuant to the Offer.
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(d) "OFFER" shall mean a cash tender offer made by Purchaser to acquire
all of the outstanding shares of Company Common Stock at a price of $19.50 per
share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Merger Agreement.
(e) Stockholder shall be deemed to "OWN" or to have acquired "OWNERSHIP"
of a security if Stockholder: (i) is the record owner of such security; or (ii)
is the "beneficial owner" (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934) of such security.
(f) "PERSON" shall mean any (i) individual, (ii) corporation, limited
liability company, partnership or other entity, or (iii) governmental authority.
(g) A "SECOND OPTION TRIGGERING EVENT" shall be deemed to have occurred
if: (i) an Acquisition Proposal (as defined in the Merger Agreement) shall have
been disclosed, announced, commenced, submitted or made, and (ii) the Company
becomes aware of such Acquisition Proposal.
(h) "SUBJECT SECURITIES" shall mean: (i) forty-six and nine-tenths
percent of all securities of the Company (including all shares of Company Common
Stock and all options, warrants and other rights to acquire shares of Company
Common Stock) Owned by Stockholder as of the date of this Stockholder Agreement;
and (ii) forty-six and nine-tenths percent of all additional securities of the
Company (including all additional shares of Company Common Stock and all
additional options, warrants and other rights to acquire shares of Company
Common Stock) of which Stockholder acquires Ownership during the period from the
date of this Stockholder Agreement through the Expiration Date.
(i) A Person shall be deemed to have effected a "TRANSFER" of a security
if such Person directly or indirectly: (i) sells, pledges, encumbers, grants an
option with respect to, transfers or disposes of such security or any interest
in such security; or (ii) enters into an agreement or commitment contemplating
the possible sale of, pledge of, encumbrance of, grant of an option with respect
to, transfer of or disposition of such security or any interest therein.
SECTION 2. PROHIBITION ON TRANSFER OF SUBJECT SECURITIES
2.1 PROHIBITION ON TRANSFER OF SUBJECT SECURITIES. During the period
from the date of this Stockholder Agreement through the Expiration Date, except
pursuant to this Stockholder Agreement or the Merger Agreement, Stockholder
shall not cause or permit any Transfer of any of the Subject Securities to be
effected.
2.2 PROHIBITION ON TRANSFER OF VOTING RIGHTS. During the period from the
date of this Stockholder Agreement through the Expiration Date, Stockholder
shall ensure that: (a) none of the Subject Securities is deposited into a voting
trust; and (b) no proxy is granted, and no voting agreement or similar agreement
is entered into, with respect to any of the Subject Securities.
SECTION 3. TENDER AND VOTING OF SHARES; PARENT'S OBLIGATIONS
3.1 AGREEMENT TO TENDER. During the period from the date of this
Stockholder Agreement through the Expiration Date, Stockholder shall validly
tender, or shall cause to be
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validly tendered, pursuant to the Offer, not less than forty-six and nine-tenths
percent of the shares of Company Common Stock that are Owned by Stockholder at
the time of the commencement of the Offer pursuant to the Merger Agreement and
shall not withdraw shares so tendered from the Offer; provided that if the Offer
is amended in a circumstance that requires the consent or approval of the
Company pursuant to Section 1.01 of the Merger Agreement, Stockholder shall not
be obligated to tender hereunder unless the amendment is made with his prior
written approval. For all shares of Company Common Stock validly tendered in the
Offer and not withdrawn, Stockholder shall be entitled to receive the highest
price paid by Purchaser in the Offer.
3.2 VOTING AGREEMENT. During the period from the date of this
Stockholder Agreement through the Expiration Date:
(a) at any meeting of stockholders of the Company, however called,
Stockholder shall cause forty-six and nine-tenths percent of all outstanding
shares of Company Common Stock that are Owned by Stockholder as of the record
date fixed for such meeting to be voted:
(i) in favor of the approval and adoption of the Merger
Agreement and the approval of the Merger, and in favor of each of the other
actions contemplated by the Merger Agreement as necessary for the consummation
of the Merger;
(ii) against any action or agreement that would result in a
breach of any representation, warranty, covenant or obligation of the Company in
the Merger Agreement; and
(iii) except as otherwise agreed to in writing in advance by
Parent in its sole discretion, against the following actions (other than the
Merger and the transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or any subsidiary of the Company; (B)
any sale, lease or transfer of a material amount of assets of the Company or any
subsidiary of the Company; (C) any reorganization, recapitalization, dissolution
or liquidation of the Company or any subsidiary of the Company; (D) except as
permitted by Section 1.03 of the Merger Agreement, any change in a majority of
the board of directors of the Company; (E) except as permitted by Section 2.04
of the Merger Agreement, any amendment to the Company's certificate of
incorporation; (F) any change in the capitalization of the Company or the
Company's corporate structure; or (G) any other action which is intended, or
could reasonably be expected to, impede, interfere with, delay, postpone,
discourage or adversely affect the contemplated economic benefits to Parent of
the Merger or any of the other transactions contemplated by the Merger Agreement
or this Stockholder Agreement.
Prior to the Expiration Date, Stockholder shall not enter into any agreement or
understanding with any Person to vote or give instructions in any manner
inconsistent with clause "(i)," "(ii)" or "(iii)" of the preceding sentence.
