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EXHIBIT 2
HEALTH CARE AND RETIREMENT CORPORATION
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of June 10, 1998 (the "Agreement"),
between Health Care and Retirement Corporation, a Delaware corporation (the
"Grantee"), and Manor Care, Inc., a Delaware corporation (the "Grantor").
WHEREAS, the Grantee, Catera Acquisition Corp., a Delaware corporation
("Sub"), and the Grantor have entered into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), which provides, among
other things, for the merger (the "Merger") of Sub with and into the Grantor
such that the Grantor will become a wholly-owned subsidiary of Grantee and the
stockholders of the Grantor will become stockholders of Grantee;
WHEREAS, as a condition and inducement to their willingness to enter into
the Merger Agreement, the Grantee and Sub requested that the Grantor grant to
the Grantee an option to purchase up to 12,675,421 (subject to adjustment as
set forth herein) shares of Common Stock, par value $.10 per share, of the
Grantor (the "Common Stock"), upon the terms and subject to the conditions
hereof;
WHEREAS, prior to the date hereof, Grantee and the Holders (as defined in
the Voting Agreement dated the date hereof among the Holders party thereto,
Grantor and the Grantee (the "Voting Agreement")) had no agreement, arrangement
or understanding (as such terms are used in Section 203 of the Delaware General
Corporation Law (the "DGCL")) for the purpose of acquiring, holding, voting or
disposing of shares of Common Stock;
WHEREAS, in consideration for the agreements contained herein, prior to
the date hereof, and prior to Grantee becoming an "interested stockholder" for
purposes of Section 203 of the DGCL, the board of the directors of Grantor has
approved this Agreement and the Voting Agreement, and the transactions,
agreements, arrangements and understandings contemplated hereby and thereby,
including the agreement of the Holders to vote as provided in Section 2 of the
Voting Agreement and not to transfer shares of Common Stock as provided in
Section 5(B) of the Voting Agreement and the option to purchase Common Stock as
provided in this Agreement; and
WHEREAS, in order to induce the Grantee to enter into the Merger
Agreement, the Grantor hereby agrees to grant the Grantee the requested option.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
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1. The Option; Exercise; Adjustments; Payment of Spread.
(a) Immediately prior hereto the Grantee, Sub and the Grantor are
entering into the Merger Agreement. Subject to the other terms and conditions
set forth herein, the Grantor hereby grants to the Grantee an irrevocable
option (the "Option") to purchase up to 12,675,421 (as adjusted as provided
herein) shares of Common Stock (together with the associated purchase rights
(the "Rights") issued with respect thereto pursuant to the Rights Agreement
dated February 25, 1998, as amended, between the Grantor and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Grantor Rights Plan")
(including the Rights, the "Shares") at a per share cash purchase price equal
to the lower of (i) $31.00 per Share and (ii) the average closing sales price
of the Common Stock on the New York Stock Exchange ("NYSE") for the five
consecutive trading days beginning on and including the day that the Merger is
publicly announced (as adjusted as provided herein) (such lower price being the
"Purchase Price"). The Option may be exercised by the Grantee, in whole but not
in part, at any time, following the occurrence of a Purchase Event (as defined)
and prior to the termination of the Option in accordance with the terms of this
Agreement. A Purchase Event shall be the earliest of: (i) termination of the
Merger Agreement by Grantee pursuant to Section 9.1(d) of the Merger Agreement,
but only if a proposal for an Alternative Transaction (as defined in the Merger
Agreement) involving Grantor shall have been made prior to the Grantor
stockholders' meeting and either an Alternative Transaction with Grantor is
entered into, or an Alternative Transaction with Grantor is consummated, within
eighteen months of such termination (or twelve months in the case of the
Restructuring Transaction), (ii) the termination of the Merger Agreement by
Grantee pursuant to Section 9.1(f) of the Merger Agreement, or (iii) the
termination of the Merger Agreement by Grantor pursuant to Section 9.1(h) of
the Merger Agreement.
