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EXHIBIT 10.50
RIGHT OF FIRST REFUSAL AGREEMENT
This RIGHT OF FIRST REFUSAL AGREEMENT (the "Agreement") is made and
entered into as of August 16, 1996, by and among Park Hospital GmbH, a German
corporation (the "Paracelsus Shareholder"), and Dr. Manfred George Krukemeyer
(Dr. Krukemeyer and the Paracelsus Shareholder, together with their Permitted
Transferees (as such term is defined in the Shareholder Agreement between the
Paracelsus Shareholder and the Company, dated as of the date hereof) the
"Beneficiary") and the persons whose signatures appear on the execution pages
of this Agreement (each, together with his permitted successors and assigns, a
"Holder" and, collectively the "Holders").
WHEREAS, in connection with that certain Amended and Restated
Agreement and Plan of Merger, dated as of May 29, 1996 (as further amended from
time to time in accordance with the terms thereof, the "Merger Agreement"), by
and among Paracelsus Healthcare Corporation, a California corporation (the
"Company"), Champion Healthcare Corporation, a Delaware corporation, and PC
Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the
Company, each of the Holders has agreed to provide the Beneficiary with the
right of first refusal set forth in this Agreement;
NOW, THEREFORE, the parties hereto, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
intending to be bound hereby, agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
Affiliate: With respect to any specified person, any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: See the introductory clauses hereof.
Beneficiary: See the introductory clauses hereof.
Beneficiary's Notice: See Section 2(b) hereof.
Business Day: Any day that is not a Saturday, a Sunday, a legal holiday or a
day on which banking institutions in the States of New York or Texas are not
required to be open.
Common Stock: The common stock, no stated value per share, of the Company or
any other shares of capital stock of the Company into which such stock shall be
reclassified or changed. If the Common Stock has been so reclassified or
changed, or if the Company pays a dividend or makes a distribution on the
Common Stock in shares of capital stock, or subdivides (or combines) its
outstanding shares of the Common Stock into a greater (or smaller) number of
shares of the Common Stock, a share of the Common Stock shall be deemed to be
such number of shares of capital stock and amount of other securities to which
a holder of a share of the Common Stock
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outstanding immediately prior to such reclassification, exchange, dividend,
distribution, subdivision or combination would be entitled.
Company: See the introductory clauses hereof.
Holder's Notice: See Section 2(a) hereof.
Holders: See the introductory clauses hereof.
Merger Agreement: See the introductory clauses hereof.
Notifying Holder: See the introductory paragraph of Section 2 hereof.
person: Any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Shares: The shares of Common Stock or any rights, options or warrants to
purchase, or securities convertible into or exchangeable for, Common Stock, but
excluding shares of Common Stock held by registered brokers in margin accounts
for so long as they remain so held or shares of Common Stock held pursuant to a
bona fide pledge of such shares to a financial institution to secure borrowings
as permitted by applicable laws, rules and regulations provided such financial
institution agrees to be bound by the terms hereof.
SECTION 2. Right of First Refusal.
If at any time after the execution of this Agreement a Holder desires
to sell or transfer (which terms shall expressly exclude any (I) transfer to a
registered broker solely in connection with a bona fide margin transaction or
(ii) transfer to a financial institution in connection with securing borrowings
as permitted in applicable laws, rules and regulations for purposes of a bona
fide pledge provided such financial institution agrees to be bound by the terms
hereof) any portion of his Shares to an unaffiliated third party (such Holder
is hereinafter referred to as a "Notifying Holder"), the Beneficiary shall
first be given the opportunity, in the following manner, to purchase any or all
of such Shares:
(a) The Notifying Holder shall deliver a written notice in
accordance with Section 4 hereof (the "Holder's Notice") to the Beneficiary of
such intention, describing the specific intention to sell the Shares and the
terms thereof, identifying, if applicable, the offeror and the proposed price
of the Shares, and setting forth, if applicable, all the other terms and
conditions of such offer, and, if applicable, a copy of such offer shall be
attached to the Holder's Notice.