(b) in the event written consents are solicited or otherwise sought
from stockholders of the Company with respect to the approval or adoption of the
Merger Agreement,
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with respect to the approval of the Merger or with respect to any of the other
actions contemplated by the Merger Agreement as necessary for the consummation
of the Merger, Stockholder shall cause to be executed, with respect to forty-six
and nine-tenths percent of all outstanding shares of Company Common Stock that
are Owned by Stockholder as of the record date fixed for the consent to the
proposed action, a written consent or written consents to such proposed action.
3.3 IRREVOCABLE PROXY. Contemporaneously with the execution of this
Stockholder Agreement: (i) Stockholder shall deliver to Parent a proxy in the
form attached to this Stockholder Agreement as EXHIBIT A, which shall be
irrevocable to the fullest extent permitted by law, with respect to the shares
referred to therein (the "IRREVOCABLE PROXY"); and (ii) Stockholder shall cause
to be delivered to Parent an additional Irrevocable Proxy (in the form attached
hereto as EXHIBIT A) executed on behalf of the record owner of forty-six and
nine-tenths percent of any outstanding shares of Company Common Stock that are
owned beneficially (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934), but not of record, by Stockholder.
3.4 PARENT'S OBLIGATIONS. The obligation of Parent to cause Purchaser to
commence the Offer, conduct and consummate the Offer and accept for payment, and
pay for, the shares of Company Common Stock tendered and not withdrawn pursuant
to the Offer shall be subject only to the terms and conditions of the Merger
Agreement and any amendments thereto. Parent shall comply, and shall cause
Purchaser to comply, with all of its obligations under the Merger Agreement.
Subject to the terms and conditions of the Offer, Purchaser shall, and Parent
shall cause Purchaser to, accept for payment, and pay for, all shares of Company
Common Stock tendered by Stockholder and not withdrawn pursuant to the Offer,
the purchase price of which shall be the highest per share price paid for shares
of the Company's Common Stock in the Offer. Parent shall provide or cause to be
provided to Purchaser on a timely basis the funds sufficient to accept for
payment, and pay for, any and all shares of Company Common Stock that Purchaser
becomes obligated to accept for payment and pay for, pursuant to the Offer.
SECTION 4. OPTIONS
4.1 FIRST OPTION. From and after the occurrence of a First Option
Triggering Event until the Expiration Date, Purchaser shall have the absolute
right to purchase, from time to time, up to an aggregate of forty-six and
nine-tenths percent of all of the outstanding shares of Company Common Stock
that are Owned by Stockholder as of the date on which Purchaser shall exercise
such right, at a purchase price of $12.00 per share (the "FIRST OPTION EXERCISE
PRICE"), net to Stockholder in cash, upon the terms and subject to the
conditions set forth in this Stockholder Agreement. In the event Purchaser
wishes to exercise the right referred to in the preceding sentence (the "First
Option"), Purchaser shall deliver to Stockholder a written notice (an "Exercise
Notice") specifying: (i) the number of shares of Company Common Stock Purchaser
will purchase; (ii) the place at which such shares are to be purchased; and
(iii) the date on which such shares are to be purchased. (The date of delivery
of such Exercise Notice to Stockholder is referred to as the applicable "First
Notice Date," and the First Option shall be deemed to have been validly
exercised on such First Notice Date with respect to the shares referred to in
such Exercise Notice.) The closing of the purchase of such shares (the
applicable "First Closing") shall take place at the place specified in the
Exercise Notice and on the date
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specified in such Exercise Notice (the applicable "First Closing Date");
provided, however, that: (A) if such purchase cannot be consummated on such
First Closing Date by reason of any applicable law, rule, regulation or other
legal impediment, then Purchaser may extend the First Closing Date to a date
(either before or after the Expiration Date) not more than 30 days after the
date on which such impediment is removed; and (B) if prior notification to or
approval of any Governmental Entity (as defined in the Merger Agreement) is
required, or if any waiting period must expire or be terminated, in connection
with such purchase, then (1) Stockholder shall use its best efforts (and shall
take all action within its control) to ensure that the Company shall promptly
cause to be filed the required notice or application for approval and shall
expeditiously process such notice or application, (2) Stockholder shall use its
best efforts (and shall take all action within its control) to ensure that the
Company shall cooperate with Purchaser in the filing of any such notice or
application required to be filed by Purchaser and in the obtaining of any such
approval required to be obtained by Purchaser, and (3) Purchaser may extend the
First Closing Date to a date (either before or after the Expiration Date) not
more than 30 days after the latest date on which any required notification has
been made, any required approval has been obtained or any required waiting
period has expired or been terminated. At the First Closing of the purchase of
the shares pursuant to the First Option, Stockholder shall deliver to Purchaser
all of the shares of Company Common Stock to be purchased by delivery of a
certificate or certificates evidencing such shares so purchased by Purchaser
duly endorsed or with executed blank stock power attached, and Purchaser shall
make payment to Stockholder of the aggregate First Option Exercise Price for the
shares being purchased upon exercise of the First Option in immediately
available funds.
