EXHIBIT 99.2
SUPPORT AGREEMENT
EXECUTION COPY
SUPPORT AGREEMENT dated as of April 19, 1998, among KAPSON
SENIOR QUARTERS CORP., a Delaware corporation ("Parent"), KA
ACQUISITION CORP., a Delaware corporation ("Sub"), Vencor, Inc.,
a Delaware corporation ("Vencor), and Vencor Assisted Living
Holdings, Inc., a Delaware corporation ("VALH") (each of Vencor
and VALH, a "Stockholder" and, collectively, the "Stockholders").
WHEREAS, Parent, Sub and Atria Communities, Inc., a Delaware
corporation (the "Company"), propose to enter into an Agreement and Plan of
Merger dated as of the date hereof (as the same may be amended or supplemented,
the "Merger Agreement"; capitalized terms used but not defined herein shall have
the meanings set forth in the Merger Agreement) providing for the merger of Sub
with and into the Company;
WHEREAS, pursuant to the Merger Agreement, the outstanding capital
stock of Sub will be converted into 11,111,111 shares of Common Stock of the
Surviving Corporation and the Stockholders will retain 1,234,568 shares of
Common Stock of the Surviving Corporation;
WHEREAS, each Stockholder owns the number of shares of Common Stock
set forth opposite its name on Schedule A hereto (such shares of Common Stock,
together with any other shares of capital stock of the Company acquired by such
Stockholder after the date hereof and during the term of this Agreement, being
collectively referred to herein as the "Subject Shares" of such Stockholder);
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent and Sub have requested that each Stockholder enter into this
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Representations and Warranties of Each Stockholder. Each
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Stockholder hereby represents and warrants to Parent and Sub as of the date
hereof as follows:
(a) Authority; Execution and Delivery; Enforceability. The
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Stockholder has all requisite corporate power and authority to execute this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery by the Stockholder of this Agreement and consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Stockholder. The Stockholder has duly
executed and delivered this Agreement, and this
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Agreement constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights generally
from time to time in effect and to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law).
The execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated hereby and compliance with the provisions of this
Agreement will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancelation or acceleration of any obligation or to loss
of a material benefit under, or result in the creation of any Lien upon any of
the properties or assets of the Stockholder or any of its subsidiaries under,
(i) the Certificate of Incorporation or By-laws of the Stockholder or the
comparable charter or organizational documents of any of its subsidiaries, (ii)
any loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable to
the Stockholder or any of its subsidiaries or their respective properties or
assets or (iii) subject to the governmental filings and other matters referred
to in the following sen tence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Stockholder or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii), any such conflicts, violations, defaults, rights,
losses or Liens that individually or in the aggregate would not (x) have a
Material Adverse Effect on the Stockholder, (y) impair the ability of the
Stockholder to perform their respective obligations under this Agreement or (z)
prevent the consummation of any of the Transactions. No consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to the Stockholder or any of
its subsidiaries in connection with the execution and delivery of this Agreement
by the Stockholder or the consummation by the Stockholder of transactions
contemplated hereby, except for the filing with the SEC of such reports under
Section 13(d) and 16(a) of the Exchange Act as may be required in connection
with the Agreement and the transactions contemplated hereby.
(b) The Subject Shares. The Stockholder is the record and/or
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beneficial owner of, and has good and valid title to, the Subject Shares, free
and clear of any Liens. The Stockholder does not own, of record or beneficially,
any shares of capital stock of Company other than the Subject Shares. The
Stockholder has the sole right to vote the Subject Shares, and none of the
Subject Shares is subject to any voting trust or other agreement, arrangement or
restriction with respect to the voting of the Subject Shares, except as
contemplated by this Agreement.
