EXHIBIT 1
to SCHEDULE 13D
VOTING AGREEMENT
This VOTING AGREEMENT (this "AGREEMENT") is made and entered into as of
May 14, 2002 between WellCare Acquisition Company, a Delaware corporation
("PARENT"), and the undersigned shareholder (the "SHAREHOLDER") of The WellCare
Management Group, Inc., a New York corporation (the "COMPANY"). Capitalized
terms used and not otherwise defined herein shall have the respective meanings
set forth in the Merger Agreement (as defined below).
RECITALS
A. Pursuant to an Agreement and Plan of Merger dated on or about
the date herewith and attached as Exhibit A hereto (the "MERGER AGREEMENT")
among Parent, WellCare Merger Sub, Inc., a New York corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB"), and the Company, Merger Sub
will be merged with and into the Company and the shareholders of the Company
will receive cash as set forth in the Merger Agreement (the "MERGER").
B. As a condition to, and in consideration for, Parent's
willingness to enter into the Merger Agreement and to consummate the Merger,
Parent has required that the Shareholder enter into this Agreement.
C. The Shareholder is the owner of the number of shares of the
Company's Common Stock and/or the Company's Class A Common Stock indicated on
the signature page of this Agreement (collectively, the "SHARES").
NOW, THEREFORE, in consideration of the covenants and promises
set forth herein, and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), intending to be legally bound
hereby, the Shareholder and Parent agree as follows:
1. AGREEMENT TO RETAIN SHARES. Unless specifically required by
court order or operation of law, in which case the transferee shall agree to be
bound by this Agreement as if it were the Shareholder hereunder, the Shareholder
agrees not to transfer, sell, exchange, pledge or otherwise dispose of or
encumber any Shares or New Shares (as hereinafter defined), or any interest
therein, or to make any offer or enter into any agreement relating thereto, at
any time prior to the earliest to occur of (i) the Effective Time, (ii) the
termination of the Merger Agreement in accordance with the terms thereof and
(iii) December 31, 2002 (the "EXPIRATION DATE").
2. AGREEMENT TO VOTE SHARES AND TAKE CERTAIN OTHER ACTIONS.
(a) Prior to the Expiration Date, at every meeting of the
shareholders of the Company at which any of the following matters is considered
or voted upon, and at every adjournment or postponement thereof, and on every
action or approval by written consent of the shareholders of the Company with
respect to any of the following matters, the Shareholder shall vote the Shares
and any New Shares: (i) in favor of the adoption of the Merger Agreement and the
terms thereof, and each of the other transactions contemplated by the Merger
Agreement, and any matter which would, or could reasonably be expected to,
facilitate the Merger or any of the transactions contemplated by the Merger
Agreement; (ii) against approval of any proposal made in opposition to or in
competition with the consummation of the Merger or the Merger Agreement; (iii)
against any competing proposed transaction involving the Company or either
Company Subsidiary; (iv) against any liquidation or winding up of the Company;
and (v) against any other proposal or action which would, or could reasonably be
expected to, prohibit or discourage the Merger (each of (ii) through (v) is
hereinafter referred to as an "OPPOSING PROPOSAL").
(b) Prior to the Expiration Date, the Shareholder, as the
holder of voting stock of the Company, shall be present, in person or by proxy,
at all meetings of shareholders of the Company at which any matter referred to
in this Section 2 is to be voted upon so that all Shares and New Shares are
counted for the purposes of determining the presence of a quorum at such
meetings.
(c) This Agreement is intended to bind the Shareholder
only with respect to the specific matters set forth herein, and shall not
prohibit the Shareholder from acting in accordance with the Shareholder's
fiduciary duties as an officer or director of the Company, to the extent
applicable.
3. IRREVOCABLE PROXY. The Shareholder hereby agrees to timely
deliver to Parent a duly executed proxy in the form attached hereto as ANNEX A
(the "PROXY"), such Proxy to cover the Shares and all New Shares in respect of
which the Shareholder is entitled to vote at any meeting of the shareholders of
the Company (including, without limitation, each written consent in lieu of a
meeting) prior to the Expiration Date. In the event that the Shareholder is
unable to provide any such Proxy in a timely manner, the Shareholder hereby
grants Parent a power of attorney to execute and deliver such Proxy for and on
behalf of the Shareholder, such power of attorney, being coupled with an
interest, shall survive any death, disability, bankruptcy, or any other such
impediment of the Shareholder. Upon the execution of this Agreement by he
Shareholder, the Shareholder hereby revokes any and all prior proxies or powers
of attorney given by the Shareholder with respect to the voting of the Shares
and agrees not to, prior to the Expiration Date, (a) grant any subsequent
proxies or powers of attorney with respect to the voting of the Shares, (b)
deposit any of the Shares into a voting trust, or (c) enter into a voting
agreement with respect to any of the Shares.