4.2 SECOND OPTION.
(a) If (i) the Merger Agreement has not been terminated, (ii) a
Second Option Triggering Event has occurred, and (iii) the Stockholder has,
directly or indirectly, either (A) taken any action, or failed to take any
action, that could be construed to suggest that Stockholder might not support
the prompt completion of a transaction with Parent and Purchaser similar to the
Offer and the Merger, including, without limitation, having withdrawn shares
tendered pursuant to the Offer, or (B) taken any action, or failed to take any
action, that could be construed to suggest that Stockholder might support an
Acquisition Proposal disclosed, announced, commenced, submitted or made by a
person or entity (other than Parent or Purchaser), Purchaser shall, in its sole
discretion, have the absolute right either (1) to require that Stockholder
validly tender, pursuant to the Offer, all but not less than all of the
outstanding shares of Company Common Stock that are Owned by Stockholder as of
the date on which Purchaser shall exercise such right, and that such shares not
be withdrawn, or (2) to purchase all but not less than all of the outstanding
shares of Company Common Stock that are Owned by Stockholder as of the date on
which Purchaser shall exercise such right, at a purchase price of $19.50 per
share (the "SECOND OPTION EXERCISE PRICE"), net to Stockholder in cash, upon the
terms and subject to the conditions set forth in this Stockholder Agreement,
which right shall be exercised (and, if not timely exercised, forfeited) on or
prior to the date one year after the first to occur of the circumstances
described in clause (iii)(A) or (iii)(B) of this Section 4.2(a).
(b) If (i) the Merger Agreement has been terminated (A) in
accordance with the provisions of Section 9.01(d), 9.01(e)(i) or 9.01(e)(ii)(B)
of Article IX of the Merger Agreement; (B) by Parent in accordance with the
provisions of Section 9.01(c) of the Merger
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Agreement; (C) by the Company in accordance with the provisions of Section
9.01(c) after an Acquisition Proposal has been disclosed, announced, commenced,
submitted or made; (D) in accordance with the provisions of Section 9.01(f) the
Merger Agreement if (1) an Acquisition Proposal has been disclosed, announced,
commenced, submitted or made and (2) the Offer has expired without any Shares
having been purchased pursuant to the Offer; or (E) in accordance with the
provisions of Section 9.01(f) of the Merger Agreement in the circumstances
described in paragraphs (f), (h) (as it relates to Section 6.01(b)), (i) or (j)
of Annex A to the Merger Agreement, (ii) a Second Option Triggering Event has
occurred, and (iii) prior to or during the one year period after the occurrence
of the Second Option Triggering Event, Stockholder has, directly or indirectly,
taken any action, or failed to take any action, that could be construed to
suggest that Stockholder might support an Acquisition Proposal disclosed,
announced, commenced, submitted or made by a person or entity (other than Parent
or Purchaser), Purchaser shall have the absolute right to purchase all but not
less than all of the outstanding shares of Company Common Stock that are Owned
by Stockholder as of the date on which Purchaser shall exercise such right, at a
purchase price per share equal to the Second Option Exercise Price, net to
Stockholder in cash, upon the terms and subject to the conditions set forth in
this Stockholder Agreement, which right shall be exercised (and, if not timely
exercised, forfeited) on or prior to the date one year after the occurrence of
the circumstances described in clause (iii) of this Section 4.2(b); provided,
that if, after the valid termination of the Merger Agreement, Stockholder
informs Purchaser in writing that it desires to sell all but not less than all
of the outstanding shares of Company Common Stock that are Owned by Stockholder
pursuant to a bona fide third-party offer, then Purchaser shall have a
reasonable period of time during which to, and shall receive all information
reasonably necessary to decide whether to, exercise the right to purchase
contained in this Section 4.2. If such right is not exercised within such
reasonable time, Stockholder may sell such shares pursuant to such offer without
further rights in respect thereof inuring to Purchaser. Upon such sale (but only
upon such sale), Purchaser's option hereunder shall terminate.
(c) Subject to the proviso at the end of Section 4.2(b), during the
one-year period that Purchaser shall be entitled to exercise its option right
under Section 4.2(a) or 4.2(b) (the "Option Exercise Period"), Stockholder shall
ensure that all shares of Company Common Stock or other voting securities of the
Company that are Owned by Stockholder are voted in the manner set forth in the
form of proxy attached to this Stockholder Agreement as EXHIBIT B.
(d) Subject to the proviso at the end of Section 4.2(b), within two
business days after the date on which the Option Exercise Period commences: (i)
Stockholder shall deliver to Parent a proxy in the form attached to this
Stockholder Agreement as EXHIBIT B, which shall be irrevocable to the fullest
extent permitted by law, with respect to the shares referred to therein (the
"IRREVOCABLE PROXY"); and (ii) Stockholder shall cause to be delivered to Parent
an additional Irrevocable Proxy (in the form attached hereto as EXHIBIT B)
executed on behalf of the record owner all of the outstanding shares of Company
Common Stock that are owned beneficially (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934), but not of record, by Stockholder.