(b) In the event the Grantee wishes to exercise the Option, the Grantee
shall send a written notice to the Grantor (the "Stock Exercise Notice")
specifying a date not later than 10 business days and not earlier than the
second business day following the date such notice is sent for the closing of
such purchase, subject to extension until such date as the conditions specified
in Section 2 are satisfied. In the event of any change in the number of issued
and outstanding shares of Common Stock by reason of any stock dividend, stock
split, split-up, reclassification, recapitalization, merger or other change in
the corporate or capital structure of the Grantor (including the occurrence of
a Distribution Date under the Grantor Rights Plan), the number of Shares
subject to this Option and the purchase price per Share shall be appropriately
adjusted to restore the Grantee to its rights hereunder, including its right to
purchase Shares representing 19.9% of the capital stock of the Grantor entitled
to vote generally for the election of the directors of the Grantor which is
issued and outstanding immediately prior to the exercise of the Option at a per
share purchase price equal to the Purchase Price multiplied by 12,675,421. In
the event that any additional shares of Common Stock are issued after the date
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of this Agreement (other than pursuant to an event described in the preceding
sentence), the number of Shares subject to this Option shall be increased by
19.9% of the number of the additional shares of Common Stock so issued (and
such additional Shares shall have a purchase price per share equal to the
Purchase Price).
(c) If at any time the Option is then exercisable pursuant to the terms
of Section 1(a) hereof, the Grantee may elect, in lieu of exercising the Option
to purchase Shares provided in Section 1(a) hereof, to send a written notice to
the Grantor (the "Cash Exercise Notice") specifying a date not later than 20
business days and not earlier than 10 business days following the date such
notice is sent on which date the Grantor shall pay to the Grantee an amount in
cash equal to the Spread (as hereinafter defined) multiplied by such number of
the Shares subject to the Option. As used herein "Spread" shall mean the
excess, if any, over the Purchase Price of the higher of (x) if applicable, the
highest price per share of Common Stock (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by any person in an
Alternative Transaction (as defined in Section 9.03(g) of the Merger Agreement)
(the "Alternative Purchase Price") or (y) the closing sales price per share of
Common Stock on the NYSE on the last trading day immediately prior to the date
the Cash Exercise Notice is sent (the "Closing Price"). If the Alternative
Purchase Price includes any property other than cash, the Alternative Purchase
Price shall be the sum of (i) the fixed cash amount, if any, included in the
Alternative Purchase Price plus (ii) the fair market value of such other
property. If such other property consists of securities with an existing
public trading market, the average of the closing sales prices (or the average
of the closing bid and asked prices if closing sales prices are unavailable)
for such securities in their principal public trading market on the five
trading days ending five days prior to the date of sending of the Cash Exercise
Notice shall be deemed to equal the fair market value of such property. If
such other property consists of something other than cash or securities with an
existing public trading market and, as of the payment date for the Spread,
agreement on the value of such other property has not been reached, the
Alternative Purchase Price shall be deemed to equal the Closing Price. Upon
exercise of the Grantee's right to receive cash pursuant to this Section 1(c)
and the payment of such cash to the Grantee, the obligations of the Grantor to
deliver Shares pursuant to Section 3 shall be terminated.
2. Conditions to Delivery of Shares. The Grantor's obligation to deliver
Shares upon exercise of the Option is subject only to the conditions that:
(a) No preliminary or permanent injunction or other order issued by any
federal or state court of competent jurisdiction in the United States
prohibiting the delivery of the Shares shall be in effect; and
(b) Any applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx") shall have expired or been
terminated and
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all other consents, approvals, orders, notifications or authorizations, the
failure of which to obtain or make would have the effect of making the issuance
of the Shares illegal (collectively, the "Regulatory Approvals") shall have
been obtained or made.
