Exhibit 4.4
INVESTOR STOCKHOLDERS AGREEMENT
This Investor Stockholders Agreement is made as of December 27, 2005
among SHG Holding Solutions, Inc., a Delaware corporation (the "COMPANY"), Onex
Partners LP, a Delaware limited partnership ("ONEX PARTNERS"), the Stockholders
listed on the signature pages of this Agreement and such other Stockholders of
the Company as may, from time to time, become parties to this Agreement in
accordance with the provisions hereof.
Upon consummation of the transactions contemplated by the Agreement
and Plan of Merger, dated as of October 22, 2005, as amended, among the Company,
Skilled Healthcare Group, Inc., a Delaware corporation ("SHG"), SHG Acquisition
Corp., a Delaware corporation ("MERGER SUB"), Heritage Partners Management
Company, LLP, a Delaware limited liability partnership, Heritage Fund II, L.P.,
a Delaware limited partnership and Heritage Investors II, L.L.C., a Delaware
limited liability company in connection with the merger of Merger Sub with and
into SHG and of certain related transactions to be consummated concurrently
therewith (the "CLOSING"), Onex Partners and certain other Stockholders will own
or may hereafter acquire certain Shares and certain options, and other rights to
acquire Shares from the Company, by exercise, conversion, exchange or otherwise.
The Company, the Onex Investors and certain other Stockholders are parties to a
Registration Agreement (the "REGISTRATION AGREEMENT"), also dated as of the date
hereof.
All of the Stockholders desire to enter into this Agreement for the
purpose of regulating certain aspects of the Stockholders' relationships with
one another and with the Company and in order to provide for the stability of
the Company.
The parties, intending to be legally bound hereby, agree as follows:
ARTICLE 1
Certain Definitions
1.1 Certain Definitions. When used in this Agreement the following
terms shall have the respective meanings shown:
"AFFILIATE" means, with respect to any Person, (a) any director or
executive officer of such Person, (b) any spouse, parent, sibling, descendant or
trust for the exclusive benefit of such Person or his or her spouse, parent,
sibling or descendant (or the spouse, parent, sibling or descendant of any
director or executive officer of such Person), and (c) any other Person that,
directly or indirectly, controls or is controlled by or is under common control
with such Person. For the purpose of this definition, (i) "control" (including
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, status as a general partner, or by
contract or otherwise and (ii) Onex Corporation shall be deemed to control any
Person controlled by Xxxxxx X. Xxxxxxxx so long as Xx. Xxxxxxxx controls Onex
Corporation.
"APPROVED SALE" has the meaning set forth in Section 5.2(a).
"BOARD" means the board of directors of the Company.
"BUSINESS DAY" means any day which is neither a Saturday or Sunday
nor a legal holiday on which banks are authorized or required to be closed in
New York City.
"CLASS A PREFERRED STOCK" means shares of the Company's 8%
cumulative accreting convertible class A preferred stock, par value $0.001 per
share.
"COMMON STOCK" means the Company's common stock, par value $0.001
per share.
"CONSOLIDATED INDEBTEDNESS" means, as of any date, the aggregate
amount outstanding, on a consolidated basis, of (a) all obligations of the
Company or its subsidiaries for borrowed money, (b) all obligations of the
Company or its subsidiaries evidenced by bonds, debentures, notes or other
similar instruments or upon which interest charges are customarily paid, (c) all
obligations of the Company or its subsidiaries for the deferred purchase price
of property or services, except current accounts payable arising in the ordinary
course of business and not overdue beyond such period as is commercially
reasonable for the Company or its subsidiaries' business, (d) all obligations of
the Company or its subsidiaries under conditional sale or other title retention
agreements relating to property purchased by such Person and all capitalized
lease obligations, (e) all payment obligations of the Company or its
subsidiaries on or for currency protection agreements, (f) all obligations of
the Company or its subsidiaries as an account party under any letter of credit
(excluding those supporting trade payables), (g) all obligations of the Company
or its subsidiaries or any third party secured by property or assets of the
Company or its subsidiaries (regardless of whether or not such Person is liable
for repayment of such obligations) and (h) all guarantees of the Company or its
subsidiaries.
"EBITDA" means the consolidated net income of the Company and its
subsidiaries, adjusted by adding thereto, to the extent deducted in determining
such consolidated net income, interest, taxes, depreciation and amortization,
for the four consecutive fiscal quarters immediately preceding the relevant Put
Event, as calculated in accordance with generally accepted accounting principles
in the United States consistently applied, based on the Company's consolidated
financial statements for the applicable period. If fewer than four full fiscal
quarters have elapsed from the date of this Agreement through the date of the
relevant Put Event, EBITDA shall be determined by reference to the results of
such full fiscal quarters, divided by
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the number of such full fiscal quarters, and multiplied by four. The Board may
make such adjustments to EBITDA as it determines in good faith are appropriate
to reflect non-recurring or unusual items.
"MAJORITY ONEX INVESTORS" means Onex Investors holding, in the
aggregate, a majority of the shares of Common Stock held by all Onex Investors.
"MANAGEMENT INVESTOR" means any of Xxxx X. Xxxxxxxxxxx, Xxxx X.
Xxxx, Xxxx X. Xxxxx, Xxxxxx X. Xxxx and Xxxx Xxxxxxx, and any other individual
employed by the Company or any subsidiary of the Company at the time he or she
becomes a party to this Agreement and is identified as a "Management Investor"
on the signature pages of this Agreement, in each case for so long as such
individual is employed by the Company or any subsidiary of the Company.
"ONEX CORPORATION" means Onex Corporation, an Ontario corporation.
"ONEX INVESTOR" means Onex Partners, Onex Corporation or any
Affiliate of Onex Partners or Onex Corporation that is a holder of Shares or
other equity interests of the Company.
"OTHER INVESTOR" means any holder of Shares that is or becomes a
party to this Agreement other than (a) an Onex Investor and (b) the transferees
of the Onex Investors that acquire all of the Shares held by the Onex Investors
as of the date hereof.
"PERSON" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
"PREFERRED STOCK" means, as applicable, the Class A Preferred Stock
and any other shares of preferred stock, if any, that are designated by the
Board or otherwise created after the date of this Agreement.
"PUBLIC OFFERING" means the sale of Common Stock in a public
offering registered under the Securities Act.
"PUBLIC SALE" means any sale of shares of Common Stock to the public
pursuant to an offering registered under the Securities Act or to the public
through a broker or dealer or to a market maker pursuant to the provisions of
Rule 144 (or any similar provision then in force) adopted under the Securities
Act.
"PUT PRICE" means, as of any date, (a) with respect to any Put
Securities that are shares of Common Stock, a per Share price equal to the
quotient of (i) the excess of (A) the product of six times EBITDA (in the case
of a put pursuant to Section 5.3(a)) or five times
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EBITDA (in the case of a put pursuant to Section 5.3(b)) for the four most
recent fiscal quarters prior to such date, over (B) the aggregate amount of the
Consolidated Indebtedness, plus the aggregate Liquidation Value (as such term is
defined, as applicable, in the Company's certificate of incorporation or in a
certificate of designation) and any accumulated and unpaid dividends on all
outstanding shares of Preferred Stock, less the amount of excess cash, each as
of the end of the period for which EBITDA is calculated, divided by (b) the
aggregate number of shares of Common Stock outstanding at the time of the
relevant Put Event, and (b) with respect to any Put Securities that are shares
of Preferred Stock, a per Share price equal to 100% (in the case of a put
pursuant to Section 5.3(a)) or 85% (in the case of a put pursuant to Section
5.3(b)) of the sum of the Liquidation Value of such Share and any accumulated
and unpaid dividends thereon. If the relevant Put Event occurs prior to the
completion of one full fiscal quarters from the date of this Agreement, the Put
Price shall be the cash price per Share paid by the Management Investor for the
Put Securities.