In the event Purchaser wishes to exercise the option right referred to in
Section 4(a) or 4(b) of this Stockholder Agreement (the "Second Option"),
Purchaser shall deliver to Stockholder an Exercise Notice during the applicable
Option Exercise Period specifying: (i) the place at which
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the outstanding shares of the Company Common Stock that are Owned by Stockholder
as of the Second Notice Date (as defined hereafter) are to be purchased; (ii)
the date on which such shares are to be purchased, which, except as provided
hereafter, shall be not later than the date 15 days after the Second Notice
Date. (The date of delivery of such Exercise Notice to Stockholder is referred
to as the applicable "Second Notice Date," and the Second Option shall be deemed
to have been validly and timely exercised on such Notice Date provided that such
Exercise Notice is delivered within the applicable notice period.) The closing
of the purchase of such shares (the applicable "Second Closing") shall take
place at the place specified in the Exercise Notice and on the date specified in
such Exercise Notice (the applicable "Second Closing Date"); provided, however,
that: (A) if such purchase cannot be consummated on such Second Closing Date by
reason of any applicable law, rule, regulation or other legal impediment, then
Purchaser may extend the Second Closing Date to a date (either before or after
the date on which the applicable Exercise Period would expire) not more than 30
days after the date on which such impediment is removed; and (B) if prior
notification to or approval of any Governmental Entity (as defined in the Merger
Agreement) is required, or if any waiting period must expire or be terminated,
in connection with such purchase, then (1) Stockholder shall use its best
efforts (and shall take all actions within its control) to ensure that the
Company shall promptly cause to be filed the required notice or application for
approval and shall expeditiously process such notice or application, (2)
Stockholder shall use its best efforts (and shall take all actions within its
control) to ensure that the Company shall cooperate with Purchaser in the filing
of any such notice or application required to be filed by Purchaser and in the
obtaining of any such approval required to be obtained by Purchaser, and (3)
Purchaser may extend the Second Closing Date to a date (either before or after
the date on which the applicable Exercise Period would expire) not more than 30
days after the latest date on which any required notification has been made, any
required approval has been obtained or any required waiting period has expired
or been terminated. At the Second Closing of the purchase of the shares pursuant
to the Second Option, Stockholder shall deliver to Purchaser all of the shares
of Company Common Stock to be purchased by delivery of a certificate or
certificates evidencing such shares so purchased by Purchaser duly endorsed or
with executed blank stock power attached, and Purchaser shall make payment to
Stockholder of the aggregate Second Option Exercise Price for the shares being
purchased upon exercise of the Second Option in immediately available funds.
4.3 PURCHASE OF ALL SHARES. If, at any time, Purchaser shall have the
right to purchase all or less than all of the outstanding shares of the Company
Common Stock that are Owned by Stockholder by virtue of Purchaser having the
right to exercise the First Option and the Second Option at the same time or to
elect which of such options it will exercise at that time, then Purchaser must
elect, if it exercises either of such rights, to purchase all but not less than
all of such shares, in which event the purchase price for such shares shall be
$19.50.
SECTION 5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If the outstanding shares of Company Common Stock are changed into a
different number or class of shares by reason of any stock split, division or
subdivision of shares, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction, then the type and number of
shares or other securities subject to this Stockholder Agreement, the applicable
First Option Exercise Price and Second Option Exercise Price and the other
numbers and dollar amounts referred to in this Stockholder Agreement shall be
adjusted appropriately,
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and the Company shall ensure that proper provision is made in the agreements and
other documents governing such transaction so that Purchaser shall receive upon
exercise of the First Option and the Second Option the same class and number of
outstanding shares or other securities or property that Purchaser would have
received if the First Option or Second Option, as the case may be, had been
exercised immediately prior to such transaction or the record date for
determining the stockholders entitled to participate in such transaction, as
applicable.
SECTION 6. WAIVER OF APPRAISAL RIGHTS
Stockholder hereby irrevocably and unconditionally waives, and agrees to
cause to be waived and to prevent the exercise of, any rights of appraisal, any
dissenters' rights and any similar rights relating to the Merger or any related
transaction that Stockholder or any other Person may have by virtue of the
ownership of any outstanding shares of Company Common Stock Owned by
Stockholder.
SECTION 7. NO SOLICITATION
During the period from the date of this Stockholder Agreement through
the Expiration Date, Stockholder shall not, directly or indirectly, and
Stockholder shall ensure that his Representatives (as defined in the Merger
Agreement) do not, directly or indirectly: (i) solicit, initiate, encourage or
induce the making, submission or announcement of any Acquisition Proposal (as
defined in the Merger Agreement) or take any action that could reasonably be
expected to lead to an Acquisition Proposal; (ii) furnish any information
regarding the Company or any direct or indirect subsidiary of the Company to any
Person in connection with or in response to an Acquisition Proposal or potential
Acquisition Proposal; or (iii) engage in discussions with any Person with
respect to any Acquisition Proposal. Stockholder shall immediately cease and
discontinue, and Stockholder shall ensure that his Representatives immediately
cease and discontinue, any existing discussions with any Person that relate to
any Acquisition Proposal.
SECTION 8. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder hereby represents and warrants to Parent as follows:
8.1 AUTHORIZATION, ETC. Stockholder has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this Stockholder
Agreement and the Irrevocable Proxy and to perform his obligations hereunder and
thereunder. This Stockholder Agreement and the Irrevocable Proxy have been duly
executed and delivered by Stockholder and constitute legal, valid and binding
obligations of Stockholder, enforceable against Stockholder in accordance with
their terms, subject to (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.
8.2 NO CONFLICTS OR CONSENTS
(a) The execution and delivery of this Stockholder Agreement and
the Irrevocable Proxy by Stockholder do not, and the performance of this
Stockholder Agreement and the Irrevocable Proxy by Stockholder will not: (i)
conflict with or violate any law, rule,
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regulation, order, decree or judgment applicable to Stockholder or by which he
or any of his properties is or may be bound or affected; or (ii) result in or
constitute (with or without notice or lapse of time) any breach of or default
under, or, except for those rights set forth in the General Shareholders
Agreement dated as of September 30, 1994 among Stockholder, the Company and the
other stockholders of the Company that are parties thereto (the "General
Shareholders Agreement"), and in the Continuing Shareholders Agreement dated as
of September 30, 1994 among Stockholder, the Company and the other stockholders
of the Company that are parties thereto (the "Continuing Shareholders
Agreement") all of which have been waived in connection with the Merger and the
Offer, give to any other Person (with or without notice or lapse of time) any
right of termination, amendment, acceleration or cancellation of, or result
(with or without notice or lapse of time) in the creation of any encumbrance or
restriction on any of the Subject Securities pursuant to, any contract to which
Stockholder is a party or by which Stockholder or any of his affiliates or
properties is or may be bound or affected.