3. The Closing.
(a) Any closing hereunder shall take place on the date specified by the
Grantee in its Stock Exercise Notice or Cash Exercise Notice, as the case may
be, at 8:00 A.M., local time, at the offices of Xxxxxx & Xxxxxxx, Suite 5800,
Sears Tower, 000 Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, or, if the conditions
set forth in Section 2(a) or 2(b) have not then been satisfied, on the second
business day following the satisfaction of such conditions, or at such other
time and place as the parties hereto may agree (the "Closing Date"). On the
Closing Date, (i) in the event of a closing pursuant to Section 1(b) hereof,
the Grantor will deliver to the Grantee a certificate or certificates, duly
endorsed, representing the Shares in the denominations designated by the
Grantee in its Stock Exercise Notice and the Grantee will purchase such Shares
from the Grantor at the price per Share equal to the Purchase Price or (ii) in
the event of a closing pursuant to Section 1(c) hereof, the Grantor will
deliver to the Grantee cash in an amount determined pursuant to Section 1(c)
hereof. Any payment made by the Grantee to the Grantor, or by the Grantor to
the Grantee, pursuant to this Agreement shall be made by certified or official
bank check or by wire transfer of federal funds to a bank designated by the
party receiving such funds.
(b) The certificates representing the Shares may bear an appropriate
legend relating to the fact that such Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act").
4. Representations And Warranties of the Grantor. The Grantor represents
and warrants to the Grantee that (a) the Grantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to enter into and
perform this Agreement; (b) the execution and delivery of this Agreement by the
Grantor and the consummation by it of the transactions contemplated hereby have
been duly authorized by the Board of Directors of the Grantor and this
Agreement has been duly executed and delivered by a duly authorized officer of
the Grantor and constitutes a valid and binding obligation of the Grantor,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; (c) the Grantor has taken all necessary corporate action to
authorize and reserve the Shares issuable upon exercise of the Option and the
Shares, when issued and delivered by the Grantor upon exercise of the Option,
will be duly authorized, validly issued, fully paid and non-assessable and free
of preemptive rights and any and all liens, claims, charges or encumbrances;
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(d) except as otherwise required by the HSR Act and other than any filings
required under the blue sky laws of any states or by the NYSE, the execution
and delivery of this Agreement by the Grantor and the issuance of Shares upon
exercise of the Option do not require the consent, waiver, approval or
authorization of or any filing with any person or public authority and will not
violate, result in a breach of or the acceleration of any obligation under, or
constitute a material default under, any provision of any charter or by-law,
material indenture, mortgage, lien, lease, agreement, contract or instrument,
or any order, law, rule, regulation, judgment, ordinance, or decree, or
restriction by which the Grantor or any of its subsidiaries or any of their
respective properties or assets is bound; (e) no "fair price", "moratorium",
"control share acquisition" or other similar antitakeover statute or regulation
(including, without limitation, the restrictions on "business combinations" set
forth in Section 203 of the DGCL) is or shall be applicable to the acquisition
of Shares pursuant to this Agreement (and the Board of Directors of Grantor has
taken all action to approve the acquisition of the Shares to the extent
necessary to avoid such application) and (f) the Grantor has taken all
corporate action necessary so that the grant and any subsequent exercise of the
Option by the Grantee will not result in the separation or exercisability of
rights under the Grantor Rights Plan.
5. Representations and Warranties of the Grantee. The Grantee represents
and warrants to the Grantor that (a) the execution and delivery of this
Agreement by the Grantee and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Grantee and this Agreement has been duly executed and
delivered by a duly authorized officer of the Grantee and will constitute a
valid and binding obligation of Grantee enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and (b) the Grantee is
acquiring the Option after the Grantee has been afforded the opportunity to
obtain, and has obtained, sufficient information regarding the Grantor to make
an informed investment decision with respect to the Grantee's purchase of the
Shares issuable upon exercise thereof, and, if and when the Grantee exercises
the Option, it will be acquiring the Shares issuable upon the exercise thereof
for its own account and not with a view to distribution or resale in any manner
which would be in violation of the Securities Act.