"PUT EVENT" has the meaning set forth in Section 5.3(a).
"PUT SECURITIES" means all of the Shares owned by a Management
Investor and any transferee for whom the Management Investor serves as the
Stockholder Representative, excluding any Shares issued under the Company's
Restricted Stock Plan.
"QUALIFIED PUBLIC OFFERING" means the sale of Common Stock in an
underwritten public offering registered under the Securities Act.
"SALE OF THE COMPANY" means any transaction pursuant to which
Person(s) other than the Company's existing Stockholders as of the date hereof
and their respective Affiliates acquire (a) capital stock of the Company
possessing the voting power under normal circumstances to elect a majority of
the Board (whether by merger, consolidation, recapitalization, reorganization or
sale or transfer of the Company's equity interests or otherwise) or (b) all or
substantially all of the Company's assets (determined on a consolidated basis).
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SHARES" means (a) the shares of the Company's Common Stock and
Preferred Stock purchased, issued to or otherwise acquired by any Stockholder,
including any such shares acquired upon the exercise of any warrant or option,
and (b) any equity securities issued or issuable, directly or indirectly, with
respect to the securities referred to in clause (a) by way of dividend or share
split, exchange or conversion, or in connection with a combination of Shares,
shares, recapitalization, merger, consolidation or other reorganization. As to
any particular equity interests constituting Shares, such Shares will continue
to be Shares subject to this Agreement in the hands of any holder of such Shares
(other than Shares sold to purchasers pursuant to a Public Sale).
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"STOCKHOLDER" means any holder of Shares that is or becomes a party
to this Agreement.
"STOCKHOLDER REPRESENTATIVE" has the meaning set forth in Section
4.3(a).
"VESTED PUT DATE" has the meaning set forth in Section 5.3(c).
"VESTED PUT OPTION" has the meaning set forth in Section 5.3(c).
ARTICLE 2
Board of Directors of the Company
2.1 Board of Directors.
(a) Each of the Stockholders will vote all of its Shares, and the
Company will take all necessary or desirable action within its control, in order
to cause the election to the Board of such individuals as may be designated from
time to time by the Majority Onex Investors.
(b) The provisions of this Article 2 will terminate automatically
upon the earlier to occur of (i) an Approved Sale or (ii) a Qualified Public
Offering.
ARTICLE 3
Covenants of the Company and Other Matters
3.1 Financial Information. So long as a Stockholder owns any Shares
and requests the Company to provide information under this Section, the Company
shall furnish or otherwise make available to such Stockholder the following:
(a) as promptly as practicable, and in any event within 90 days
after the end of each fiscal year of the Company, copies of the audited annual
consolidated financial statements of the Company and its subsidiaries, including
a consolidated balance sheet of the Company and its subsidiaries as at the end
of such fiscal year, consolidated statements of income and of cash flow of the
Company and its subsidiaries for such fiscal year and the related notes thereto,
and stating in comparative form the figures as of the end of and for the
previous fiscal year, accompanied by an audit report thereon by a firm of
independent certified public accountants of national recognition, and
(b) as promptly as practicable, and in any event within 45 days
after the end of each fiscal quarter of the Company, copies of the unaudited
quarterly consolidated financial statements of the Company and its subsidiaries,
including a consolidated balance sheet of the Company and its subsidiaries as at
the end of such fiscal quarter, and consolidated statements of
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income and of cash flow of the Company and its subsidiaries for such fiscal
quarter and year to date period, and stating in comparative form the figures as
of the end of and for the corresponding fiscal quarter and year to date period
in the previous fiscal year; provided, that such statements need not cover
periods prior to the date hereof.
The Board may require that Other Investors execute a confidentiality
agreement acceptable to the Board as a condition to the receipt of the financial
information set forth in this Sections 3.1, but such confidentiality agreement
shall not apply to any financial information made publicly available by the
Company in connection with or following a Public Offering.
(c) The provisions of this Section 3.1 will terminate automatically
upon the earlier to occur of (i) an Approved Sale or (ii) a Qualified Public
Offering.
3.2 Multiple Voting Stock upon IPO. The Stockholders hereby agree to
approve and to raise no objection to the implementation, at the election of the
Majority Onex Investors in connection with an initial Public Offering or an
initial Qualified Public Offering, of a multiple vote stock to be exchanged for
the Shares that are held by the Stockholders. In the event that such multiple
vote stock is issued, the Stockholders agree to enter into a voting agreement
(in addition to that provided by Section 8.1), which provides that each
Stockholder, so long as such Stockholder holds Company common stock exchanged
for Shares, will vote for the election to the Board of individuals designated
from time to time by the Majority Onex Investors. Such voting arrangement will
terminate at such time as the Onex Investors cease to own in the aggregate at
least 10% of the Company's equity securities held by them immediately after
giving effect to the initial Public Offering or initial Qualified Public
Offering, as the case may be.
ARTICLE 4
Restrictions on Transfer of Shares
4.1 Transfer of Stockholder Shares. No Other Investor shall sell,
transfer, assign, pledge, exchange or otherwise dispose of (a "TRANSFER") any
interest in Shares except pursuant to the provisions of this Article 4, Article
5 or pursuant to a Public Sale.
