TENDER AGREEMENT AND IRREVOCABLE PROXY
THIS TENDER AGREEMENT AND IRREVOCABLE PROXY dated as of
February 27, 1997 (this "Agreement") is by and among CIGNA
CORPORATION, a Delaware corporation ("PARENT"), CHC ACQUISITION
CORP., a New Hampshire corporation and a wholly owned subsidiary
of Parent ("PURCHASER"), and XX. XXXXXX XXXXXX ("SHAREHOLDER").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution of this
Agreement, Parent, Purchaser and Healthsource, Inc., a New
Hampshire corporation (the "COMPANY"), have entered into an
Agreement and Plan of Merger (as amended from time to time, the
"MERGER AGREEMENT"), pursuant to which Purchaser has agreed,
among other things, to commence a cash tender offer (as such
tender offer may hereafter be amended from time to time, the
"OFFER") to purchase any and all shares of common stock, $0.10
par value, of the Company (the "COMPANY COMMON STOCK");
WHEREAS, as of the date hereof, Shareholder is the
record and beneficial owner of, and has the sole right to vote
and dispose of, the number of shares of Company Common Stock set
forth on the signature page hereto;
WHEREAS, as an inducement and a condition to its
entering into the Merger Agreement and incurring the obligations
set forth therein, including the Offer and the Merger, Parent has
required that Shareholder enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and
the mutual premises, representations, warranties, covenants and
agreements contained herein and in the Merger Agreement, the
parties hereto, intending to be legally bound hereby, agree as
follows:
1. Certain Definitions. Capitalized terms used and
not defined herein have the respective meanings ascribed to them
in the Merger Agreement. In addition, for purposes of this
Agreement:
"AFFILIATE" means, with respect to any specified
Person, any Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under
common control with, the Person specified. For purposes of this
Agreement, with respect to Shareholder, "AFFILIATE" shall not
include the Company and the Persons that directly, or indirectly
through one or more intermediaries, are controlled by the
Company.
"BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with
respect to any securities means having "BENEFICIAL OWNERSHIP" of
such securities (as determined pursuant to Rule 13d-3 under the
Exchange Act ), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative
counting of the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities
Beneficially Owned by all Affiliates of such Person and all other
Persons with whom such Person would constitute a "GROUP" within
the meaning of Section 13(d) of the Exchange Act and the rules
promulgated thereunder.
"OWNED SHARES" means the shares of Company Common Stock
owned by Shareholder on the date hereof, together with any other
shares of Company Common Stock, or any other securities of the
Company entitled, or which may be entitled, to vote generally in
the election of directors and any other shares of Company Common
Stock or such other securities which may hereafter be owned by
Shareholder.
"PERSON" means an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or
other entity.
"REPRESENTATIVE" means, with respect to any Person,
such Person's officers, directors, employees, agents and
representatives (including any investment banker, financial
advisor, agent, representative or expert retained by or acting on
behalf of such Person or its subsidiaries).
"TRANSFER" means, with respect to a security, the sale,
transfer, pledge, hypothecation, encumbrance, assignment or
disposition of such security or the Beneficial Ownership thereof,
the offer to make such a sale, transfer or other disposition, and
each option, agreement, arrangement or understanding, whether or
not in writing, to effect any of the foregoing. As a verb,
"TRANSFER" shall have a correlative meaning.
2. Tender of Shares. Shareholder hereby agrees to
tender (or cause the record owner thereof), pursuant to and in
accordance with the terms of the Offer, all Owned Shares.
Shareholder hereby acknowledges and agrees that Parent's and
Purchaser's obligation to accept for payment and pay for shares
of Company Common Stock in the Offer, including any Owned Shares
tendered by Shareholder, is subject to the terms and conditions
of the Offer. The parties agree that Shareholder will, for all
Owned Shares tendered by Shareholder in the Offer and accepted
for payment by Purchaser, receive a price per Owned Share equal
to $21.75, or such higher per share consideration paid to other
shareholders who have tendered into the Offer.