(b) The execution and delivery of this Stockholder Agreement and
the Irrevocable Proxy by Stockholder do not, and the performance of this
Stockholder Agreement and the Irrevocable Proxy by Stockholder will not, require
any consent or approval of any Person, except for those consents and approvals
set forth in the General Shareholders Agreement and the Continuing Shareholders
Agreement, all of which have been obtained or waived in connection with the
Merger and the Offer.
8.3 TITLE TO SECURITIES. As of the date of this Stockholder Agreement:
(a) Stockholder holds of record (free and clear of any encumbrances or
restrictions, except those set forth in the General Shareholders Agreement and
the Continuing Shareholders Agreement) the number of outstanding shares of
Company Common Stock set forth under the heading "Shares Held of Record" on the
signature page hereof; (b) Stockholder holds (free and clear of any encumbrances
or restrictions, except those set forth in the General Shareholders Agreement
and the Continuing Shareholders Agreement) the options, warrants and other
rights to acquire shares of Company Common Stock set forth under the heading
"Options and Other Rights" on the signature page hereof; (c) Stockholder Owns
the additional securities of the Company set forth under the heading "Additional
Securities Beneficially Owned" on the signature page hereof; and (d) Stockholder
does not directly or indirectly Own any shares of capital stock or other
securities of the Company, or any option, warrant or other right to acquire (by
purchase, conversion or otherwise) any shares of capital stock or other
securities of the Company, other than the shares and options, warrants and other
rights set forth on the signature page hereof or in the General Shareholders
Agreement or in the Continuing Shareholders Agreement.
8.4 ACCURACY OF REPRESENTATIONS. The representations and warranties
contained in this Stockholder Agreement are accurate in all material respects as
of the date of this Stockholder Agreement, will be accurate in all respects at
all times through the Expiration Date and will be accurate in all respects as of
the date of the consummation of the Merger as if made on that date.
SECTION 9. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Parent and Purchaser hereby represent and warrant to Stockholder as
follows:
9.1 ORGANIZATION; AUTHORIZATION, ETC.
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(a) Each of Parent and Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation.
(b) Each of Parent and Purchaser has the absolute and unrestricted
corporate power and authority to execute and deliver this Stockholder Agreement
and to perform its obligations hereunder. This Stockholder Agreement has been
duly executed and delivered by each of Parent and Purchaser and constitute
legal, valid and binding obligations of each of them, enforceable against each
of them in accordance with the terms hereof, subject to (i) laws of general
application relating to bankruptcy, insolvency and the receipt of debtors, and
(ii) rules of laws governing specific performance, injunctive relief and other
equitable remedies.
9.2 NO CONFLICT; CONSENTS.
(a) The execution and delivery of this Stockholder Agreement by
each of Parent and Purchaser does not, and the performance of this Stockholder
Agreement by each of Parent and Purchase will not: (i) conflict with the
Certificate of Incorporation or By-laws of Parent or Purchaser; or (ii) conflict
with or violate any laws, rule, regulation, order, decree or judgment applicable
to Parent or Purchaser or by which either of their respective properties is or
may be bound or affected.
(b) The execution and delivery of this Stockholder Agreement by
Parent and Purchaser do not, and the performance of this Stockholder Agreement
will not, require any consent or approval of any person.
SECTION 10. ADDITIONAL COVENANTS
10.1 FURTHER ASSURANCES. From time to time, at the other party's
reasonable request, and without additional consideration, each party shall
execute and deliver, or cause to be executed and delivered, such additional
transfers, assignments, endorsements, proxies, consents and other instruments,
and shall take such further actions, for the purpose of carrying out and
furthering the intent of this Stockholder Agreement; provided, however, that
nothing herein shall obligate Stockholder to take any action that would cause
Stockholder to violate or breach the General Shareholders Agreement. Stockholder
shall, upon the request of Parent, execute and deliver such documents as are
necessary to terminate the General Shareholders Agreement and the Continuing
Shareholders Agreement and shall act reasonably and in good faith to execute and
deliver mutual releases with the Company pursuant to which the Company releases
Stockholder of all of its obligations under, and Stockholder releases the
Company of all of its obligations under, the General Shareholders Agreement and
the Continuing Shareholders Agreement.
10.2 LEGEND. Immediately after the execution of this Stockholder
Agreement (and from time to time upon the acquisition by Stockholder of
Ownership of any shares of Company Common Stock prior to the Expiration Date),
Stockholder shall ensure that each certificate evidencing any outstanding shares
of Company Common Stock or other securities of the Company Owned by Stockholder
bears a legend in the following form:
THE SECURITY OR SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, EXCHANGED OR OTHERWISE TRANSFERRED OR
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DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE
STOCKHOLDER AGREEMENT DATED AS OF MAY 24, 2000, BETWEEN THE ISSUER AND
_____________, AS IT MAY BE AMENDED, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
SECTION 11. MISCELLANEOUS
11.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties, covenants and agreements made by Stockholder in
this Stockholder Agreement shall terminate on the Expiration Date; provided,
however, that nothing set forth in this Stockholder Agreement shall relieve any
party from liability or damages resulting from a breach of this Stockholder
Agreement occurring prior to the Expiration Date.
11.2 ACTIONS AS DIRECTOR. [ONLY APPLICABLE TO STOCKHOLDERS WHO ARE
DIRECTORS]. The restrictions and covenants contained in this Stockholder
Agreement apply to Stockholder only in his capacity as a stockholder of the
Company and not in his capacity as a director of the Company.