4.2 First Offer Right.
(a) At any time after the fifth anniversary of the date of this
Agreement and prior to a Qualified Public Offering, any Other Investor (the
"TRANSFERRING STOCKHOLDER") may Transfer Shares pursuant to a bona fide offer
from a Person other than an Affiliate of such Other Investor by complying with
this Section 4.2; provided, that a Management Investor may not Transfer any
Shares that are owned by such Management Investor on the date of this Agreement
unless such Transfer includes all (and not less than all) Shares owned by the
Management Investor on the date of this Agreement (including Shares that are
Transferred pursuant to Section 4.3(a)(i), but not including any Shares that are
Transferred pursuant to Section 4.3(a)(ii)). In
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order to do so, the Transferring Stockholder must deliver a notice (the "OFFER
NOTICE") to the other Stockholders and to the Company, disclosing the proposed
number and type of Shares (the "SUBJECT SHARES") to be Transferred, the identity
of the proposed purchasers, and, in reasonable detail, the proposed terms and
conditions of the Transfer, which must include payment of the purchase price in
cash at the closing of the Transfer. Then, each of the Stockholders other than
the Transferring Stockholder that own Shares of the same type as the Subject
Shares (collectively the "FIRST OFFER STOCKHOLDERS") may elect to purchase its
First Offer Percentage of the Subject Shares specified in the Offer Notice at
the price per Subject Share in cash and on the other terms specified therein by
delivering notice of such election to the Transferring Stockholder within 30
days after the delivery of the Offer Notice; if less than all of the First Offer
Stockholders elect to make such purchase, the remaining Subject Shares shall be
reoffered to those First Offer Stockholders who have elected to make such
purchase under procedures specified by the Company until either an election to
purchase all of the Subject Shares has been made or no First Offer Stockholder
is willing to increase the number of Subject Shares that it is electing to
purchase. If the First Offer Stockholders have not elected to purchase all of
the Subject Shares within 45 days after delivery of the Offer Notice, the
Company may elect to purchase all (but not less than all) of the Subject Shares
that the First Offer Stockholders did not elect to purchase at the price per
Subject Share in cash and on the other terms specified in the Offer Notice by
delivering notice of such election to the Transferring Stockholder within 60
days after delivery of the Offer Notice. If the Company and/or the First Offer
Stockholders have elected to purchase all (but not less than all) of the Subject
Shares from the Transferring Stockholder, the transfer of such Subject Shares
pursuant to such elections will be consummated at a time and place specified by
the Company within 90 days after delivery of the Offer Notice. If (and only if)
the Company and the First Offer Stockholders have not elected to purchase all of
the Subject Shares within 60 days after delivery of the Offer Notice, the
elections of the Company and the First Offer Stockholders to purchase less than
all of the Subject Shares shall be ineffective and the Transferring Stockholder
may, not less than 60 days or more than 120 days after delivery of the Offer
Notice, transfer all (but not less than all) of the Subject Shares to the
proposed purchasers set forth in the Offer Notice at the same price per Subject
Share in cash and on the same other terms offered to the Company and the First
Offer Stockholders in the Offer Notice; provided, that prior to such Transfer,
such transferees shall have agreed in writing to be bound by the provisions of
this Agreement. If the Subject Shares are not so transferred within such period,
they will be subject to the provisions of this Section 4.2(a) with respect to
subsequent transfer and the Transferring Stockholder will not be entitled to
deliver another Offer Notice for 90 days after the Subject Shares again become
subject to this Section 4.2(a).
(b) If the Board determines in good faith that the acquisition of
Subject Shares by a proposed purchaser identified in an Offer Notice could have
an adverse effect on the Company for competitive or regulatory reasons, the
Company shall deliver notice of that determination to the Stockholders within 20
days after delivery of the Offer Notice, such Offer Notice shall be void and of
no effect and the contemplated Transfer of the Subject Shares by the
Transferring Stockholder shall be prohibited. The Transferring Stockholder shall
provide the Board with such information as the Board may reasonably request in
order to make that
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determination and the 20-day period referred to in the preceding sentence shall
be tolled during any period in which such information has been requested and not
supplied.
(c) The Stockholders may transfer any of their respective rights to
purchase the Subject Shares under Section 4.2(a) to any of their respective
Affiliates; provided, that prior to such transfer, such Affiliate shall have
agreed in writing to become a party to this Agreement.
(d) A First Offer Stockholder's "FIRST OFFER PERCENTAGE" is the
quotient obtained by dividing the number of Shares of the same type as the
Subject Shares held by such First Offer Stockholder by the number of Shares of
the same type as the Subject Shares held by all First Offer Stockholders.
4.3 Permitted Transfers.
(a) The restrictions contained in this Article 4 shall not apply
with respect to (i) any Transfer of Shares by any Stockholder to or among its
Affiliates or (ii) any Transfer of Shares by any Stockholder to any other
Stockholder; provided, that the restrictions contained in this Article 4 shall
continue to be applicable to the Shares after any such Transfer and provided
further that the transferees of such Shares shall have agreed in writing to
become parties to this Agreement. Any Management Investor transferring Shares
pursuant to this Section 4.3(a)(i) (or such Management Investor's executor,
personal representative or legal representative in the event of death or
incapacity) shall remain the "STOCKHOLDER REPRESENTATIVE" with respect to all
such transferred Shares and shall be responsible for all consents, notices and
other communication between the Company and the other Stockholders, on the one
hand, and the transferee(s) of such Shares, on the other hand, as well as
receipt of the Put Price, if applicable. Without limiting the foregoing, (i)
only the Stockholder Representative shall give or receive any Offer Notice or
Put Notice or have the right to elect to purchase Subject Shares under Section
4.2(a) or to sell Shares under Section 5.3(a), (ii) the number of Shares held by
the Stockholder Representative as a First Offer Stockholder shall be deemed to
include the Shares held by his transferee(s)(but shall not include shares sold
in a Public Sale), and (iii) the Shares held by the Stockholder Representative's
transferees (other than Shares sold in a Public Sale) shall be deemed to be Put
Securities of the Stockholder Representative and all references to "Management
Investor" in Section 5.3 shall be deemed to include such transferees.
(b) Notwithstanding the provisions of Section 4.2, from the date the
Company completes a Qualified Public Offering, an Other Investor may sell
Pre-QPO Shares only pursuant to Public Sale, and limited to a percentage of the
Other Investor's Pre-QPO Shares equal, at the date of any Public Sale, to:
(i) the greater of
(A) a cumulative number of Pre-QPO Shares accruing as
follows: 12.5% of the Other Investor's Pre-QPO Shares on the date of the
Qualified
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Public Offering and 12.5% of the Other Investor's Pre-QPO Shares on each
anniversary of the Qualified Public Offering, but not to exceed an
aggregate of 50% of the Other Investor's Pre-QPO Shares, and
(B) the cumulative percentage of Onex Investors' Pre-QPO
Shares sold by Onex Investors, in and at any time after. the Qualified
Public Offering and prior to such time, minus
(ii) the Pre-QPO Shares previously sold by the Other Investor,
whether in the Qualified Public Offering, pursuant to this Section 4.3(b)
or otherwise.
Any sale pursuant to this Section 4.3(b) shall be subject to the provisions of
Section 3 of the Registration Agreement.
As used herein, the term "PRE-QPO SHARES", as to any Person, means the shares of
Common Stock held by that Person immediately prior to the consummation of a
Qualified Public Offering, and including any shares of Common Stock issued upon
the exercise of any warrant or option held by that Person or issuable upon
conversion of any convertible securities, including Preferred Stock, held by
that Person immediately prior to the consummation of a Qualified Public
Offering.
(c) The provisions of this Article 4 shall terminate automatically
upon the earlier to occur of (i) an Approved Sale and (ii) the fifth anniversary
of a Qualified Public Offering.
(d) In the case of any Transfer pursuant to Section 4.3(a)(i), a
transferee may at any time, and shall forthwith in the event that such
transferee ceases to be an Affiliate of the transferor, transfer back to such
transferor all of the Shares held by it.