6. Quotation of Shares; HSR Act Filings; Regulatory Approvals. Subject to
applicable law and the rules and regulations of the NYSE, the Grantor will
promptly following receipt of a Stock Exercise Notice file an application to
have the Shares quoted on the NYSE and will use its best efforts to obtain
approval of such quotation and to file all necessary filings by the Grantor
under the HSR Act; provided, however, that if the Grantor is unable to effect
such quotation on the NYSE by the Closing Date, the Grantor will nevertheless
be obligated to deliver the Shares upon the Closing Date. Each of the parties
hereto will use its best efforts to obtain
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consents of all third parties and all Regulatory Approvals, if any, necessary
to the consummation of the transactions contemplated hereby.
7. Repurchase of Shares; Sale of Shares. If an Alternate Transaction has
not occurred prior to the eighteen (18) month (twelve (12) months in the case
of the Restructuring Transactions) anniversary date of the date on which the
Merger Agreement terminated pursuant to the terms thereof, then beginning on
such anniversary date, the Grantor shall, subject to there being legally
available funds therefor, have the right to purchase (the "Repurchase Right")
all, but not less than all, of the Shares then beneficially owned by the
Grantee or any of its affiliates at a price per share equal to the greater of
(i) the Purchase Price, or (ii) the average of the closing sales prices for
shares of Common Stock on the twenty trading days ending five days prior to the
date the Grantor gives written notice of its intention to exercise the
Repurchase Right. If the Grantor does not exercise the Repurchase Right within
ninety days following the first anniversary of the date of termination of the
Merger Agreement, the Repurchase Right terminates. In the event the Grantor
wishes to exercise the Repurchase Right, the Grantor shall send a written
notice to the Grantee specifying a date (not later than 10 business days and
not earlier than the second business day following the date such notice is
sent) for the closing of such purchase. For purposes of the Agreement, an
"Alternative Transaction" shall have the meaning ascribed to in such term in
the Merger Agreement.
8. Registration Rights.
(a) In the event that the Grantee shall desire to sell any of the
Shares within two years after the purchase of such Shares pursuant to the terms
hereof, and such sale requires, in the opinion of counsel to the Grantee, which
opinion shall be reasonably satisfactory to the Grantor and its counsel,
registration of such Shares under the Securities Act, the Grantor will
cooperate with the Grantee and any underwriters in registering such Shares for
resale, including, without limitation, promptly filing a registration statement
which complies with the requirements of applicable federal and state securities
laws, entering into an underwriting agreement with such underwriters upon such
terms and conditions as are customarily contained in underwriting agreements
with respect to secondary distributions; provided that the Grantor shall not be
required to have declared effective more than two registration statements
hereunder and shall be entitled to delay the filing or effectiveness of any
registration statement for no more than 120 days in the aggregate if the
offering would, in the judgment of the Board of Directors of the Grantor, after
consultation with the Grantor's principal securities counsel, require
disclosure of any material information that the Grantor has a bona fide
business purpose for preserving as confidential.
(b) If the Common Stock is registered pursuant to the provisions of
this Section 8, the Grantor agrees (i) to furnish copies of the registration
statement and the
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prospectus relating to the Shares covered thereby in such numbers as the
Grantee may from time to time reasonably request and (ii) if any event shall
occur as a result of which it becomes necessary to amend or supplement any
registration statement or prospectus, to prepare and file under the applicable
securities laws such amendments and supplements as may be necessary to keep
effective for at least 90 days a prospectus covering the Common Stock meeting
the requirements of such securities laws, and to furnish the Grantee such
numbers of copies of the registration statement and prospectus as amended or
supplemented as may reasonably be requested. The Grantor shall bear the cost
of the registration, including, but not limited to, all registration and filing
fees, printing expenses, and fees and disbursements of counsel and accountants
for the Grantor, except that the Grantee shall pay the fees and disbursements
of its counsel, the underwriting fees and selling commissions applicable to the
shares of Common Stock sold by the Grantee. The Grantor shall indemnify and
hold harmless the Grantee, its affiliates and its officers, directors and
controlling persons from and against any and all losses, claims, damages,
liabilities and expenses arising out of or based upon any statements contained
or incorporated by reference in, and omissions or alleged omissions from, each
registration statement filed pursuant to this paragraph; provided, however,
that this provision does not apply to any loss, liability, claim, damage or
expense to the extent it arises out of any untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Grantor by the Grantee, its affiliates and its officers expressly for use in
any registration statement (or any amendment thereto) or any preliminary
prospectus filed pursuant to this paragraph. The Grantor shall also indemnify
and hold harmless each underwriter and each person who controls any underwriter
within the meaning of either the Securities Act or the Securities Exchange Act
of 1934, as amended, against any and all losses, claims, damages, liabilities
and expenses arising out of or based upon any statements contained or
incorporated by reference in, and omissions or alleged omissions from, each
registration statement filed pursuant to this paragraph; provided, however,
that this provision does not apply to any loss, liability, claim, damage or
expense to the extent it arises out of any untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Grantor by the underwriters expressly for use in any registration statement (or
any amendment thereto) or any preliminary prospectus filed pursuant to this
paragraph.