SECTION 2. Representations and Warranties of Parent and Sub. Parent
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and Sub hereby represent and warrant to each Stockholder as follows: Parent and
Sub have all requisite corporate power and authority to enter into this
Agreement and to
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consummate the Transactions. The execution and delivery of this Agreement and
the consummation of the Transactions have been duly authorized by all necessary
corporate action on the part of Parent and Sub. This Agreement has been duly
executed and delivered by Parent and Sub and constitutes a valid and binding
obligation of such party, enforceable against such party in accordance with its
terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights generally
from time to time in effect and to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law).
The execution and delivery of the Operative Agreements do not, and the
consummation of the Transactions and compliance with the provisions of the
Operative Agreements will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancelation or acceleration of any obligation or to
loss of a material benefit under, or result in the creation of any Lien upon any
of the properties or assets of Parent or Sub under, (i) the certificate of
incorporation or by-laws (or other comparable organizational documents) of
Parent or Sub, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or Sub or their respective properties or assets
or (iii) subject to the governmental filings and other matters referred to in
the following sentence, any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Parent or Sub, other than, in the case of
clauses (ii) and (iii), any such conflicts, violations, defaults, rights, losses
or Liens that individually or in the aggregate would not (x) have a Material
Adverse Effect on Parent, (y) impair the ability of Parent and Sub to perform
their respective obligations under this Agreement or (z) prevent the
consummation of any of the Transactions. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to Parent or Sub in connection with the
execution and delivery of this Agreement or the consummation by Parent or Sub,
as the case may be, of any of the Transactions, except for (i) the filing with
the SEC of the Proxy Materials and such reports under Sections 13 and 16(a) of
the Exchange Act as may be required in connection with the Operative Agreement
and the Transactions, (ii) the filing of the Certificate of Merger with the
Delaware Secretary of State and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business,
(iii) such filings as may be required in connection with the taxes described in
Section 6.10 of the Merger Agreement and (iv) such other consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under the "takeover" or "blue sky" laws of various states.
SECTION 3. Covenants of Each Stockholder. Subject to Section 5
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hereof, each Stockholder covenants and agrees as follows:
(a) The Stockholder hereby permits the Company, Parent and Sub to
publish and disclose in the Proxy Materials (including all documents and
schedules filed
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with the SEC) its identity and ownership of the Subject Shares and the nature of
its commitments, arrangements and understandings under this Agreement.
(b) (1) At any meeting of the stockholders of the Company called to
seek the approval of the Merger Agreement and the Merger (the "Company
Stockholder Approval") or in any other circumstances upon which a vote, consent
or other approval with respect to the Merger Agreement, any other Operative
Agreement, the Merger or any other Transaction is sought, the Stockholder shall
vote (or cause to be voted) the Subject Shares in favor of granting the Company
Stockholder Approval.
(2) The Stockholder hereby irrevocably grants to, and appoints,
Parent, Robert P. Freeman and Murry N. Gunty, or any of them, and any individual
designated in writing by any of them, and each of them individually, as the
Stockholder's proxy and attorney-in-fact (with full power of substitution), for
and in the name, place and stead of the Stockholder, to vote the Subject Shares,
or grant a consent or approval in respect of the Subject Shares in a manner
consistent with this Section 3. The Stockholder understands and acknowledges
that Parent is entering into the Merger Agreement in reliance upon the
Stockholder's execution and delivery of this Agreement. The Stockholder hereby
affirms that the irrevocable proxy set forth in this Section 3(b) is given in
connection with the execution of the Merger Agreement, and that such irrevocable
proxy is given to secure the performance of the duties of the Stockholder under
this Agreement. The Stockholder hereby further affirms that the irrevocable
proxy is coupled with an interest and may under no circumstances be revoked,
except as provided herein. The Stockholder hereby ratifies and confirms all
that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212(e) of the DGCL. The irrevocable
proxy granted hereunder shall automatically terminate upon the termination of
Sections 3(b) and 3(c).