(b) The Beneficiary shall have the right for four (4) Business
Days from the receipt of the Holder's Notice, exercisable by written notice in
accordance with Section 4 hereof (the "Beneficiary's Notice"), to elect to
purchase any or all of the Shares specified in the Holder's Notice at the price
set forth therein and otherwise substantially upon any material terms and
conditions contained in the offer attached to the Holder's Notice. If the
purchase price specified in the Holder's Notice includes any property other
than cash, such purchase price shall be deemed to be the amount of any cash
included in the purchase price plus the value (as may be mutually agreed by the
Beneficiary and the Notifying Holder, or, if they are unable to agree, as
determined by an independent investment banking firm selected by mutual
agreement of the Beneficiary and
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the respective Holder) of such other property included in such price; and in
such event (i) the Beneficiary shall not be deemed to be in receipt of the
Holder's Notice until the value of the other property is agreed upon, and (ii)
the Beneficiary's Notice shall set forth the purchase price so determined.
(c) If the Beneficiary does not exercise his right to elect to
purchase the Shares specified in the Holder's Notice within four (4) Business
Days from the receipt of the Holder's Notice, the Notifying Holder shall be
free to sell or agree to sell the Shares specified in the Holder's Notice as
described in the Holder's Notice, at the price specified therein or at any
price in excess thereof and on other terms and conditions no less favorable to
the Notifying Holder than specified in the Holder's Notice. If the Notifying
Holder shall not so sell any or all of the Shares specified in the Holder's
Notice within twenty (20) Business Days after delivery of the Beneficiary's
Notice in accordance with Section 2(b) hereof (or, if no Beneficiary's Notice
is given, within twenty-four (24) Business Days following the Beneficiary's
receipt of the Holder's Notice), the provisions of this Section 2 shall
thereafter apply to the Shares not so sold.
(d) If the Beneficiary exercises its right to purchase specified
in this Section 2, the closing of the purchase of the Shares shall take place
within three (3) Business Days after receipt of the Beneficiary's Notice by the
Holder, at a place, time and date specified by the Holder and agreed to by the
Beneficiary. At the closing, the Beneficiary shall deliver to the Notifying
Holder same day funds or other agreed upon consideration, in an amount equal to
the purchase price set forth in the Holder's Notice or the Beneficiary's
Notice, as the case may be, and the Notifying Holder shall deliver to the
Beneficiary certificates representing the Shares, duly endorsed in blank or
accompanied by stock powers or their equivalents duly executed and otherwise in
form acceptable for transfer on the books of the Company.
SECTION 3. Transfer Restrictions.
Each Holder agrees that it shall not sell or otherwise transfer its
Shares except in accordance with the terms hereof.
The parties hereto agree that if any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached, irreparable damage would occur, no adequate remedy of law
would exist and damages would be difficult to determine, and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
SECTION 4. Termination.
This Agreement and the obligations of the Holders shall terminate on
the earliest of (I) the tenth anniversary of the date hereof, (ii) the first
date on which all Shares held by the Holders shall have been sold, (iii) the
first date on which any Holder ceases to be a director or employee of the
Company and (iv) the ceasing of the Paracelsus Shareholder to beneficially own,
together with all of its Affiliates and Associates, at least thirty-five
percent (35%) of the Shares.
