EXHIBIT 2
VOTING AGREEMENT
This Voting Agreement, dated as of November 29, 1996, is entered into by
and between FOUNDATION HEALTH CORPORATION, a Delaware corporation ("FHC"), and
FPA MEDICAL MANAGEMENT, INC., a Delaware corporation ("FPA").
W I T N E S S E T H
WHEREAS, pursuant to that certain Stock and Note Purchase Agreement (the
"Purchase Agreement"), dated as of June 28, 1996, by and among FHC, FPA and the
other parties listed therein, FHC acquired 4,076,087 shares (the "Shares") of
the common stock of FPA;
WHEREAS, FHC and FPA desire to enter into an agreement governing the manner
in which FHC may vote the Shares with respect to certain matters;
NOW THEREFORE, in consideration of the terms, conditions and covenants
contained herein and in the Purchase Agreement, the parties hereto hereby agree
as follows (capitalized terms not otherwise defined herein shall have the
meaning set forth in the Purchase Agreement):
1. VOTING. FHC agrees to vote the Shares in accordance with the
recommendation of the Board of Directors of FPA (the "Board") as to all matters
with respect to which the Board makes a recommendation, PROVIDED, HOWEVER, that
FHC may vote the Shares in any manner it chooses and in its sole and absolute
discretion with respect to Excluded Matters (as defined in SECTION 2 hereof).
2. EXCLUDED MATTERS. Notwithstanding anything else contained herein,
FHC shall have the right to vote the Shares in any manner it sees fit, and in
its sole and absolute discretion, regardless of any recommendation made by the
Board, with respect to the following matters:
a. Any sale, lease, assignment, transfer or other conveyance of all
or substantially all of the assets or capital stock of FPA, or any
consolidation or merger involving FPA, or any reclassification or other
change of any stock, or any recapitalization of FPA; and
b. Any amendment of the Certificate of Incorporation or By-laws of
FPA if such amendment would change any of the rights, preferences or
privileges of the FPA Common Stock.
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The foregoing matters shall be referred to herein as "Excluded Matters."
3. ABEYANCE. Notwithstanding anything else contained herein, FHC shall
have the right to vote the Shares in any manner it sees fit and in its sole and
absolute discretion, regardless of any recommendation made by the Board and
shall have no obligations hereunder, upon the occurrence and during the
continuation of any of the following:
a. Any material breach by FPA or any of its Affiliates under the
Purchase Agreement or any of the Related Agreements;
b. Any material breach by FPA or any of its Affiliates under the
Master Lease Assignment and Master Lease Agreement dated as of the date
hereof;
c. Any failure by FPA or any of its Affiliates to make any payments
to FHC when due, including payments under the Secured Promissory Note dated
as of the date hereof, the Secured Consolidated Promissory Note dated as of
the date hereof, or Section 10.7 or Article 11 of the Purchase Agreement,
but excluding any failure which is cured by FPA or any of its Affiliates by
its exercise of offset rights set forth in such agreement or the Purchase
Agreement.
4. TERMINATION. This Agreement shall terminate at such time as the
number of Shares held by FHC is less than 500,000
(taking into account any stock splits, reverse stock splits and dividends and
recapitalizations with respect to FPA Common Stock following the date hereof),
unless sooner agreed by the parties hereto. This Agreement shall not be
applicable with respect to any Shares transferred by FHC to any person except
Affiliates of FHC; provided, however, that transfers by FHC to any company in
the health services industry which result in such company owning 500,000 or more
shares of FPA Common Stock shall not be effected by FHC without the prior
written consent of FPA or FHC's obtaining the written agreement by such
transferee to be bound to the terms of this Agreement.
5. GOVERNING LAW. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Delaware as applied to
contracts entered into solely between residents of, and to be performed entirely
in, such state.
6. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first above written.
FOUNDATION HEALTH CORPORATION
By __________________________
Title _______________________
FPA MEDICAL MANAGEMENT, INC.
By __________________________
Title _______________________
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