(c) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the Stockholder's
vote, consent or other approval is sought, the Stockholder shall vote (or cause
to be voted) the Subject Shares against (i) any merger agreement or merger
(other than the Merger Agreement and the Merger), consolidation, combination,
sale of substantial assets, reorganization, recapitalization, dissolution,
liquidation or winding up of or by Company, (ii) any "takeover proposal" (as
defined in the Merger Agreement) and (iii) any amendment of the certificate of
incorporation or by-laws of the Company or other proposal or transaction
involving the Company or any of its subsidiaries, which amendment or other
proposal or transaction would in any manner impede, frustrate, prevent or
nullify any provision of any Operative Agreement, the Merger or any other
Transaction or change in any manner the voting rights of any class of capital
stock of the Company. The Stockholder shall not commit or agree to take any
action inconsistent with the foregoing.
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(d) Other than this Agreement, the Stockholder shall not (i) sell,
transfer, pledge, assign or otherwise dispose of (including by gift)
(collectively, "Transfer"), or enter into any agreement, option or other
arrangement (including any profit sharing arrangement) with respect to the
Transfer of, any Subject Shares to any person other than pursuant to the Merger
or (ii) enter into any voting arrangement, whether by proxy, voting agreement or
otherwise, with respect to any Subject Shares and shall not commit or agree to
take any of the foregoing actions. Notwithstanding the foregoing, the
Stockholder may Transfer the Subject Shares to the Vencor Operating Company (as
defined below) or one of its wholly owned subsidiaries in connection with the
transactions described in the Vencor Proxy Statement (as defined below);
provided, however, that the Vencor Operating Company (or such subsidiary, if
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applicable) shall execute and deliver to Parent a supplement to this Agreement
agreeing to be bound by the terms hereof. "Vencor Operating Company" means the
corporation referred to as the "Operating Company" in the Vencor Proxy
Statement. The "Vencor Proxy Statement" means definitive proxy statement
included in the Schedule 14A of Vencor, as amended, filed with the Securities
and Exchange Commission on March 26, 1998.
(e) The Stockholder shall not, nor shall it authorize or permit any
officer, director or employee of, or any investment banker, attorney or other
adviser or representative of, the Stockholder to, (i) directly or indirectly
solicit, initiate or encourage the submission of, any takeover proposal, (ii)
enter into any agreement with respect to any takeover proposal or (iii) directly
or indirectly participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any takeover proposal. The Stockholder
promptly shall advise Parent orally and in writing of any takeover proposal or
inquiry made to the Stockholder with respect to or that could reasonably be
expected to lead to any takeover proposal and the material terms of any such
takeover proposal or inquiry.
(f) The Stockholder shall use its reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other Transactions.
(g) The Stockholder hereby consents to and approves the actions taken
by the Board of Directors of the Company in approving the Merger Agreement, the
Merger and the other Transactions. The Stockholder hereby waives, and agrees
not to exercise or assent, any appraisal rights under Section 262 in connection
with the Merger.
SECTION 4. [Intentionally Omitted]
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SECTION 5. Termination. This Agreement shall terminate upon the
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earliest of (i) the Effective Time, (ii) the termination of the Merger
Agreement in accordance with its terms and (iii) the Outside Date, other than
with respect to the liability of any party for breach hereof prior to such
termination.
SECTION 6. Additional Matters. (a) The Stockholder shall, from time
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to time, execute and deliver, or cause to be executed and delivered, such
additional or further consents, documents and other instruments as Parent may
reasonably request for the purpose of effectively carrying out the transactions
contemplated hereby.
(b) Concurrently with the Closing of the Merger, each Stockholder and
Parent shall enter into the Shareholders and Registration Rights Agreement, in
the form attached as Exhibit A hereto.
(c) No Stockholder shall be deemed to make any agreement or
understanding herein with respect to any director or officer of such Stockholder
in his or her capacity as a director or officer of the Company. Each
Stockholder signs solely in its capacity as the record holder and beneficial
owner of, or the trustee of a trust whose beneficiaries are the beneficial
owners of, such Stockholder's Subject Shares and nothing herein shall limit or
affect any actions taken by any director or officer of such Stockholder in his
or her capacity as a director or officer of the Company (to the extent not
specifically prohibited by the Merger Agreement).