SECTION 5. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing and shall be deemed duly given upon (a) a transmitter's
written confirmation of a receipt of a
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facsimile transmission, (b) confirmed delivery by a standard overnight carrier
or (c) the expiration of three business days after receipt by certified or
registered mail, postage prepaid, addressed at the following addresses (or at
such other address as the parties hereto shall specify by like notice):
(a) If to the Beneficiary, to:
AM Natruper Holz 69
D-49076 Osnabruck
Federal Republic of Germany
Telecopier No. (011) 49-541-966-4006
Attention:
with copies to:
R.J. Messenger
155 North Lake Avenue, Suite 1100
Pasadena, California 91101
and to:
Dr. Meyer zu Losebeck
Sozietat Dr. H. Mertens
Hasemauer 9
49074 Osnabruck, Germany
Facsimile: (011) 49-541-331-1616
(b) If to any of the Holders, to the respective addresses
indicated below each Holder's signature set forth on the signature page of this
Agreement.
SECTION 6. Separability. If any provision of this Agreement shall be declared
to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
SECTION 7. Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and shall not be
assignable (by operation of law or otherwise) without the written consent of
all other parties hereto; provided, that the rights and obligations under this
Agreement may be assigned by a party hereto in the same manner as such party is
permitted to assign its interest in the Shareholder Agreement pursuant to
Section 13 thereof, which assignment shall not terminate any portion of this
Agreement with respect to such assignor except in accordance with Section 4 of
this Agreement.
SECTION 8. Entire Agreement.
This Agreement represents the entire agreement of the parties and
shall supersede any and all previous contracts, arrangements or understandings
between the parties hereto with
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respect to the subject matter hereof. This Agreement may be amended at any time
by mutual written agreement of the parties hereto.
SECTION 9. Publicity.
The Beneficiary and each Holder agree that no public release or
announcement concerning the transactions contemplated hereby shall be issued by
either party without the prior consent of the other party, except to the extent
that the Beneficiary or the Holder is advised by counsel that such release or
announcement is necessary or advisable under applicable law or the rules or
regulations of any securities exchange, in which case the party required to
make the release or announcement shall provide the other party with an
opportunity to review and comment on such release or announcement in advance of
its issuance.
SECTION 10. Expenses. Whether or not the transactions contemplated hereby are
consummated, except as otherwise provided herein, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs or expenses.
SECTION 11. Interpretation. 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.
SECTION 12. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party.
SECTION 13. Governing Law and Venue. This Agreement shall be construed,
interpreted, and governed in accordance with and subject to the laws of Texas,
without reference to rules relating to conflicts of law. The parties hereby
irrevocably submit to the jurisdiction of the courts of the State of Texas and
the Federal courts of the United States of America located in the State of
Texas solely in respect of the interpretation and enforcement of the provisions
of this Agreement, and in respect of the transactions contemplated hereby, and
hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such
document, that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or that the
venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Texas State or Federal court. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 5 shall be valid and sufficient
service thereof.
SECTION 14. Calculation of Time Periods. Except as otherwise indicated, all
periods of time referred to herein shall include all Saturdays, Sundays and
holidays; provided, that if the date to perform the act or give any notice with
respect to this Agreement shall fall on a day other than a Business Day, such
act or notice may be timely performed or given if performed or given on the
next succeeding Business Day.
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SECTION 15. No Inconsistent Agreements.
No Holder has, as of the date hereof, and shall not, on or after the
date of this Agreement, enter into any agreement with respect to his securities
which is inconsistent with the rights granted to the Beneficiary in this
Agreement or otherwise conflicts with the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
PARK HOSPITAL GmbH
\s\ Dr. Manfred G. Krukemeyer
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By: Dr. Manfred George Krukemeyer
Title: Chairman
\s\ R. J. Messenger
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By: R. J. Messenger
Address for Notice:
515 West Greens Road, Suite 800
Houston, Texas 77067
\s\ Charles R. Miller
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By: Charles R. Miller
Address for Notice:
515 West Greens Road, Suite 800
Houston, Texas 77067
\s\ James G. VanDevender
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By: James G. VanDevender
Address for Notice:
515 West Greens Road, Suite 800
Houston, Texas 77067
\s\ Ronald R. Patterson
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By: Ronald R. Patterson
Address for Notice:
515 West Greens Road, Suite 800
Houston, Texas 77067