11.3 NONINTERFERENCE. Stockholder shall ensure that no action is taken
by it (and shall use its best efforts (and shall take all action within its
control) to ensure that no action is taken by the Company) that interferes (or
could interfere) in any material respect with Purchaser's ability to exercise
the First Option or the Second Option or that diminishes (or that could
diminish) in any material respect the rights or benefits provided to Purchaser
under this Stockholder Agreement.
11.4 EXPENSES. All costs and expenses incurred in connection with the
transactions contemplated by this Stockholder Agreement shall be paid by the
party incurring such costs and expenses.
11.5 NOTICES. Any notice or other communication required or permitted to
be delivered to either party under this Stockholder Agreement shall be in
writing and shall be deemed properly delivered, given and received (a) when
delivered by hand, or (b) two business days after mailed by registered mail, by
courier or express delivery service or sent by facsimile, to the address or
facsimile telephone number set forth beneath the name of such party below (or to
such other address or facsimile telephone number as such party shall have
specified in a written notice given to the other party):
if to Stockholder:
at the address set forth below Stockholder's signature on
the signature page hereof
if to Parent or Purchaser:
Xxxxxx Pharmaceuticals, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
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Attn: General Counsel
Fax: (000) 000-0000
11.6 SEVERABILITY. If any provision of this Stockholder Agreement or any
part of any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Stockholder Agreement.
Each provision of this Stockholder Agreement is separable from every other
provision of this Stockholder Agreement, and each part of each provision of this
Stockholder Agreement is separable from every other part of such provision.
11.7 ENTIRE AGREEMENT. This Stockholder Agreement, the Irrevocable Proxy
and any other documents delivered by the parties in connection herewith
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings
between the parties with respect thereto. No addition to or modification of any
provision of this Stockholder Agreement shall be binding upon either party
unless made in writing and signed by both parties.
11.8 ASSIGNMENT; BINDING EFFECT. Except as provided herein, neither this
Stockholder Agreement nor any of the interests or obligations hereunder may be
assigned or delegated by any party and any attempted or purported assignment or
delegation of any of such interests or obligations shall be void. Subject to the
preceding sentence, this Stockholder Agreement shall be binding upon Stockholder
and his heirs, estate, executors, personal representatives, successors and
assigns, and shall inure to the benefit of Parent and its successors and
assigns. Without limiting any of the restrictions set forth in Section 2 or
elsewhere in this Stockholder Agreement, this Stockholder Agreement shall be
binding upon any Person to whom any securities of the Company Owned by
Stockholder at any time are transferred. Nothing in this Stockholder Agreement
is intended to confer on any Person (other than Parent and its successors and
assigns) any rights or remedies of any nature.
11.9 SPECIFIC PERFORMANCE. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Stockholder
Agreement or the Irrevocable Proxy was not performed in accordance with its
specific terms or was otherwise breached. The parties hereto agrees that, in the
event of any breach or threatened breach by Stockholder of any covenant or
obligation contained in this Stockholder Agreement or in the Irrevocable Proxy,
the other Parties hereto shall be entitled (in addition to any other remedy that
may be available to it, including monetary damages) to seek and obtain (a) a
decree or order of specific performance to enforce the observance and
performance of such covenant or obligation, and (b) an injunction restraining
such breach or threatened breach. The Parties hereto further agrees that none of
the Parties hereto shall be required to obtain, furnish or post any bond or
similar instrument in connection with or as a condition to obtaining any remedy
referred to in this Section 11.9, and
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Stockholder irrevocably waives any right he may have to require the obtaining,
furnishing or posting of any such bond or similar instrument.
11.10 NON-EXCLUSIVITY. The rights and remedies of any Party under this
Stockholder Agreement are not exclusive of or limited by any other rights or
remedies which it may have, whether at law, in equity, by contract or otherwise,
all of which shall be cumulative (and not alternative). Without limiting the
generality of the foregoing, the rights and remedies of any Party under this
Stockholder Agreement are in addition to their respective rights, remedies,
obligations and liabilities under common law requirements and under all
applicable statutes, rules and regulations.
11.11 GOVERNING LAW. This Stockholder Agreement and the Irrevocable
Proxy shall be construed in accordance with, and governed in all respects by,
the laws of the State of Delaware (without giving effect to principles of
conflicts of laws). EACH PARTY TO THIS STOCKHOLDER AGREEMENT IRREVOCABLY WAIVES
THE RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO
THIS STOCKHOLDER AGREEMENT OR THE IRREVOCABLE PROXY OR THE ENFORCEMENT OF ANY
PROVISION OF THIS STOCKHOLDER AGREEMENT OR THE IRREVOCABLE PROXY.
11.12 COUNTERPARTS. This Stockholder Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
11.13 CAPTIONS. The captions contained in this Stockholder Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Stockholder Agreement and shall not be referred to in connection with the
construction or interpretation of this Stockholder Agreement.
11.14 ATTORNEYS' FEES. If any legal action or other legal proceeding
relating to this Stockholder Agreement or the enforcement of any provision of
this Stockholder Agreement is brought against any Party to this Stockholder
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees, costs and disbursements (in addition to any other relief to
which the prevailing party may be entitled).