9. Profit Limitation.
(a) Notwithstanding any other provision of this Agreement, in no event
shall the Total Profit (as hereinafter defined) exceed $100 million and, if it
does exceed such amount, the Grantee, at its sole election, shall, within five
business days, either (a) deliver to the Grantor for cancellation without
consideration Shares (valued, for the purposes of this Section 9(a), at the
average closing sales price of the Common Stock on the NYSE for the twenty
consecutive trading days preceding the day on which the Total Profit exceeds
$100 million) previously purchased by the Grantee, (b) pay cash or other
consideration to the Grantor or (c)
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undertake any combination thereof, so that the Total Profit shall not exceed
$100 million after taking into account the foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount of cash received by the
Grantee pursuant to Section 9.3(e) of the Merger Agreement and Section 1(c)
hereof, (ii)(x) the net cash amount received by the Grantee pursuant to the
Grantor's repurchase of Shares pursuant to Section 7 hereof, less (y) the
Grantee's purchase price for such Shares, and (iii)(x) the amount received by
the Grantee pursuant to the sale of Shares (or any other securities into which
such Shares are converted or exchanged), less (y) the Grantee's purchase price
for such Shares.
10. Expenses. Each party hereto shall pay its own expenses incurred in
connection with this Agreement, except as otherwise specifically provided
herein.
11. Specific Performance. The Grantor acknowledges that if the Grantor
fails to perform any of its obligations under this Agreement immediate and
irreparable harm or injury would be caused to the Grantee for which money
damages would not be an adequate remedy. In such event, the Grantor agrees
that the Grantee shall have the right, in addition to any other rights it may
have, to specific performance of this Agreement. Accordingly, if the Grantee
should institute an action or proceeding seeking specific enforcement of the
provisions hereof, the Grantor hereby waives the claim or defense that the
Grantee has an adequate remedy at law and hereby agrees not to assert in any
such action or proceeding the claim or defense that such a remedy at law
exists. The Grantor further agrees to waive any requirements for the securing
or posting of any bond in connection with obtaining any such equitable relief.
12. Notice. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given and made if in writing and if
served by personal delivery upon the party for whom it is intended or delivered
by registered or certified mail, return receipt requested, or if sent by
facsimile transmission, upon receipt of oral confirmation that such
transmission has been received, to the person at the address set forth below,
or such other address as may be designated in writing hereafter, in the same
manner, by such person:
If to the Grantee:
Health Care and Retirement Corporation
Xxx XxxXxxx
Xxxxxx, XX 00000-0000
Attn: R. Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
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With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx Xxxxx
Sears Tower, Suite 5800
Chicago, IL 60606
Attn: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
If to the Grantor:
Manor Care, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: W. Xxxxxx Xxxxx
Telecopy: (000)000-0000
13. Parties in Interest. This Agreement shall inure to the benefit of and
be binding upon the parties named herein and their respective permitted
successors and assigns; provided, however, that such successor in interest or
assigns shall agree to be bound by the provisions of this Agreement. Except as
set forth in Section 8, nothing in this Agreement, express or implied, is
intended to confer upon any person other than the Grantor or the Grantee, or
their successors or assigns, any rights or remedies under or by reason of this
Agreement.