3. Voting of Owned Shares; Proxy. (a) Shareholder
hereby agrees that during the period commencing on the date
hereof and continuing until the earlier of (x) the consummation
of the Offer and (y) the termination of this Agreement (such
period being referred to as the "VOTING PERIOD"), at any meeting
(whether annual or special, and whether or not an adjourned or
postponed meeting) of the Company's shareholders, however called,
or in connection with any written consent of the Company's
shareholders, subject to the absence of a preliminary or
permanent injunction or other requirement under applicable law by
any United States federal, state or foreign court barring such
action, Shareholder shall vote (or cause to be voted) all Owned
Shares: (i) in favor of the Merger, the execution and delivery
by the Company of the Merger Agreement and the approval and
adoption of the Merger and the terms thereof and each of the
other actions contemplated by the Merger Agreement and this
Agreement and any actions required in furtherance thereof and
hereof; (ii) against any action or agreement that would impede,
interfere with, or prevent the Offer or the Merger; and (iii)
except as otherwise agreed to in writing in advance by Parent,
against the following actions (other than the Offer, the Merger
and the transactions contemplated by the Merger Agreement and
this Agreement): (I) any extraordinary corporate transaction,
such as a merger, consolidation or other business combination
involving the Company or any of its subsidiaries (including any
transaction contemplated by an Acquisition Proposal); (II) any
sale, lease or transfer of a material amount of the assets or
business of the Company or its subsidiaries, or any
reorganization, restructuring, recapitalization, special
dividend, dissolution, liquidation or winding up of the Company
or its subsidiaries; and (III) any change in the present
capitalization of the Company including any proposal to sell any
material equity interest in the Company or any amendment of the
Articles of Incorporation of the Company. Shareholder shall not
enter into any agreement, arrangement or understanding with any
Person the effect of which would be inconsistent or violative of
the provisions and agreements contained in this Section 3(a).
(b) IRREVOCABLE PROXY. SHAREHOLDER HEREBY GRANTS TO,
AND APPOINTS PURCHASER AND ANY DESIGNEE OF PURCHASER, EACH OF
THEM INDIVIDUALLY, SHAREHOLDER'S IRREVOCABLE (UNTIL THE
TERMINATION OF THIS AGREEMENT) PROXY AND ATTORNEY-IN-FACT (WITH
FULL POWER OF SUBSTITUTION) TO VOTE THE OWNED SHARES OF
SHAREHOLDER AS INDICATED IN SECTION 3(a) ABOVE. SHAREHOLDER
INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION OF
THIS AGREEMENT) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY
SHAREHOLDER WITH RESPECT TO SHAREHOLDER'S OWNED SHARES.
(c) Shareholder Capacity. Shareholder is making this
Agreement solely in his capacity as the owner of the Owned Shares
and not in his capacity as a director or officer, and the
agreements set forth herein shall in no way restrict Shareholder
in the exercise of his fiduciary duties as a director and officer
of the Company. Shareholder signs solely in his or her capacity
as the record and beneficial owner of the Owned Shares.
4. Restrictions on Transfer, Other Proxies; No
Solicitation. (a) Shareholder shall not, until the termination
of this Agreement, directly or indirectly: (i) except as provided
in Section 2 hereof, Transfer to any Person any or all Owned
Shares; or (ii) except as provided in Section 3(b), grant any
proxies or powers of attorney, deposit any Owned Shares into a
voting trust or enter into a voting agreement, understanding or
arrangement with respect to such Owned Shares. Notwithstanding
anything to the contrary provided in this Agreement, Shareholder
shall have the right to Transfer Owned Shares to (i) any Family
Member, (ii) the trustee or trustees of a trust solely (except
for remote contingent interests) for the benefit of Shareholder
and/or one or more Family Members, (iii) a foundation created or
established by Shareholder, (iv) a corporation of which
Shareholder and/or any Family Members owns all of the outstanding
capital stock, (v) a partnership of which Shareholder and/or any
Family Members owns all of the partnership interests, (vi) the
executor, administrator or personal representative of the estate
of Shareholder, or (vii) any guardian, trustee or conservator
appointed with respect to the assets of Shareholder; provided,
that in the case of any such Transfer, the transferee shall
execute an agreement to be bound by the terms of this Agreement,
or terms substantially identical thereto. "Family Member" shall
have the meaning ascribed to "Related Parties" under Section
672(c) of the Internal Revenue Code of 1986, as amended.
(b) Until the termination of this Agreement,
Shareholder will comply with the provisions of Section 5.5 of the
Merger Agreement to the extent applicable to Shareholder in his
capacity as a director or officer of the Company; provided, that
nothing in this Section 4(b) shall prohibit Shareholder from
taking any actions that the Company is permitted to take in
accordance with Section 5.5 of the Merger Agreement.
5. Representations and Warranties of Shareholder.
Shareholder hereby represents, warrants and covenants to Parent
and Purchaser as follows:
(a) Shareholder has all necessary power and authority
to execute and deliver this Agreement and perform his obligations
hereunder. No other proceedings or actions on the part of
Shareholder are necessary to authorize the execution, delivery or
performance of this Agreement or the consummation of the
transactions contemplated hereby.