11.15 WAIVER. No failure on the part of any Party to this Stockholder
Agreement to exercise any power, right, privilege or remedy under this
Stockholder Agreement, and no delay on the part of any Party to this Stockholder
Agreement in exercising any power, right, privilege or remedy under this
Stockholder Agreement, shall operate as a waiver of such power, right, privilege
or remedy; and no single or partial exercise of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy. No Party to this Stockholder Agreement shall
not be deemed to have waived any claim available to him or if arising out of
this Stockholder Agreement, or any power, right, privilege or remedy available
to him or if under this Stockholder Agreement, unless the waiver of such claim,
power, right, privilege or remedy is expressly set forth in a written instrument
duly executed and delivered on his or its behalf; and any such waiver shall not
be applicable or have any effect except in the specific instance in which it is
given.
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11.16 CONSTRUCTION.
(a) For purposes of this Stockholder Agreement, whenever the
context requires: the singular number shall include the plural, and vice versa;
the masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include masculine and feminine genders.
(b) The parties agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Stockholder Agreement.
(c) As used in this Stockholder Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Stockholder Agreement to "Schedule", "Sections" and "Exhibits" are intended to
refer to Schedule to this Stockholder Agreement, Sections of this Stockholder
Agreement and Exhibits to this Stockholder Agreement.
11.17 TERMINATION. Notwithstanding any other provision of this
Stockholder Agreement to the contrary, in the event of the termination of the
Merger Agreement for any reason other than a termination (A) pursuant to Section
9.01(d), 9.01(e)(i) or 9.01(e)(ii)(B) of Article IX of the Merger Agreement; (B)
by Parent pursuant to Section 9.01(c) of the Merger Agreement; (C) by the
Company pursuant to Section 9.01(c) of the Merger Agreement after an Acquisition
Proposal has been disclosed, announced, commenced, submitted or made; (D)
pursuant to Section 9.01(f) of the Merger Agreement if (1) an Acquisition
Proposal has disclosed, announced, commenced, submitted or made and (2) the
Offer has expired without any Shares having been purchased pursuant to the
Offer; or (E) pursuant to Section 9.01(f) of the Merger Agreement in the
circumstances described in paragraphs (f), (h) (as it relates to Section 6.01),
(i) or (j) of Annex A to the Merger Agreement, this Agreement shall forthwith
terminate and shall become void and there shall be no liability on the part of
any party hereto (or any of its affiliates, directors, officers, employees,
agents, legal and financial advisors or other representatives); provided,
however, that (A) nothing set forth in this Stockholder Agreement shall diminish
or otherwise adversely affect any rights, benefits or remedies of Parent or
Purchaser that have vested, accrued or otherwise become available prior to such
termination, including Purchaser's right to exercise the First Option or the
Second Option to the extent either of them have become exercisable prior to such
termination, and (B) nothing set forth in this Stockholder Agreement shall
relieve any party from liability or damages resulting from any breach of this
Agreement.
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IN WITNESS WHEREOF, Parent, Purchaser and Stockholder have caused this
Stockholder Agreement to be executed as of the date first written above.
XXXXXX PHARMACEUTICALS, INC.
By:
---------------------------------
Its:
WS ACQUISITION CORP.:
By:
---------------------------------
Its:
--------------------------------
STOCKHOLDER
By:
---------------------------------
Name:
-------------------------------
Address:
----------------------------
----------------------------
----------------------------
Facsimile:
--------------------------
ADDITIONAL SECURITIES
SHARES HELD OF RECORD OPTIONS AND OTHER RIGHTS BENEFICIALLY OWNED
--------------------- ------------------------ ------------------
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EXHIBIT A
FORM OF IRREVOCABLE PROXY
The undersigned stockholder of Schein Pharmaceutical, Inc., a Delaware
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Xxxxx Xxxx, Xxxx Xxxxxxxxx and Xxxxxx
Pharmaceuticals, Inc., a Nevada corporation ("Parent"), and each of them, the
attorneys and proxies of the undersigned with full power of substitution and
resubstitution, to the full extent of the undersigned's rights with respect to
forty-six and nine-tenths percent of (i) the outstanding shares of capital stock
of the Company owned of record by the undersigned as of the date of this proxy,
and (ii) any and all other shares of capital stock of the Company which the
undersigned may acquire on or after the date hereof. (The shares of the capital
stock of the Company referred to in clauses "(i)" and "(ii)" of the immediately
preceding sentence are collectively referred to as the "Shares.") Upon the
execution hereof, all prior proxies given by the undersigned with respect to any
of the Shares are hereby revoked, and the undersigned agrees that no subsequent
proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted in
connection with the Stockholder Agreement, dated as of the date hereof, between
Parent, WS Acquisition Corp., a Delaware corporation ("Purchaser") and the
undersigned (the "Stockholder Agreement"), and is granted in consideration of
Parent and Purchaser entering into the Agreement and Plan of Merger, dated as of
the date hereof, among Parent, Purchaser and the Company (the "Merger
Agreement").
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the Expiration Date
(as defined in the Stockholder Agreement) at any meeting of the stockholders of
the Company, however called, or in connection with any solicitation of written
consents from stockholders of the Company:
(i) in favor of the approval and adoption of the Merger Agreement and
the approval of the Merger, and in favor of each of the other actions
contemplated by the Merger Agreement as necessary for the consummation of the
Merger;
(ii) against any action or agreement that would result in a breach of
any representation, warranty, covenant or obligation of the Company in the
Merger Agreement; and
(iii) except as otherwise agreed to in writing in advance by Parent in
its sole discretion, against the following actions (other than the Merger and
the transactions contemplated by the Merger Agreement): (A) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving the Company or any subsidiary of the Company; (B) any
sale, lease or transfer of a material amount of assets of the Company or any
subsidiary of the Company; (C) any reorganization, recapitalization, dissolution
or liquidation of the Company or any subsidiary of the Company; (D) except as
permitted by Section 1.03 of the Merger Agreement, any change in a majority of
the board of directors of the Company; (E) except as permitted by Section 2.04
of the Merger Agreement, any amendment to the Company's certificate of
incorporation; (F) any change in the capitalization of the Company or the
Company's corporate structure; or (G) any other action which is intended, or
could reasonably be expected to, impede, interfere with, delay, postpone,
discourage or adversely
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affect the contemplated economic benefits to Parent of the Merger or any of the
other transactions contemplated by the Merger Agreement or the Stockholder
Agreement.