ARTICLE 5
Tag-Along, Drag-Along and Put Rights
5.1 Tag-Along Right.
(a) At least 30 days prior to any Transfer of Shares by any Onex
Investor (the "INITIATING STOCKHOLDER"), such Initiating Stockholder shall
deliver a written notice (the "SALE NOTICE") to each other Stockholder
(including any other Onex Investor), specifying in reasonable detail the
identity of the prospective transferee(s), the number and type of Shares to be
transferred, the price per Share to be paid for such Shares, and the other terms
and conditions of the Transfer. Each of such other Stockholders who own Shares
of the type identified in the Sale Notice may elect to participate in the
contemplated Transfer at the same price per Share and on the same terms by
delivering written notice to the Initiating Stockholder within 15 days after
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delivery of the Sale Notice (each such electing Stockholder is a "PARTICIPATING
STOCKHOLDER"). Each Participating Stockholder will be entitled and obligated to
sell in the contemplated Transfer, at the price per Share and on the same terms,
a number and type of Shares equal to such Participating Stockholder's Tag-Along
Percentage of the number of Shares proposed to be transferred by the Initiating
Stockholder and the number of Shares to be transferred by the Initiating
Stockholder in such contemplated Transfer shall be reduced by the number of
Shares to be transferred by the Participating Stockholders (unless the
Initiating Stockholder purchases such Shares directly from the Participating
Stockholders pursuant to Section 5.1(b), simultaneously with and conditioned
upon the closing of the sale by the Initiating Stockholder). However, the
contemplated Transfer may provide for payment in securities, or a combination of
cash and securities, to all Participating Stockholders that are accredited
investors within the meaning of Regulation D under the Securities Act and in
cash to Participating Stockholders that are not accredited investors or may
provide Participating Stockholders that are accredited investors with the option
to receive securities, or a combination of cash and securities, or cash while
Participating Stockholders that are not accredited investors receive cash. The
Initiating Stockholder may abandon the contemplated Transfer at any time prior
to its closing without any liability or obligation under this Section 5.1. A
Participating Stockholder's "TAG-ALONG PERCENTAGE" is the quotient obtained by
dividing the number of Shares of the type identified in the Sale Notice owned by
such Participating Stockholder by the sum of the aggregate number of Shares of
the type identified in the Sale Notice owned by the Stockholders (including the
Initiating Stockholder) and, without duplication, all other holders having
co-sale rights with respect to such Transfer.
(b) The Initiating Stockholder shall effect the participation of the
Participating Stockholders in the contemplated Transfer by either (i) obtaining
the agreement of the prospective transferee(s) to purchase from the
Participating Stockholders the Shares which the Participating Stockholders are
entitled to sell to such prospective transferee(s) pursuant to Section 5.1(a) or
(ii) purchasing the number of Shares from the Participating Stockholders which
the Participating Stockholders would have been entitled to sell to the
transferee(s) pursuant to Section 5.1(a) at the same price per Share and on the
same terms and conditions at which such Participating Stockholders are entitled
otherwise to sell such Shares to the transferee(s) pursuant to Section 5.1(a),
in either case simultaneously with and conditioned upon the closing of the
proposed Transfer.
(c) The Participating Stockholders will use their best efforts to
cooperate in the proposed Transfer and will take all necessary and desirable
actions in connection with the consummation of the proposed Transfer as are
reasonably requested by the Initiating Stockholder, including, but not limited
to, entry into agreements and provision of representations, warranties and
indemnification; provided, that no Participating Stockholder shall be required
to enter into substantively different agreements or provide substantively
different representations and warranties or indemnification than the Initiating
Stockholder and each Participating Stockholder's obligations thereunder shall be
several and limited to the proceeds received by such Stockholder in connection
with such proposed Transfer.
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(d) Prior to transferring its Shares pursuant to this Section 5.1,
the Initiating Stockholder shall cause the prospective transferee to agree in
writing to become a party to this Agreement.
(e) The provisions of this Section 5.1 shall not apply to any Public
Sale or Public Offering, to any Transfer in connection with a Sale of the
Company or to any Transfer to an Onex Investor or an Affiliate of an Onex
Investor; provided, that any Affiliate of an Onex Investor to which Shares are
transferred must have agreed in writing to become a party to this Agreement.
5.2 Drag-Along Right.
(a) Subject to Section 5.2(b), if the Majority Onex Investors
approve a Sale of the Company (the "APPROVED SALE"), the Stockholders will
consent to and raise no objections to the Approved Sale and (i) if the Approved
Sale is structured as a sale of Shares, the Stockholders will sell the types and
classes of securities in the same relative proportions as do Onex Investors or
Affiliates of Ones Investors on the terms and conditions approved by the
Majority Onex Investors, (ii) if the Approved Sale is structured as a merger,
consolidation or other reorganization, the Stockholders will vote in favor
thereof and will not exercise any dissenters' rights of appraisal they may have
under Delaware law, and (iii) if the Approved Sale is structured as a sale of
all or substantially all of the Company's consolidated assets, the Stockholders
will vote in favor thereof. The Stockholders will use their best efforts to
cooperate in the Approved Sale and will take all necessary and desirable actions
in connection with the consummation of the Approved Sale as are reasonably
requested by the Majority Onex Investors, including, but not limited to, entry
into agreements and provision of representations, warranties and
indemnification, provided, that no Stockholder shall be required to enter into
substantively different agreements or provide substantively different
representations and warranties or indemnification than any other Stockholder and
each Stockholder's obligations thereunder shall be several and limited to the
proceeds received by such Stockholder in connection with such Approved Sale.
(b) The obligations of the Stockholders with respect to the Approved
Sale are subject to the satisfaction of the following conditions: (i) upon the
consummation of the Approved Sale, all of the Stockholders will receive the same
form and per Share amount of consideration for their Shares as all other
Stockholders, or if any Stockholders are given an option as to the form and
amount of consideration to be received, all Stockholders must be given the same
option (except that the Approved Sale may provide for payment in securities, or
a combination of cash and securities, to all Stockholders that are accredited
investors within the meaning of Regulation D under the Securities Act and in
cash to Stockholders that are not accredited investors or may provide
Stockholders that are accredited investors with the option to receive
securities, or a combination of cash and securities, or cash while Stockholders
that are not accredited investors receive cash); and (ii) if the Approved Sale
includes a sale to a Person that is
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an Onex Investor or an Affiliate of an Onex Investor, the holders of a majority
of the voting control of the Shares held by the Other Investors may request that
an appraisal of the fair market value of the securities to be sold and/or
received (based on the fair market value of all of the Company's outstanding
capital stock, without regard to any control premium or liquidity or minority
discount) by the Other Investors in connection with such Approved Sale be made
by an investment banking firm of national recognition mutually agreeable to such
parties, and it shall be a condition to the consummation of such Approved Sale
to an Onex Investor or an Affiliate of an Onex Investor that such Person pay as
consideration to the Other Investors the fair market value as determined
pursuant to such appraisal (if such appraisal results in a valuation greater
than the valuation of the consideration proposed to be delivered in connection
with such Approved Sale, the Company shall pay the costs of such appraisal,
otherwise the requesting Stockholders shall pay such costs).
(c) If the proposed Approved Sale involves the receipt by
Stockholders of securities for which Section 4(2) of the Securities Act of 1933
or Rule 506 (or any similar rule then in effect) promulgated by the Securities
and Exchange Commission may be available with respect to such negotiation or
transaction (including a merger, consolidation or other reorganization), the
Stockholders will, at the request of the Majority Onex Investors, and to the
extent required to comply with Regulation D, appoint a purchaser representative
(as such term is defined in Rule 501) reasonably acceptable to the Majority Onex
Investors. If any Stockholder appoints a purchaser representative designated by
the Majority Onex Investors, the Company will pay the fees of such purchaser
representative, but if any Stockholder declines to appoint the purchaser
representative designated by the Majority Onex Investors, such holder will
appoint another purchaser representative (reasonably acceptable to the Majority
Onex Investors), and such holder will be responsible for the fees of the
purchaser representative so appointed.