(b) This Agreement has been duly and validly executed
and delivered by Shareholder and constitutes the valid and
binding agreement of Shareholder, enforceable against Shareholder
in accordance with its terms except (i) to the extent limited by
applicable bankruptcy, insolvency or similar laws affecting
creditors rights and (ii) the remedy of specified performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(c) Shareholder is the record holder and beneficial
owner of the Owned Shares which, as of the date hereof, are set
forth on the signature page hereto. Shareholder has good and
marketable title to all of the Owned Shares, free and clear of
all liens, claims, options, proxies, voting agreements, security
interests, charges and encumbrances. The Owned Shares constitute
all of the capital stock of the Company Beneficially Owned by
Shareholder, and except for the Owned Shares and shares of
Company Common Stock issuable upon exercise of options held by
Shareholder, neither Shareholder nor any of his Affiliates
Beneficially Owns or has any right to acquire (whether currently,
upon lapse of time, following the satisfaction of any conditions,
upon the occurrence of any event or any combination of the
foregoing) any shares of Company Common Stock or any securities
convertible into Company Common Stock. Except as provided in
Section 3(b) hereof and in this Section 5(c), Shareholder has
sole power to vote and to dispose of the Owned Shares.
(d) Except for the items disclosed in clauses (a)
through (f) in Section 3.4 of the Merger Agreement, none of the
execution and delivery of this Agreement by Shareholder, the
consummation by Shareholder of the transactions contemplated
hereby or compliance by Shareholder with any of the provisions
hereof shall (A) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, loan agreement,
bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or
obligation of any kind to which Shareholder is a party or by
which Shareholder or any of his properties or assets (including
the Owned Shares) may be bound, or (B) violate any order, writ,
injunction, decree, judgment, statute, rule or regulation
applicable to Shareholder or any of its properties or assets.
(e) Shareholder understands and acknowledges that
Parent is entering into, and causing the Purchaser to enter into,
the Merger Agreement, and is incurring the obligations set forth
therein, in reliance upon Shareholder's execution and delivery of
this Agreement.
(f) No broker, investment banker, financial adviser or
other intermediary is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions
contemplated hereby or by the Merger Agreement based upon
arrangements made by or on behalf of Shareholder or any of his
Representatives.
(g) Shareholder agrees with and covenants to Parent
that Shareholder shall not request that the Company or Parent, as
the case may be, register the Transfer (book-entry or otherwise)
of any certificated or uncertificated interest representing any
of the securities of the Company or of Parent, as the case may
be, unless such Transfer is made in compliance with this
Agreement.
6. Representations and Warranties of Parent and
Purchaser. Parent and Purchaser hereby represent, warrant and
covenant to Shareholder as follows:
(a) Each of Parent and Purchaser is a corporation duly
organized and validly existing under the laws of its jurisdiction
of incorporation, and each of them is in good standing under the
laws of its jurisdiction of incorporation. Parent and Purchaser
have all necessary corporate power and authority to execute and
deliver this Agreement and perform their respective obligations
hereunder. The execution and delivery by Parent and Purchaser of
this Agreement and the performance by Parent and Purchaser of
their respective obligations hereunder have been duly and validly
authorized by the Board of Directors of each of Parent and
Purchaser and no other corporate proceedings on the part of
Parent or Purchaser are necessary to authorize the execution,
delivery or performance of this Agreement or the consummation of
the transactions contemplated hereby.
(b) This Agreement has been duly and validly executed
and delivered by Parent and Purchaser and constitutes a valid and
binding agreement of each of Parent and Purchaser, enforceable
against each of them in accordance with its terms except (i) to
the extent limited by applicable bankruptcy, insolvency or
similar laws affecting creditors rights and (ii) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(c) Except for the items disclosed in clauses (a)
through (f) in Section 4.3 of the Merger Agreement, none of the
execution and delivery of this Agreement by Parent or Purchaser,
the consummation by Parent or Purchaser of the transactions
contemplated hereby or compliance by Parent or Purchaser with any
of the provisions hereof shall (A) conflict with or result in any
breach of the certificate of incorporation or by-laws of Parent
or Purchaser, or (B) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, loan agreement,
bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or
obligation of any kind to which Parent or Purchaser is a party or
by which Parent or Purchaser or any of their respective
properties or assets may be bound, or violate any order, writ,
injunction, decree, judgment, statute, rule or regulation
applicable to Parent or Purchaser or any of their respective
properties or assets.