4. NEW SHARES. The Shareholder agrees that any shares of capital
stock or voting securities of the Company that the Shareholder purchases or with
respect
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to which the Shareholder otherwise acquires beneficial ownership after the date
of this Agreement and prior to the Expiration Date ("NEW SHARES") shall be
subject to the terms and conditions of this Agreement to the same extent as if
they constituted Shares and to the extent that the nature of the Shareholder's
beneficial ownership of such Shares enables the Shareholder to grant such rights
with respect thereto.
5. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER. The Shareholder
represents and warrants to Parent that (a) the Shareholder is a record or
beneficial owner of the Shares, with power to vote the Shares or cause the
Shares to be voted; (b) the Shares constitute the Shareholder's entire interest
in the outstanding capital stock and voting securities of the Company, other
than Shares that are subject to employee stock options or other rights to
acquire capital stock of the Company; (c) no other person or entity not a
signatory to this Agreement has a beneficial interest in or a right to acquire
the Shares or any portion of the Shares; (d) the Shares are, and will be at all
times up until the Expiration Date, free and clear of any liens, claims,
options, charges or other encumbrances; (e) the Shareholder's address is
accurately set forth on the signature page hereto; (f) the Shareholder has full
power and legal capacity to execute and deliver this Agreement and to perform
his or her obligations hereunder; (g) this Agreement has been duly and validly
executed and delivered by the Shareholder and constitutes the valid and binding
obligation of the Shareholder, enforceable against the Shareholder in accordance
with its terms, except as may be limited by (i) the effect of bankruptcy,
insolvency, conservatorship, arrangement, moratorium or other laws affecting or
relating to the rights of creditors generally or (ii) the rules governing the
availability of specific performance, injunctive relief or other equitable
remedies and general principles of equity, regardless of whether considered in a
proceeding in equity or at law; and (h) the execution and delivery of this
Agreement by the Shareholder does not, and the performance of the Shareholder's
obligations hereunder will not, result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any right to terminate, amend, accelerate or cancel any
right or obligation under, or result in the creation of any lien or encumbrance
on any Shares or New Shares pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Shareholder is a party or by which the Shareholder or
the Shares of New Shares are or will be bound or affected.
6. ADDITIONAL AGREEMENTS AND COVENANTS OF SHAREHOLDER.
(a) The Shareholder waives, as of the date hereof, any
claims it may have in its capacity as a shareholder of the Company.
(b) Subject to Section 2(c), until the Expiration Date,
the Shareholder will not: (i) solicit, initiate, encourage or take any other
action to facilitate, directly or indirectly, any Opposing Proposal; (ii)
initiate, directly or indirectly, any contact with any Person in an effort to or
with a view towards soliciting any Opposing Proposal; (iii) furnish information
concerning the business, properties or assets of the Company or either Company
Subsidiary to any Person or other entity or group (other than Parent, or any
associate, agent or representative of Parent) under any circumstances
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that could reasonably be expected to relate an actual or potential Opposing
Proposal; (iv) negotiate or enter into discussions or any agreement, directly or
indirectly, with any entity or group with respect to any potential Opposing
Proposal; or (v) otherwise cooperate in any way with, or assist or participate
in any effort or attempt by any Person with respect to any Opposing Proposal.
(c) The Shareholder agrees not to take any action that
would make any representation or warranty of the Shareholder contained herein
untrue or incorrect or have the effect of impairing the ability of the
Shareholder to perform his or her obligations under this Agreement or preventing
or delaying the consummation of any of the transactions contemplated hereby or
by the Merger Agreement.
(d) The Shareholder understands and agrees that if the
Shareholder attempts to transfer, vote or provide any other Person with the
authority to vote any of the Shares or New Shares other than in compliance with
this Agreement, the Company shall not, and the Shareholder hereby
unconditionally and irrevocably instructs the Company not to, permit any such
transfer on its books and records, issue a new certificate representing any of
the Shares or New Shares or record such vote unless and until the Shareholder
shall have complied with the terms of this Agreement.