5.3 Put Rights on Certain Events.
(a) If, prior to the Company's initial Public Offering, a Management
Investor dies or suffers a permanent disability (the "PUT EVENT"), then such
Management Investor's executor, personal representative or legal representative
shall have the right to require the Company to purchase (a "PUT OPTION"), by
delivery of a written notice (the "PUT NOTICE") to the Company within 180 days
after the date of the Put Event (the "PUT PERIOD"), and the Company shall be
required to purchase, all of the Put Securities at a price per Share equal to
the applicable Put Price as of the date of the Put Event. As used herein,
"PERMANENT DISABILITY" of a Management Investor means a physical or mental
medical condition that renders such Management Investor incapable of full time
employment and which is reasonably expected to continue to have such effect for
more than one year. Any Management Investor who seeks to exercise the Put Option
by reason of a permanent disability shall (i) authorize and direct his or her
physicians and other health care professionals to discuss his or her medical
condition with representatives of the Company (waiving any applicable privilege)
and (ii) submit to examination by physicians designated by the Company.
12
(b) Commencing as of December 27, 2010, and on each of the four
subsequent one year anniversaries of such date (each such date a "VESTED PUT
DATE"), the Management Investor shall have the right to require the Company to
purchase (a "VESTED PUT OPTION"), in the 12 month period following such Vested
Put Date, by delivery of a Put Notice to the Company, and the Company shall be
required to purchase, up to 10% (16-2/3% in the case of Xxxx Xxxxxxxxxxx) of the
Put Securities owned by the Management Investor on the date hereof, at a price
per Share equal to the applicable Put Price as of the date on which the Put
Notice is delivered to the Company; provided, that the aggregate number of Put
Securities that the Company shall be required to purchase under this Section
5.3(b) shall not exceed 50% of the Put Securities owned by the Management
Investor on the date hereof.
(c) The closing of any purchase of Put Securities by the Company
pursuant to this Section 5.3 shall take place at the principal office of the
Company within 15 days after the expiration of the relevant Put Period as the
Company shall specify to such Management Investor (or, in the case of death or
permanent disability, such Management Investor's executor, personal
representative or legal representative) in writing (or such later date
designated by the Company as may be necessary to determine the Put Price or
confirm the existence of permanent disability). At such closing, such Management
Investor (or, in the case of death or permanent disability, such Management
Investor's executor, personal representative or legal representative) shall
deliver to the Company certificates and/or other instruments representing,
together with stock or other appropriate powers duly endorsed with respect to,
the Put Securities, free and clear of all liens, encumbrances or other
restrictions (other than pursuant to securities laws or this Agreement), against
payment by the Company of the purchase price for the Put Securities in cash by
delivery of a certified check payable to such Management Investor (or, in the
case of death, such Management Investor's estate). Notwithstanding the
foregoing, if the payment of all or any portion of the purchase price is not
permitted to be made at the closing (or if distribution to the Company by its
subsidiaries of the funds necessary for such payment) are not permitted by the
terms any debt agreement(s) pursuant to which the Company or any of its
subsidiaries has any indebtedness for borrowed money (each a "DEBT AGREEMENT"
and collectively, the "DEBT AGREEMENTS"), or the payment would cause a Default
or an Event of Default (as such terms are defined in any Debt Agreement), then
that portion of the purchase price shall instead become a subordinated
obligation of the Company (a "SUBORDINATE OBLIGATION"); the Subordinate
Obligation shall not be payable during the continuance of a Default or an Event
of Default (as defined in any Debt Agreement) or if such payment would not
otherwise be permitted by any Debt Agreement or would result in a Default or an
Event of Default (as defined under any Debt Agreement). The Subordinate
Obligation shall be payable on the earlier to occur of (i) one day after the
closing date of a complete refinancing of the Company's senior and subordinate
debt and (ii) receipt by the Company of the written approval of its senior and
subordinate lenders to pay the principal and interest on the obligation in full.
The Subordinate Obligation shall accrue interest at the weighted average rate
applicable from time to time on the Company's senior debt. The Company shall
pre-pay the amount of any Subordinate Obligation, together with accrued and
unpaid interest, as and when it is permitted to do so (and to cause its
subsidiaries to distribute to the Company the funds necessary for such payment)
without Default (as defined) or creating an
13
Event of Default (as defined) under any Debt Agreement, provided, that if there
is more than one Subordinate Obligation outstanding, the Company shall make
pre-payments on each Subordinate Obligation in the proportion that the
outstanding amount thereof (including accrued and unpaid interest) bears to the
then aggregate outstanding Subordinate Obligations (including accrued and unpaid
interest).
(d) If and to the extent a Management Investor (or, in the case of
death or permanent disability, a Management Investor's executor, personal
representative or legal representative) does not deliver a Put Notice within the
Put Period or if the purchase of all Put Securities does not occur at the
scheduled closing date through the fault of such Management Investor's executor,
personal representative or legal representative, then such Management Investor's
Put Option shall terminate.
5.4 Termination. The provisions of this Article 5 shall terminate
automatically upon the earlier to occur of (a) an Approved Sale and (b) a
Qualified Public Offering.
ARTICLE 6
Preemptive Rights
6.1 Grant of Preemptive Right. Subject to Section 6.6, if the
Company authorizes the issuance or sale of any Shares or securities convertible
into or exercisable for Shares to any Onex Investor or Affiliate of an Onex
Investor (other than the Company or any subsidiary of the Company) (together,
the "PARTICIPATION SECURITIES"), the Company shall, on the terms and conditions
of this Article 6, offer to each of the Other Investors who own Shares of the
same type as the Participation Securities (or the securities into which the
Participation Securities are convertible or for which they are exercisable) the
right to purchase or subscribe for up to an aggregate number of Participation
Securities equal to the product of (i) the total number of Participation
Securities to be issued or sold by the Company and (ii) a fraction, the
numerator of which is the aggregate number of Shares of the same type as the
Participation Securities held by such Other Investor, and the denominator of
which is the aggregate number of Shares of the same type as the Participation
Securities outstanding, in each case, determined as of the date of the
Preemptive Notice. For the purpose of this Article 6, "STOCKHOLDER PARTICIPATION
SECURITIES" means, with respect to any Other Investor in connection with any
proposed issuance or sale of Participation Securities, that number of
Participation Securities as to which such Other Investor is entitled to exercise
preemptive rights hereunder, calculated under the immediately preceding
sentence. However, the Company may elect not to extend preemptive rights to any
Other Investor that is not an "accredited investor" within the meaning of
Regulation D under the Securities Act or whose participation in the offering
would, in the reasonable judgment of the Company, require registration or
qualification under any federal, state or foreign securities law and if it does
so the Persons so excluded shall not be Other Investors for any purpose under
this Article 6.