14. Entire Agreement; Amendments. This Agreement, together with the
Merger Agreement and the other documents referred to therein, contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but may be changed
only by an agreement in writing signed by the party against whom any waiver,
change, amendment, modification or discharge may be sought.
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15. Assignment. No party to this Agreement may assign any of its rights
or obligations under this Agreement without the prior written consent of the
other party hereto, except that the Grantee may assign its rights and
obligations hereunder to any of its direct or indirect wholly owned
subsidiaries, but no such transfer shall relieve the Grantee of its obligations
hereunder if such transferee does not perform such obligations. Any assignment
made in violation of this Section 15 shall be void.
16. Headings. The section headings herein are for convenience only and
shall not affect the construction of this Agreement.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
18. Governing Law. The Laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. Any suit, action or proceeding by a party hereto with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any state or federal court of competent jurisdiction in the State
of Delaware, and each party hereto hereby submits to the exclusive jurisdiction
of such courts for the purpose of any such suit, action, proceeding or
judgment. By the execution and delivery of this Agreement, (i) Grantee
appoints The Corporation Trust Company in Wilmington, Delaware, as its agent
upon which process may be served in any such suit, action or proceeding and
(ii) Grantor appoints CSC/The United States Corporation in Wilmington,
Delaware, as its agent upon which process may be served in any such suit,
action or proceeding. Service of process upon such agent, together with notice
of such service given to a party hereto in the manner provided in Section 12
hereof, shall be deemed in every respect effective service of process upon it
in any suit, action or proceeding. Nothing herein shall in any way be deemed
to limit the ability of a party hereto to serve any such writs, process or
summonses in any other manner permitted by applicable Law. Each party hereto
hereby irrevocably waives any objections which it may now or hereafter have to
the laying of the venue of any suit, action or proceeding arising out of or
relating to this Agreement brought in any state or federal court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives
any claim that any such suit, action or proceeding brought in any such court
has been brought in any inconvenient forum. No suit, action or proceeding
against a party hereto with respect to this Agreement may be brought in any
court, domestic or foreign, or before any similar domestic or foreign authority
other than in a court of competent jurisdiction in the State of Delaware, and
each party hereto hereby irrevocably waives any right which it may otherwise
have had to bring such an action in any other court, domestic or foreign, or
before any similar domestic or foreign authority.
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19. Termination. The right to exercise the Option granted pursuant to
this Agreement shall terminate at the earlier of (i) the Effective Time (as
defined in the Merger Agreement), (ii) the date on which the Grantee realizes a
Total Profit of $100 million, (iii) the date on which the Merger Agreement is
terminated; provided that the Option is not exercisable at such time and does
not become exercisable simultaneous with such termination and (iv) 90 days
after the date the Option becomes exercisable (the date referred to in clause
(iv) being hereinafter referred to as the "Option Termination Date"); provided
that, if the Option cannot be exercised or the Shares cannot be delivered to
the Grantee upon such exercise because the conditions set forth in Section 2(a)
or Section 2(b) hereof have not yet been satisfied, the Option Termination Date
shall be extended until thirty days after such impediment to exercise has been
removed.
All representations and warranties contained in this Agreement shall
survive delivery of and payment for the Shares.
20. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
21. Public Announcement. The Grantee will consult with the Grantor and
the Grantor will consult with the Grantee before issuing any press release with
respect to the initial announcement of this Agreement, the Option or the
transactions contemplated hereby and neither party shall issue any such press
release prior to such consultation except as may be required by law.
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IN WITNESS WHEREOF, the Grantee and the Grantor have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first written above.
HEALTH CARE AND RETIREMENT CORPORATION
By: /s/ R. Xxxxxxx Xxxxxx
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Its: Vice President and General Counsel
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MANOR CARE, INC.
By: /s/ Xxxxx X. Xxxxx
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Its: Senior Vice President and General
Counsel
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