7. ADDITIONAL DOCUMENTS. The Shareholder hereby covenants and
agrees to execute and deliver any additional documents necessary or desirable,
in the reasonable opinion of Parent, to carry out the purpose and intent of this
Agreement.
8. CONSENT AND WAIVER. The Shareholder hereby gives any consents
or waivers that are reasonably required for the consummation of the Merger under
the terms of any agreement to which the Shareholder is a party or pursuant to
any rights the Shareholder may have.
9. TERMINATION. This Agreement and the Proxy delivered in
connection herewith, and all obligations of the Shareholder hereunder and
thereunder, shall terminate and shall have no further force or effect after the
Expiration Date.
10. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; MODIFICATION. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
This Agreement may be amended or modified only by an instrument in writing duly
executed by the parties to this Agreement.
(b) SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. The parties
hereto acknowledge that Parent will be irreparably harmed and that there will be
no adequate remedy at law for a violation of any of the covenants or agreements
of the Shareholder set forth herein. Therefore, it is agreed that, in addition
to any other remedies that may be available to Parent upon any such violation,
Parent shall have the right to enforce such
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covenants and agreements by specific performance, injunctive relief or by an
other means available to Parent at law or in equity and the Shareholder hereby
waives any and all defenses which could exist in its favor in connection with
such enforcement and waives any requirement for the security or posting of any
bond in connection with such enforcement.
(c) NOTICES. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally against written receipt or by facsimile
transmission against facsimile confirmation or mailed by internationally
recognized overnight courier prepaid, to the parties at the following addresses
or facsimile numbers:
If to Parent, to:
WellCare Acquisition Company
00 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx Xxxxx
With a copy to:
Xxxxxxx, Phleger & Xxxxxxxx, LLP
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxxx Xxxxxxx, Esq.
If to the Shareholder to:
The 1818 Fund II, LP
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
With a copy to:
Xxxxx & Lardner
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 10(c), be deemed given
upon delivery, (ii) if delivered by facsimile transmission to the facsimile
number as provided for in this Section 10(c),
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be deemed given upon facsimile confirmation, and (iii) if delivered by overnight
courier to the address as provided in this Section 10(c), be deemed given on the
earlier of the first Business Day following the date sent by such overnight
courier or upon receipt (in each case regardless of whether such notice, request
or other communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section 10(c). Any party from time to
time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the
other party hereto.
(d) BINDING EFFECT. This Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
(e) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York.
(f) JURISDICTION; VENUE. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined in
any New York state or federal court sitting in the City of New York, and each
party hereby irrevocably accepts and consents to the exclusive personal
jurisdiction of those courts for such purpose. In addition, each party hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of venue of any action or proceeding
arising out of or relating to this Agreement or any judgment entered by any
court in respect thereof brought in any state or federal court sitting in the
city of New York and further irrevocably waives any claim that any action or
proceeding brought in any such court has been brought in an inconvenient forum.
(g) WAIVER OF TRIAL BY JURY. IN ANY ACTION OR PROCEEDING
ARISING HEREFROM, THE PARTIES HERETO CONSENT TO TRIAL WITHOUT A JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER
OR THEIR SUCCESORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT. REGARDLESS OF THE FORM OF ACTION OR PROCEEDING.
(h) SEVERABILITY. Any term or provision of this Agreement
that is invalid, illegal or unenforceable in any situation in any jurisdiction
shall not affect the validity, legality or enforceability of the offending term
or provision in any other situation or in any other jurisdiction. If such
invalidity, illegality or unenforceability is caused by length of time or size
of area, or both, the otherwise invalid provision shall be, without further
action by the parties, automatically amended to such reduced period or are as
would cure such invalidity, illegality or unenforceability; PROVIDED, HOWEVER,
that such amendment shall apply only with respect to the operation of such
provision in the particular jurisdiction in which such determinations is made.
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(i) INTERPRETATION. The parties hereto agree that this
Agreement is the product of negotiation between sophisticated parties and
individuals, all of whom were represented by counsel, and each of whom had an
opportunity to participate in and did participate in, the drafting of each
provision hereof. Accordingly, ambiguities in this Agreement, if any, shall not
be construed strictly or in favor of or against any party hereto but rather
shall be given a fair and reasonable construction.
(j) HEADINGS. The headings and table of contents used in
this Agreement have been inserted for convenience of reference only and do not
define or limit the provisions hereof.
(k) COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Parent and the Shareholder executed this
Agreement as of the date first written above.