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6.2 Delivery of Preemptive Notice by the Company. If the Company
proposes to issue or sell any Participation Securities in a transaction giving
rise to the preemptive rights provided for in this Article 6, subject to Section
6.4, the Company shall send a written notice (the "PREEMPTIVE NOTICE") to each
Other Investor at least 10 Business Days before the proposed date of such
issuance or sale, setting forth (a) the type and, if not Shares, the terms and
conditions of the Participation Securities, (b) the number of Participation
Securities that the Company proposes to sell or issue, (c) the price (before any
commission or discount) at which such Participation Securities are proposed to
be issued or sold (or, in the case of an offering in which the price is not
known at the time the Preemptive Notice is given, the method of determining such
price and an estimate thereof), (d) the other material terms of the transaction,
and (e) the aggregate number of Stockholder Participation Securities which may
be purchased by such Other Investor (determined under Section 6.1).
6.3 Delivery of Exercise Notice; Waiver of Preemptive Right. At any
time within the 10 Business Days following the date the Company delivers the
Preemptive Notice, an Other Investor may exercise the preemptive rights provided
under this Article 6 by delivering notice to the Company (an "EXERCISE NOTICE")
exercising such Other Investor's preemptive rights as to all, but not less than
all, of its Stockholder Participation Securities. If any Other Investor does not
deliver a timely Exercise Notice, such Other Investor shall be deemed to have
irrevocably waived the preemptive rights provided by this Article 6 with respect
to all Participation Securities that are the subject of the Preemptive Notice,
and the Company shall be permitted to issue such Other Investor's Stockholder
Participation Securities free from the preemptive rights provided under this
Article 6.
6.4 Terms of Issuance of Sale of Participation Securities.
(a) Subject to Section 6.4(b), (c) and (d) below, the purchase of,
or subscription for Participation Securities by the Other Investors who exercise
preemptive rights under this Article 6, shall be at the same price and on the
same terms and conditions, including the date of sale or issuance, as are
applicable to the proposed issuance or sale by the Company of the Participation
Securities to any Onex Investor or Affiliate of a Onex Investor.
(b) If the Company determines in good faith that the delay
occasioned by complying with the procedures contemplated by this Article 6 would
be prejudicial to the Company or its financial condition or business and
operations, then the Company may before delivering the Preemptive Notice or
after delivering the Preemptive Notice (but in such case before observing the
time periods and other procedures set forth in this Article 6), (i) issue or
sell all or any part of the Participation Securities to any Onex Investor or
Affiliate of an Onex Investor without issuing or selling all or any part of the
Stockholder Participation Securities of some or all of the Other Investors to
any such Other Investors or (ii) issue or sell all or any part of the
Participation Securities to any Onex Investor or Affiliate of an Onex Investor
and also issue
15
to any Onex Investor or Affiliate of an Onex Investor all or any part of the
Stockholder Participation Securities of some or all of the Other Investors.
If the Company elects to issue Participation Securities to any Onex
Investor or Affiliate of an Onex Investor under this Section 6.4(b) before it
delivers a Preemptive Notice, then the Company shall deliver the Preemptive
Notice to each Other Investor no later than 10 Business Days after the date on
which the Participation Securities are issued or sold to the Onex Investor or
Affiliate of an Onex Investor. If at the time any Other Investor delivers a
timely Exercise Notice in accordance with Section 6.3, the Company has not yet
issued or sold the Stockholder Participation Securities that such Other Investor
is entitled to purchase hereunder to an Onex Investor or Affiliate of an Onex
Investor, then such unissued Stockholder Participation Securities shall be
issued or sold by the Company to such Other Investor as promptly as practicable,
but in no event later than 5 Business Days following the date of delivery of the
Exercise Notice, at the same price, and on the same terms and conditions, as
were applicable to the issuance or sale of Participation Securities to any Onex
Investor or Affiliate of an Onex Investor.
(c) If at the time an Other Investor delivers a timely Exercise
Notice in accordance with Section 6.3, the Company has issued or sold some or
all of the Stockholder Participation Securities that such Other Investor is
entitled to purchase hereunder to any Onex Investor or Affiliate of an Onex
Investor, then any such Stockholder Participation Securities shall be sold by an
Onex Investor or Affiliate of an Onex Investor to such Other Investor as
promptly as is practicable, but in no event later than 5 Business Days following
the date of delivery of the Exercise Notice, at a price per Participation
Security equal to the price paid by the Onex Investor or Affiliate of an Onex
Investor therefor, plus interest on such amount from the date of purchase by the
Onex Investor or Affiliate of an Onex Investor through the date of sale to the
Other Investor, at a rate per annum equal to the then-effective prime rate, as
announced by Citibank N.A. At the closing of any such sale by an Onex Investor
or Affiliate of an Onex Investor, such Persons shall deliver to the Other
Investor certificates representing the Stockholder Participation Securities to
be conveyed, duly endorsed or accompanied by stock powers executed in blank,
against payment of the purchase price therefor calculated hereunder.
(d) If Participation Securities issued or sold by the Company
consist of multiple types or classes of securities, then the Other Investors who
elect to exercise their preemptive right shall purchase such types or classes of
securities in the same relative proportions as do Onex Investors or Affiliates
of Onex Investors. Further, if any Participation Securities to be issued or sold
by the Company are to be issued or sold by the Company as part of a unit that
includes, or otherwise together with other securities (including debt
securities) of the Company that are not Participation Securities ("OTHER
SECURITIES"), then any Other Investor exercising preemptive rights provided
under this Article 6 must in connection therewith also purchase such Other
Securities of the Company that are part of such unit or otherwise being issued
or sold by the Company together with the Participation Securities, and the
definitions of
16
"Participation Securities" and "Stockholder Participation Securities" shall for
all purposes of this Article 6 be deemed to include any such Other Securities of
the Company.
6.5 Sale by Company Absent Exercise of Preemptive Right. If, with
respect to any issuance or sale of Participation Securities in connection with
which the Company has delivered Preemptive Notices, no Other Investor has
delivered a timely Exercise Notice covering some or all Stockholder
Participation Securities that are the subject of such Preemptive Notices, the
Company shall, unless the Company has already done so in reliance on Section
6.4(b), have 120 days following the expiration of the 10 Business Day period
following the date of delivery of the Preemptive Notice in which to sell all or
any part of those Stockholder Participation Securities which Stockholders have
not so elected to purchase to any Person or entity, including but not limited to
any Onex Investor or Affiliate of an Onex Investor.
6.6 Termination; Securities Excluded from Preemptive Right. The
provisions of this Article 6 will terminate automatically upon the earlier to
occur of (a) an Approved Sale or (b) a Qualified Public Offering and shall not
apply to such Approved Sale or Qualified Public Offering. The provisions of this
Article 6 shall not apply to (i) Participation Securities issued in connection
with a pro rata stock or stock dividend, stock split or recapitalization or the
like, (ii) Participation Securities issued upon exercise or conversion of any
exercisable or convertible securities or rights owned by an Onex Investor or
Affiliate of an Onex Investor, (iii) Participation Securities issued in a Public
Sale or Public Offering, whether or not any Onex Investor or Affiliate of an
Onex Investor participates in such Public Sale or Public Offering, or (iv)
Participation Securities issued in any transaction or series of related
transactions in which less than 20% of the Participation Securities to be issued
are purchased by Onex Investors or Affiliates of Onex Investors.