The undersigned may vote the Shares on all other matters.
This proxy shall be binding upon the heirs, estate, executors, personal
representatives, successors and assigns of the undersigned (including any
transferee of any of the Shares).
If any provision of this proxy or any part of any such provision is held
under any circumstances to be invalid or unenforceable in any jurisdiction, then
(a) such provision or part thereof shall, with respect to such circumstances and
in such jurisdiction, be deemed amended to conform to applicable laws so as to
be valid and enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (c) the invalidity or unenforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
proxy. Each provision of this proxy is separable from every other provision of
this proxy, and each part of each provision of this proxy is separable from
every other part of such provision.
This proxy shall terminate upon the Expiration Date.
Dated: ________, 2000.
------------------------------------
Name
Number of shares of common
stock of the Company owned of
record as of the date of this
proxy:
------------------------------------
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EXHIBIT B
FORM OF IRREVOCABLE PROXY
The undersigned stockholder of Schein Pharmaceutical, Inc., a Delaware
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Xxxxx Xxxx, Xxxx Xxxxxxxxx and Xxxxxx
Pharmaceuticals, Inc., a Nevada corporation ("Parent"), and each of them, the
attorneys and proxies of the undersigned with full power of substitution and
resubstitution, to the full extent of the undersigned's rights with respect to
(i) the outstanding shares of capital stock of the Company owned of record by
the undersigned as of the date of this proxy, which shares are specified on the
final page of this proxy, and (ii) any and all other shares of capital stock of
the Company which the undersigned may acquire on or after the date hereof. (The
shares of the capital stock of the Company referred to in clauses "(i)" and
"(ii)" of the immediately preceding sentence are collectively referred to as the
"Shares.") Upon the execution hereof, all prior proxies given by the undersigned
with respect to any of the Shares are hereby revoked, and the undersigned agrees
that no subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted in
connection with the Stockholder Agreement, dated as of the date hereof, between
Parent, WS Acquisition Corp., a Delaware corporation ( "Purchaser") and the
undersigned (the "Stockholder Agreement"), and is granted in consideration of
Parent and Purchaser entering into the Agreement and Plan of Merger, dated as of
the date hereof, among Parent, Purchaser and the Company (the "Merger
Agreement").
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the one year
anniversary of a Second Option Triggering Event (as defined in the Stockholder
Agreement) at any meeting of the stockholders of the Company, however called, or
in connection with any solicitation of written consents from stockholders of the
Company:
(i) in favor of the approval and adoption of the Merger Agreement
and the approval of the Merger, and in favor of each of the other
actions contemplated by the Merger Agreement as necessary for the
consummation of the Merger;
(ii) against any action or agreement that would result in a breach
of any representation, warranty, covenant or obligation of the Company
in the Merger Agreement; and
(iii) except as otherwise agreed to in writing in advance by Parent
in its sole discretion, against the following actions (other than the
Merger and the transactions contemplated by the Merger Agreement): (A)
any extraordinary corporate transaction, such as a merger, consolidation
or other business combination involving the Company or any subsidiary of
the Company; (B) any sale, lease or transfer of a material amount of
assets of the Company or any subsidiary of the Company; (C) any
reorganization, recapitalization, dissolution or liquidation of the
Company or any subsidiary of the Company; (D) except as permitted by
Section 1.03 of the Merger Agreement, any change in a majority of the
board of directors of the Company; (E) except as permitted by
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Section 2.04 of the Merger Agreement, any amendment to the Company's
certificate of incorporation; (F) any change in the capitalization of
the Company or the Company's corporate structure; or (G) any other
action which is intended, or could reasonably be expected to, impede,
interfere with, delay, postpone, discourage or adversely affect the
contemplated economic benefits to Parent of the Merger or any of the
other transactions contemplated by the Merger Agreement or the
Stockholder Agreement., in favor of the approval and adoption of the
Merger Agreement and the approval of the Merger, and in favor of each of
the other actions contemplated by the Merger Agreement as necessary for
the consummation of the Merger.
The undersigned may vote the Shares on all other matters.
This proxy shall be binding upon the heirs, estate, executors, personal
representatives, successors and assigns of the undersigned (including any
transferee of any of the Shares).
If any provision of this proxy or any part of any such provision is held
under any circumstances to be invalid or unenforceable in any jurisdiction, then
(a) such provision or part thereof shall, with respect to such circumstances and
in such jurisdiction, be deemed amended to conform to applicable laws so as to
be valid and enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (c) the invalidity or unenforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
proxy. Each provision of this proxy is separable from every other provision of
this proxy, and each part of each provision of this proxy is separable from
every other part of such provision.
This proxy shall terminate one year after the date on which a Second
Option Triggering Event shall have occurred.
Dated: ________, 2000.
------------------------------------
Name
Number of shares of common stock of the
Company owned of record as of the date of
this proxy: __________________________