WELLCARE ACQUISITION COMPANY THE 1818 FUND II, LP
By its General Partner, Xxxxx
By: /s/ Xxxx Xxxxx Brothers Xxxxxxxx & Co.
------------------------------------
Xxxx Xxxxx
President and Chief Executive Officer By: /s/ T. Xxxxxxx Xxxx
-------------------------------
T. Xxxxxxx Xxxx
Partner
Total Number of Shares of the Company's Common Stock owned directly on the date
hereof:
11,250,000
Total Number of Shares of the Company's Class A Common Stock owned directly on
the date hereof:
________________________
[SIGNATURE PAGE TO VOTING AGREEMENT]
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ANNEX A
-------
IRREVOCABLE PROXY
TO VOTE STOCK OF
THE WELLCARE MANAGEMENT GROUP, INC.
The undersigned shareholder of The WellCare Management Group,
Inc., a New York corporation (the "COMPANY"), hereby irrevocably appoints the
members of the Board of Directors of WellCare Acquisition Company, a Delaware
corporation ("PARENT"), and each of them, or any other designee of Parent, as
the sole and exclusive attorneys and proxies of the undersigned, with full power
of substitution and resubstitution, to vote and exercise all voting rights (to
the full extent that the undersigned is entitled to do so) with respect to (i)
all of the issued and outstanding shares of capital stock of the Company that
now are owned of record by the undersigned and (ii) any and all other shares of
capital stock of the Company which the undersigned may acquire on or after the
date hereof (collectively, the "SHARES") in accordance with the terms of this
Irrevocable Proxy. The Shares owned of record by the undersigned shareholder of
the Company as of the date of this Irrevocable Proxy are listed on the final
page of this Irrevocable Proxy. Upon the undersigned's execution of this
Irrevocable Proxy, any and all prior proxies given by the undersigned with
respect to the voting of any Shares are hereby revoked and the undersigned
agrees not to grant any subsequent proxies with respect to such Shares until
after the Expiration Date (as defined below).
This Irrevocable Proxy is irrevocable (to the fullest extent
permitted by law), is coupled with an interest, and is granted in consideration
of Parent entering into that certain Agreement and Plan of Merger dated May 14,
2002 in the form attached hereto (the "MERGER AGREEMENT") by and among Parent,
WellCare Merger Sub, Inc., a New York corporation ("MERGER SUB"), and the
Company, which Merger Agreement provides for the merger of Merger Sub with and
into the Company (the "MERGER"). As used herein, the term "EXPIRATION DATE"
shall mean the earliest to occur of (i) such date and time as the Merger shall
become effective in accordance with the terms and provisions of the Merger
Agreement, (ii) the termination of the Merger Agreement in accordance with the
terms thereof and (iii) December 31, 2002.
The attorneys and proxies named above, and each of them, are
hereby authorized and empowered by the undersigned, at any time prior to the
Expiration Date, to act as the undersigned's attorney and proxy to vote the
Shares, and to exercise all voting rights of the undersigned with respect to the
Shares (including, without limitation, the power to execute and deliver written
consents), at every annual, special or adjourned meeting of the shareholders of
the Company and in every written consent in lieu of such meeting: (i) in favor
of the adoption of the Merger Agreement and the terms thereof, and each of the
other transactions contemplated by the Merger Agreement, and any matter which
would, or could reasonably be expected to, facilitate the Merger or any of the
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transactions contemplated by the Merger Agreement; (ii) against approval of any
proposal made in opposition to or in competition with the consummation of the
Merger or the Merger Agreement; (iii) against any competing proposed transaction
(as defined in the Merger Agreement) involving the Company or any subsidiary of
the Company; (iv) against any liquidation or winding up of the Company; and (v)
against any other proposal or action which would, or could reasonably be
expected to, prohibit or discourage the Merger.
The attorneys and proxies named above may not exercise this
Irrevocable Proxy on any other matter except as provided above. The undersigned
shareholder may vote the Shares on all other matters.
All authority herein conferred shall survive the death or
incapacity of the undersigned and any obligation of the undersigned hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned.
Dated: May 14, 2002
The 1818 Fund II, LP
By its General Partner, Xxxxx Brothers
Xxxxxxxx & Co.
By: /s/ T. Xxxxxxx Xxxx
---------------------------------------
T. Xxxxxxx Xxxx
Partner
Shares owned of record:
11,250,000 shares of Common Stock of the Company
__________________________ shares of Class A Common Stock of the Company
[SIGNATURE PAGE TO IRREVOCABLE PROXY]
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