ARTICLE 7
Transfers of Shares
7.1 Transfers in Accordance with this Agreement. The Company may
refuse to register any transfer of Shares on its transfer books if such transfer
is not in accordance with this Agreement and in compliance with state and
federal securities laws.
7.2 Legending of Shares Certificates. The Shares may be
uncertificated. All certificates representing Shares held by any Person subject
to this Agreement (and by any permitted or required transferees who are bound by
or subject to this Agreement) shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD
(WITHIN THE MEANING OF SUCH ACT) IN THE ABSENCE OF
17
REGISTRATION UNDER SUCH ACT OR AN EXEMPTION THEREFROM. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND CERTAIN RESTRICTIONS ON THE
VOTING OF SUCH SECURITIES CONTAINED IN THE INVESTOR STOCKHOLDERS
AGREEMENT, DATED AS OF DECEMBER 27, 2005, AMONG THE ISSUER OF SUCH
SECURITIES (THE "COMPANY") AND CERTAIN OF THE COMPANY'S
STOCKHOLDERS. A COPY OF SUCH INVESTOR STOCKHOLDERS AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST.
7.3 Default of Delivery.
(a) In the event that any Stockholder, the Company, or any
Stockholder's transferees or assignees (each, a "REQUIRING PARTY") have the
right to acquire Shares from any other Stockholder or the right to require any
such other Stockholder to sell any of its Shares to any other Person, pursuant
to the terms of this Agreement (such selling Stockholder hereinafter referred to
as the "TRANSFEROR" and such Requiring Party or any other Person to whom the
Transferor is required to transfer Shares, as applicable, hereinafter referred
to as the "TRANSFEREE") and the Transferor is not present at the closing, or is
present but for any reason fails to produce and deliver to the Transferee the
certificates or other instruments representing any of the Shares being
transferred, then the cash purchase price, as and when payable, may be deposited
into a bank account in the name of the Company and any other consideration
permitted or required to be delivered in satisfaction of the purchase price
shall be deposited with the Company. Such deposits shall constitute valid and
effective payment to the Transferor of the purchase price for the Shares being
transferred notwithstanding the fact that the Transferor may have voluntarily
attempted to encumber or dispose of any of the Shares contrary to the terms
hereof, or that one or more certificates or other evidences of ownership of such
Shares may have been delivered to any other Person. From and after the date of
such deposits (even though the stock certificates in the name of the Transferor
have not been delivered to the Transferee), the purchase by and transfer of the
Shares to the Transferee shall be deemed to have been fully completed and all
right, title, benefit and interest of the Transferor in and to all such Shares,
both at law and in equity, shall be conclusively deemed to have been transferred
and assigned to and become vested in the Transferee and the Transferee will have
the right to request that the Company enter the transfer into the Share register
and the Company shall be entitled to so enter the transfer.
(b) Where the Transferee has made a deposit in accordance with
subsection (a), the Transferor shall be entitled to receive the cash purchase
price of the Shares so deposited with the Company's bankers, and to receive any
other consideration deposited with the
18
Company upon delivery to the Company of (i) the certificates or other
instruments representing the Shares duly endorsed for transfer and (ii) any
other document required to be delivered by the Transferor at closing, including,
without limitation, the release or discharge of any encumbrance relating to the
Shares and stock transfer stamps, if necessary.
ARTICLE 8
Miscellaneous
8.1 Voting Agreement and Appointment of Proxy.
(a) The Other Investors shall at all times vote their Shares (to the
extent they are entitled to vote the same) as specifically provided herein or,
if not so provided, in the same manner as the Shares held by the Majority Onex
Investors are voted, on the election of directors and on all other matters which
are submitted to a vote (or consent in lieu of voting) of the Company's
Stockholders and on which such Shares are entitled to vote. To the extent
permitted by law and for all purposes of this Agreement, each Other Investor, by
its execution of this Agreement, hereby irrevocably constitutes and appoints
Onex Partners and such other Persons as may from time to time be designated by
the Majority Onex Investors, its proxy with full power of substitution to vote
all of its Shares at any meeting of Stockholders of the Company, or to give
consent in lieu of voting on the election of directors and on any matter which
is submitted for a vote or consent to the Stockholders and on which such Shares
are entitled to vote, provided, that such Shares are voted or consent is given
with respect to it as specifically provided herein, or if not so provided, in
the same manner as the Shares held by the Majority Onex Investors. The proxies
and powers granted by the Other Investors pursuant to this Section 8.1 are
coupled with an interest.
(b) Each Stockholder represents that it has not granted and is not a
party to any proxy, voting trust or other agreement which is inconsistent with
or conflicts with the provisions of this Agreement, and no such holder of Shares
shall grant any proxy or become party to any voting trust or other agreement
which is inconsistent with or conflicts with the provisions of this Agreement.
(c) The voting agreement set forth in this Section 8.1 shall
terminate automatically upon an Approved Sale.
8.2 Notices. All notices, consents and other communications required
or permitted to be given under or by reason of this Agreement shall be in
writing, shall be delivered personally or by e-mail or telecopy as described
below or by reputable overnight courier, and shall be deemed given on the date
on which such delivery is made, provided, that any such delivery made on a day
that is not a Business Day, or that is made after 5:00 p.m. on a Business Day,
shall be deemed to be given on the following Business Day. If delivered by
e-mail or telecopy, such notices or communications shall be confirmed by a
registered or certified letter
19
(return receipt requested), postage prepaid. Any such delivery shall be
addressed to the intended recipient at the following addresses (or at such other
address for a party as shall be specified by such party by like notice to the
other parties):
If to the Company or an Onex Investor: c/o Onex Investment Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xx Xxxxx
Fax No.: (000) 000-0000
with a copies to: SHG Holding Solutions, Inc.
00000 Xxxxxxx Xxxxxxx,
Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx
00000
Attention: Chief Executive
Officer
and: Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Fax No.: (000) 000-0000
If to any Other Investor at such Other Investor's address as set
forth on such Other Investor's signature page hereto.
If to any other Person which becomes a party to this Agreement in
accordance with the terms hereof, at the address for delivery of notices or
communications given to all other parties by such party at such time.
8.3 Interpretation. In this Agreement, unless a contrary intention
appears, (a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision, (b) the words "include," "includes" or
"including" shall be deemed to be followed by the words "without limitation,"
(c) reference to any Article or Section means such Article or Section hereof,
(d) words of any gender shall be deemed to include each other gender, and (e)
words using the singular or plural number shall also include the plural or
singular number, respectively. No provision of this Agreement shall be
interpreted or construed against any party hereto solely because such party or
its legal representative drafted such provision.
8.4 Captions. The captions in this Agreement are for convenience of
reference only and shall not be given any effect in the interpretation of this
Agreement.
