Exhibit 10.1
AGREEMENT
Agreement, dated as of June 30, 2002 (the "Agreement"), among Lifeline
Systems, Inc., a Massachusetts corporation (the "Company"), and (a) ValueAct
Capital Partners, L.P. ("ValueAct Partners"), (b) ValueAct Capital Partners II,
L.P. ("ValueAct Partners II"), (c) ValueAct Capital International, Ltd.
("ValueAct International"), (d) VA Partners, L.L.C. ("VA Partners"), (e) Xxxxxxx
X. Xxxxx, (f) Xxxxxx X. Xxxxx, Xx. and (g) Xxxxx X. Xxxxx (collectively and
individually, "ValueAct"). Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Rights Agreement defined below.
WHEREAS, ValueAct is as of the date hereof the beneficial owner of 901,100
shares of the Common Stock, $.02 par value per share, of the Company (the
"Common Stock"), constituting 14% of the shares of Common Stock outstanding as
of April 30, 2002;
WHEREAS, the Company and State Street Bank and Trust Company, a
Massachusetts trust company, as rights agent (the "Rights Agent"), are parties
to a Rights Agreement dated as of July 24, 1998 (the "Rights Agreement"), under
which certain events would occur if a Person, alone or together with its
Affiliates and Associates, other than an Exempted Person, becomes the beneficial
owner of 15% or more of the shares of Common Stock then outstanding (the "Share
Limit");
WHEREAS, ValueAct desires to purchase additional shares of Common Stock
which may exceed from time to time 14.9% of the then outstanding shares of
Common Stock of the Company (any such shares in excess of 14.9% of the then
outstanding shares of Common Stock of the Company being referred to as the
"Additional Shares", and the time period commencing on the first date on which
ValueAct has beneficial ownership of any Additional Shares and ending on the
date on which ValueAct files an amended Schedule 13D with the Securities and
Exchange Commission showing that it no longer beneficially owns any Additional
Shares being referred to as the "Exemption Period") and the Board of Directors
of the Company has determined that it is in the best interests of the Company to
amend the Rights Agreement to permit ValueAct to do so, subject to the
limitations, terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the premises and the
covenants hereinafter contained, it is agreed as follows:
1. Amendment to Rights Agreement. Upon the execution and delivery of this
Agreement, the Company shall enter into Amendment No. 2 to Rights Agreement in
the form of Exhibit A attached hereto (the "Rights Amendment").
2. Voting of Additional Shares. In any and all matters requiring the vote
or consent of the stockholders of the Company for which the record date with
respect to such vote or consent is within the Exemption Period, ValueAct shall
vote, or cause to be voted, all of the
Additional Shares in the manner that a majority of the shares of the Common
Stock of the Company voting on such matter (other than the Additional Shares)
have been so voted.
3. Irrevocable Proxy. Concurrently with the execution of this Agreement,
each of the Persons comprising ValueAct, and each other Person which is an
Affiliate or Associate of ValueAct which owns shares of the Common Stock of the
Company, agrees to deliver to the Company a proxy in the form attached hereto as
Exhibit B (the "Proxy"), which shall be irrevocable to the extent provided
therein, with the total number of Additional Shares subject to the Proxies set
forth therein. Each Affiliate and Associate of ValueAct which acquires shares of
the Common Stock of the Company from time to time during the Exemption Period
shall enter into such a Proxy and shall deliver the same to the Company. The
Company shall return each Proxy to the grantor thereof following the last vote
for which the record date occurs within the Exemption Period.
4. No intent to effect change of control, etc. ValueAct represents and
warrants that (i) its reports on file with the Securities and Exchange
Commission were correct and complete in all material respects on the date when
filed, and that no new reports or amendments are required to be filed and (ii)
the shares of Common Stock which it beneficially owns or shall beneficially own
are being held by it for investment purposes only, and not with the purpose of
changing or influencing the control of the issuer. Accordingly, ValueAct agrees
that, during the Exemption Period, it will not and will cause its Affiliates and
Associates not to in any manner, directly or indirectly: (a) effect or seek,
offer or propose (whether publicly or otherwise) to effect, or cause or
participate in or in any way assist any other person to effect or seek to
effect, offer or propose (whether publicly or otherwise) to effect or
participate in, (i) any tender or exchange offer, merger or other business
combination involving the Company, (ii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to the
Company, or (iii) any "solicitation" of "proxies" (as such terms are used in the
proxy rules of the Securities and Exchange Commission) or consents to vote any
voting securities of the Company, (b) form, join or in any way participate in a
"group" (as defined under the Exchange Act) with respect to any securities of
the Company, (c) otherwise act, alone or in concert with others, to seek to
control or influence the management, Board of Directors or policies of the
Company, (d) make, or take any action which might force the Company to make, a
public announcement regarding any of the matters set forth in (a) above, or (e)
enter into any discussions or arrangements with any third party with respect to
any of the foregoing.