(d) Except for Xxxxxxx, Xxxxx & Co., whose fees and
expenses are the sole responsibility of Parent, no broker,
investment banker, financial adviser or other intermediary is
entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated hereby or by the
Merger Agreement based upon arrangements made by or on behalf of
Parent or any of its Representatives.
7. Further Assurances. From time to time, at the
other party's request and without further consideration, each
party hereto shall execute and deliver such additional documents
and take all such further lawful action as may be necessary or
desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by
this Agreement.
8. Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate upon the
earlier of (a) the date upon which the Parent shall have
purchased and paid for all of the Owned Shares of Shareholder in
accordance with the Offer and (b) the date on which the Merger
Agreement is terminated.
9. Miscellaneous.
(a) This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject
matter hereof.
(b) Shareholder agrees that this Agreement and the
respective rights and obligations of Shareholder hereunder shall
attach to any shares of Company Common Stock, and any securities
convertible into such shares, that may become Beneficially Owned
by Shareholder.
(c) Except as otherwise provided in this Agreement,
all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
(d) This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties and
their respective successors, personal or legal representatives,
executors, administrators, heirs, distributees, devisees,
legatees and permitted assigns, but neither this Agreement nor
any of the rights, interests or obligations hereunder shall be
assigned by either party (whether by operation of law or
otherwise) without the prior written consent of the other party;
provided, that Parent and the Purchaser may assign their rights
and obligations hereunder to any assignee of such parties' rights
and obligations under the Merger Agreement. Nothing in this
Agreement, express or implied, is intended to or shall confer
upon any other Person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
(e) This Agreement may not be amended, changed,
supplemented, or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by
each of the parties hereto. The parties may waive compliance by
the other parties hereto with any representation, agreement or
condition otherwise required to be complied with by such other
party hereunder, but any such waiver shall be effective only if
in writing executed by the waiving party.
(f) All notices and other communications hereunder
shall be in writing and shall be deemed given upon (a)
transmitter's confirmation of a receipt of a facsimile
transmission, (b) confirmed delivery by a standard overnight
carrier or when delivered by hand or (c) the expiration of five
business days after the day when mailed by certified or
registered mail, postage prepaid, addressed at the following
addresses (or at such other address for a party as shall be
specified by like notice):
If to Parent or Purchaser:
CIGNA Corporation
0 Xxxxxxx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopy: 000-000-0000
Attn: Xxxxxx X. Xxxx, Esq.
Copy to:
O'Melveny & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: 000-000-0000
Attn: C. Xxxxxxx Xxxxxxxxxx, Esq.
If to Shareholder, to Shareholder's address or
facsimile number set forth on the signature page
hereto;
or to such other address or facsimile number as the Person to
whom notice is given shall have previously furnished to the
others in writing in the manner set forth above.
(g) Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without affecting the validity or enforceability
of the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
(h) Each of the parties hereto acknowledges and agrees
that in the event of any breach of this Agreement, each
non-breaching party would be irreparably and immediately harmed
and could not be made whole by monetary damages. It is
accordingly agreed that the parties hereto (a) will waive, in any
action for specific performance, the defense of adequacy of a
remedy at law and (b) shall be entitled, in addition to any other
remedy to which they may be entitled at law or in equity, to
compel specific performance of this Agreement.
(i) All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the
exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or
remedy by such party. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement
or otherwise available in respect hereof at law or in equity, or
to insist upon compliance by any other party hereto with its
obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver
by such party of its right to exercise any such or other right,
power or remedy or to demand such compliance.
(j) This Agreement shall be governed and construed in
accordance with the laws of the State of New York (other than the
duties and obligations of directors and officers of the Company,
which shall be governed by the laws of the State of New
Hampshire), without giving effect to the principles of conflicts
of law thereof or of any other jurisdiction.
(k) The descriptive headings used herein are inserted
for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
"Include," "includes," and "including" shall be deemed to be
followed by "without limitation" whether or not they are in fact
followed by such words or words of like import.
(l) This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same
instrument.
IN WITNESS WHEREOF, Parent, Purchaser and Shareholder
have caused this Agreement to be duly executed as of the day and
year first above written.
CIGNA CORPORATION
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Vice President
Strategic Growth & Development
CHC ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: President
XX. XXXXXX XXXXXX
/s/ Xxxxxx X. Xxxxxx
Address: c/o Healthsource, Inc.
0 Xxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Telecopy: 000-000-0000
Owned Shares: 4,332,760