8.5 Time. Time shall be of the essence of this Agreement.
20
8.6 Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
8.7 Governing Law and Venue. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
regard to the choice of law provisions thereof. Each party to this Agreement
irrevocably submits to the exclusive jurisdiction of the Chancery Court of the
State of Delaware and the United States District Court for the District of
Delaware in connection with any action, suit or proceeding arising out of or
relating to this Agreement, the parties hereto hereby waiving any claim or
defense that such forum is not convenient or proper. If for any reason the
Chancery Court is deemed to be an inappropriate venue for any such action, suit
or proceeding, each party to this Agreement also submits to the exclusive
jurisdiction of the courts of the State for Delaware. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of Delaware (including the
Chancery Court) and the United States District Court from the District of
Delaware, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
8.8 Waiver of Jury Trial. Each party acknowledges and agrees that
any controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each party hereby irrevocably
and unconditionally waives any right such party may have to a trial by jury in
respect of any litigation directly or indirectly arising out of or relating to
this Agreement, or the breach, termination or validity of this Agreement, or the
transactions contemplated hereby. Each party certifies and acknowledges that (a)
no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver, (b) each such party
understands and has considered the implications of this waiver, (c) each such
party makes this waiver voluntarily, and (d) each such party has been induced to
enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 8.8.
8.9 Assignment. This Agreement shall be binding upon the parties
hereto, all Stockholders and, to the extent expressly provided elsewhere in this
Agreement, their respective permitted transferees and assigns (other than
purchasers of equity securities pursuant to a Public Sale), together with in
each case all successors, heirs, executors and administrators thereof, and shall
inure to the benefit of the parties hereto, all Stockholders and, to the extent
expressly provided elsewhere in this Agreement, assigns of the Stockholders,
together, in each case, with all successors, heirs, executors and administrators
thereof. Except as otherwise provided herein, no party may assign any of its
rights or delegate any of its duties under this Agreement.
21
8.10 Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement will be
effective unless such modification, amendment or waiver is approved in writing
by the Company, the Majority Onex Investors and Other Investors holding a
majority of the Shares held by all Other Investors, provided, that a
modification, amendment or waiver of Section 4.3(b) as to any Other Investor may
be authorized by such Other Investor and the Board. The failure of a party to
insist upon strict adherence to any term of this Agreement on any occasion shall
not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
No purported waiver shall be effective unless in writing. The waiver by any
party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent or other breach.
8.11 Remedies. The parties shall be entitled to enforce their rights
under this Agreement specifically to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights existing in
their favor. The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any breach of the provisions of this Agreement and
that any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or temporary, preliminary or
permanent injunctive relief (without posting a bond or other security) in order
to enforce or prevent any violation of the provisions of this Agreement.
8.12 Counterparts; Joinder. This Agreement may be executed in
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same instrument. Additional Persons may
become parties to this Agreement in accordance with the provisions of this
Agreement or with the consent of the Company and the Majority Onex Investors, in
either case by executing and delivering to the Company a joinder agreement.
8.13 Complete Agreement. This Agreement, the documents expressly
referred to herein (including the Registration Agreement) and other documents of
even date herewith embody the complete agreement and understanding among the
parties and supersede and preempt any prior understanding, agreements or
representations by or among the parties, written or oral, that may be related to
the subject matter hereof in any way.
22
[Signature Pages Follows]
23
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto, all as of the date first above written.
SHG HOLDING SOLUTIONS, INC.
By: /s/ Xxxxxx X. Xx Xxxxx
-------------------------
Name: Xxxxxx X. Xx Xxxxx
Title: President
[Signature Page to Investor Equityholders Agreement]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
ONEX PARTNERS LP
By: Onex Partners GP LP, its General Partner
By: Onex Partners GP Inc., its General Partner
By: /s/ Xxxxxx X. Xx Xxxxx
-------------------------------------
Name: Xxxxxx X. Xx Xxxxx
Title: President
By: /s/ Xxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
Address:
Onex Partners LP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
ONEX US PRINCIPALS LP
By: Onex American Holdings GP LLC, its General
Partner
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: Representative
By:
-------------------------------------
Name: Xxxxxx Xx Xxxxx
Title: Representative
Address:
Onex US Principals LP
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
EN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
ONEX US PRINCIPALS LP
By: Onex American Holdings GP LLC, its General
Partner
By:
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: Representative
By: /s/ Xxxxxx Xx Xxxxx
-------------------------------------
Name: Xxxxxx Xx Xxxxx
Title: Representative
Address:
Onex US Principals LP
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the undersigned Investor as of the date first written above.
ONEX AMERICAN HOLDINGS II LLC
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: Director
Address:
Onex American Holdings II LLC
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
SKILLED EXECUTIVE INVESTCO LLC
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: Director
Address:
Onex American Holdings II LLC
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxxxx Xxxx
-------------------------------------
For: XXXXX XXXXXXXX L.L.C.
Address:
0000 Xxxxxxxxxxxxx Xxx., X.X.
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx Xxxx
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxxx X. Xxxxx
-------------------------------------
XXXXX X. XXXXX
Address:
00 Xxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
XXXXXX XXXXXXX
Address:
00000 Xxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the undersigned Investor as of the date first written above.
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
XXXXXXX X. XXXXXX
Address:
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxx, XX
00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxx X. Xxxxxxxxx
-------------------------------------
XXXX X. XXXXXXXXX
Address:
c/o Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxxxxx Xxxxx
-------------------------------------
XXXXXXX XXXXX
Address:
00 Xxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
XXXXXX X. XXXXXXX
Address:
00 Xxxxx Xxxxx
Xxxx, Xxxxxxxxxxx 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto, all as of the date first above written.
INVESTOR:
CARIAD INVESTMENT HOLDINGS LTD,
By: /s/ Xxxxx Xxxxxxx, Asst. Secretary
-------------------------------------
Name: XXXXX XXXXXXX
Title: Asst. Secretary
[Signature Page to Investor Stockholders Agreement]
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto, all as of the date first above written.
INVESTOR:
GRANITE INVESTMENTS, LP, by MKD Investment
Company, LLC its general partner
By: /s/ Xxxxxx Xxxxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Managing Member
[Signature Page to Investor Stockholders Agreement]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxxxxx Xxxxx
-------------------------------------
XXXXXXX XXXXX
Address:
00000 Xxxxxxxxxx Xx.
Xxx Xxxxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxxx Xxxxxx
-------------------------------------
XXXXX XXXXXX
Address:
c/o Skilled Healthcare Group, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxx Xxxx
-------------------------------------
XXXX XXXX
Address:
c/o Skilled Healthcare Group, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
rsigned Investor as of the date first written above.
/s/ Xxxxx Parades
-------------------------------------
XXXXX PARADES
Address:
c/o Skilled Healthcare Group, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxx X. Xxxxxx
-------------------------------------
BAYLOR HEALTHCARE SYSTEM
Xxxx X. Xxxxxx, Treasurer
Address:
0000 Xxxxx Xx. Xxx. 0000
Xxxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxxxx Xxxx
-------------------------------------
XXXXXX XXXX
Address:
c/o Skilled Healthcare Group, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above,
/s/ Xxxx Xxxxxxxxxxx
-------------------------------------
XXXX XXXXXXXXXXX
Address:
c/o Skilled Healthcare Group, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned Investor as of the date first written above.
/s/ Xxxx Xxxxx
-------------------------------------
XXXX XXXXX
Address:
c/o Skilled Healthcare Group, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the undersigned Investor as of the date first written above.
/s/ Xxxx Xxxxxxx
-------------------------------------
XXXX XXXXXXX
Address:
c/o Skilled Healthcare Group, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE
TO INVESTOR STOCKHOLDERS AGREEMENT]