5. Fees and Expenses. ValueAct shall promptly reimburse the Company for its
costs and expenses, including reasonable legal fees and expenses, that are
incurred by the Company in connection with the negotiation, execution and
delivery of this Agreement and the Rights Amendment, not to exceed $7,500. In
addition, ValueAct shall promptly reimburse the Company for its costs and
expenses, including reasonable legal fees and expenses, that are incurred by the
Company in connection with any actions taken by the Company to enforce its
rights under this Agreement and the Rights Amendment.
6. Disclosure. The Company and ValueAct confirm that neither the Company
nor any other Person acting on its behalf has provided ValueAct or its agents or
counsel with any information that constitutes or might constitute material,
non-public information. The Company understands and confirms that ValueAct will
rely on the foregoing representation in effecting
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transactions in securities of the Company. ValueAct agrees not to seek
information from the Company or any other Person acting on its behalf that may
constitute material nonpublic information regarding the Company or its
securities unless prior thereto it has entered into a non-disclosure agreement
satisfactory to the Company.
7. General.
(a) Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
(b) Specific Performance. In addition to any and all other remedies
that may be available at law in the event of any breach of this Agreement,
the Company shall be entitled to specific performance of the agreements and
obligations of ValueAct hereunder and to such other injunctive or other
equitable relief as may be granted by a court of competent jurisdiction.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the Commonwealth of Massachusetts
(without reference to the conflicts of law provisions thereof).
(d) Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed delivered (i)
three business days after being send by registered or certified mail,
return receipt requested, postage prepaid or (ii) one business day after
being sent via a reputable nationwide overnight courier service
guaranteeing next business day delivery, in each case to the intended
recipient as set forth below:
If to the Company, at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx
00000-0000, Attention: President, or at such other address as may have been
furnished in writing by the Company to the other parties hereto, with a copy to
Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Xxxxxxx X. Xxxxx, Esq.; or
If to ValueAct, at Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, or at such other address as may
have been furnished in writing by ValueAct to the Company, with a copy to
Dechert, 4000 Xxxx Atlantic Tower, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
Any party may give any notice, request, consent or other communication
under this Agreement using any other tangible means (including, without
limitation, personal delivery, messenger service, telecopy, first class mail,
but not including electronic mail), but no such notice, request, consent or
other communication shall be deemed to have been duly given unless and until it
is actually received by the party for whom it is intended. Any party may change
the address to which notices, requests, consents or other communications
hereunder are to be delivered by giving the other parties notice in the manner
set forth in this Section.
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(e) Complete Agreement. This Agreement and the Rights Amendment
constitute the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof, and supersede all prior
agreements and understandings relating to such subject matter.
(f) Amendments and Waivers. This Agreement may be amended or
terminated and the observance of any term of this Agreement may be waived
with respect to all parties to this Agreement (either generally or in a
particular instance and either retroactively or prospectively), solely with
the written consent of the Company and ValueAct. No waivers of or
exceptions to any term, condition or provision of this Agreement, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.
(g) Counterparts; Facsimile Signatures. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same
document. This Agreement may be executed by facsimile signatures.
(h) Section Headings and References. The section headings are for the
convenience of the parties and in no way alter, modify, amend, limit or
restrict the contractual obligations of the parties. Any reference in this
agreement to a particular section or subsection shall refer to a section or
subsection of this Agreement, unless specified otherwise.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the day and year first above written.
LIFELINE SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: President
VALUEACT CAPITAL PARTNERS L.P.,
By VA PARTNERS, L.L.C., its General Partner
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx., Managing Member
VALUEACT CAPITAL PARTNERS II L.P.,
By VA PARTNERS, L.L.C., its General Partner
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx., Managing Member
VALUEACT CAPITAL INTERNATIONAL, LTD.,
by VA PARTNERS, L.L.C., its investment manager
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx., Managing Member
VA PARTNERS, L.L.C.
By: /s/ Xxxxxx X. Xxxxx, Xx.
------------------------------------------
Xxxxxx X. Xxxxx, Xx., Managing Member
/s/ Xxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx, Xx.
------------------------------------------
Xxxxxx X. Xxxxx, Xx.
/s/ Xxxxx X. Xxxxx
------------------------------------------
Xxxxx X. Xxxxx
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