SECTION 7. General Provisions.
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(a) Amendments. This Agreement may not be amended except by an
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instrument in writing signed by each of the parties hereto and consented to by
the Company.
(b) Notice. All notices and other communications hereunder shall be
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in writing and shall be deemed given if delivered personally or sent by
overnight courier (providing proof of delivery) to Parent or Sub in accordance
with Section 9.02 of the Merger Agreement and to the Stockholder at its address
set forth on Schedule A hereto (or at such other address for a party as shall be
specified by like notice).
(c) Interpretation. When a reference is made in this Agreement to
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Sections, such reference shall be to a Section to this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Wherever the words "include", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation".
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(d) Severability. If any term or other provision of this Agreement
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is invalid, illegal or incapable of being enforced by any rule or law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
(e) Counterparts. This Agreement may be executed in one or more
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counterparts, all of which shall be considered one and the same agreement. This
Agreement shall become effective against Parent and Sub when one or more
counterparts have been signed by Parent and Sub and delivered to each
Stockholder. This Agreement shall become effective against any Stockholder when
one or more counterparts have been executed by such Stockholder and delivered to
Parent and Sub. Each party need not sign the same counterpart.
(f) Entire Agreement; No Third-Party Beneficiaries. This Agreement
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(i) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (ii) is not intended to confer upon any person other
than the parties hereto (and, with respect to Section 7(a) and (h) only, the
Company) any rights or remedies hereunder.
(g) Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of Delaware regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof.
(h) Assignment. Neither this Agreement nor any of the rights,
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interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise, (i) by Parent or Sub without the prior
written consent of the Stockholders and the Company (except that Parent or Sub
may assign, in its sole discretion, its rights and obligations hereunder to any
affiliate of Parent, but no such assignment shall relieve Parent or Sub of its
obligations hereunder without the consent of the Stockholders and the Company)
or (ii) by any Stockholder without the prior written consent of Parent and the
Company (except that any Stockholder may assign, in its sole discretion, its
rights and obligations hereunder to the Vencor Operating Company or one of its
wholly owned subsidiaries in connection with any Transfer permitted by the last
sentence of Section 3(d), but no such assignment shall relieve such Stockholder
of its obligations hereunder without the consent of Parent and the Company), and
any purported assignment without such consent shall be void. Subject to the
preceding sentences, this
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Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and permitted assigns.
(i) Enforcement. The parties agree that irreparable damage would
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occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any New York state court, any
Federal court located in the State of New York or the State of Delaware or in
any Delaware state court, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties hereto
(i) consents to submit itself to the personal jurisdiction of any New York state
court, any Federal court located in the State of New York or the State of
Delaware or any Delaware state court in the event any dispute arises out of this
Agreement or any Transaction, (ii) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (iii) agrees that it will not bring any action relating to this
Agreement or any Transaction in any court other than a New York state court, any
Federal court sitting in the State of New York or the State of Delaware or any
Delaware state court and (iv) waives any right to trial by jury with respect to
any claim or proceeding related to or arising out of this Agreement or any
transaction contemplated hereby.
IN WITNESS WHEREOF, each party has duly executed this Agreement, all
as of the date first written above.
KAPSON SENIOR QUARTERS CORP.,
by /s/ Evan A. Kaplan
___________________________
Name: Evan A. Kaplan
Title: President
VENCOR, INC.,
by /s/ W. Bruce Lunsford
___________________________
Name: W. Bruce Lunsford
Title: Chief Executive Officer
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KA ACQUISITION CORP.,
by /s/ Evan A. Kaplan
____________________
Name: Evan A. Kaplan
Title: President
SCHEDULE A
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Number of Shares of
Name and Address of Stockholder Common Stock Owned
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Vencor
3300 Aegon Center
400 West Market Street 0
Louisville, KY 40202
VALH
3300 Aegon Center
400 West Market Street 10,000,000
Louisville, KY 40202