VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement"), dated as of November 3, 1999,
is entered into by and among RISCORP, INC., a Florida corporation ("RISCORP"),
and William D. Griffin, an individual resident of the State of Florida
("Griffin"), The RISCORP Group Holding Company Limited Partnership, a Nevada
limited partnership ("RGHC"), William D. Griffin Family Limited Partnership, a
Nevada limited partnership ("WDG Family Partnership"), Charlotte K. Griffin
Trust Number 3, a Florida trust ("CKG Trust"), Anna F. Griffin Trust Number 3, a
Florida trust ("AFG Trust"), and John Ford Griffin Trust Number 3, a Florida
trust ("JFG Trust"; and, together with RGHC, WDG Family Partnership, CKT Trust,
and AFG Trust, the "Shareholders" and each a "Shareholder") of RISCORP.
W I T N E S S E T H:
WHEREAS, the Shareholders own (both beneficially and of record) in the
aggregate 24,334,443 shares of Series B Common Stock, par value $.01, of RISCORP
("Class B Common Stock");
WHEREAS, RISCORP, Acquiror and Griffin are parties to that certain Plan
and Agreement of Merger, dated November 3, 1999 (the "Merger Agreement"),
pursuant to which Acquiror will be merged with and into RISCORP (the "Merger");
WHEREAS, as a condition to the willingness of RISCORP to enter into the
Merger Agreement, RISCORP has requested that each Shareholder agree, and in
order to induce RISCORP to enter into the Merger Agreement, each Shareholder has
agreed, among other things, (i) with respect to certain questions put to
shareholders of RISCORP for a vote, to vote the Shares (as hereinafter defined),
in each case, in accordance with the terms and conditions of this Agreement,
(ii) in the event a Shareholder should fail to vote its Shares in accordance
with the terms of this Agreement, to appoint RISCORP as such Shareholder's proxy
to vote all the shares of Class B Common Stock now owned or which may hereafter
be acquired by such Shareholder (such Shareholder's "Shares"), and (iii) to the
other provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the adequacy of
which is hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Representations and Warranties of Shareholders. Each Shareholder
hereby represents and warrants to RISCORP as follows:
1.1. Title to the Shares. Such Shareholder is the owner (both
beneficially and of record) of the number of shares of Class B Common Stock set
forth opposite its name on the signature pages of this Agreement (which as of
the date hereof constitutes each such Shareholder's Shares) and has exclusive
power to vote such shares on all matters submitted to holders of shares of Class
B Common Stock. Other than the right to convert the shares of Class B Common
Stock into shares of Class A Common Stock, such Shareholder does not have any
rights of any nature to acquire any additional shares of Common Stock. To the
knowledge of each Shareholder, the Shareholders' Shares, in the aggregate,
constitute all of the outstanding shares of Class B Common Stock. Except
pursuant to (i) the Directors Agreement dated May 19, 1997, among RISCORP,
William Griffin, Frederick M. Dawson, Walter L. Revell, Seddon Goode, Jr. and
George E. Greene III, as amended (the "Directors Agreement"), and (ii) a Stock
Pledge and Security between The RISCORP Group Holding Company Limited
Partnership and SouthTrust Bank of Alabama, N.A., dated as of March 28, 1996, as
amended (the "Pledge and Security Agreement"), such Shareholder owns all of such
Shareholder's Shares free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on such
Shareholder's voting rights, charges and other encumbrances of any nature
whatsoever, and, except as provided or described in this Agreement, such
Shareholder has not appointed or granted any proxy, which appointment or grant
is still effective, with respect to any of such Shareholder's Shares.
1.2. Authority Relative to this Agreement. Such Shareholder
has all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by such
Shareholder and the consummation by such Shareholder of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of such Shareholder. This Agreement has been duly and validly
executed and delivered by such Shareholder and, assuming the due authorization,
execution and delivery by RISCORP, constitutes a legal, valid and binding
obligation of such Shareholder, enforceable against such Shareholder in
accordance with its terms, (i) except as may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally, and (ii) subject to general
principles of equity.
1.3. No Conflict. The execution and delivery of this Agreement
by such Shareholder does not, and the performance of this Agreement by such
Shareholder will not, (a) require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic or foreign by such Shareholder, or (b) conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to such Shareholder.
2. Covenants of Shareholders. Each Shareholder hereby covenants and
agrees that, during the time this Agreement is in effect, except as otherwise
specifically contemplated by (i) this Agreement, (ii) the Directors Agreement,
or (iii) the Pledge and Security Agreement, such Shareholder shall not, and
shall not offer or agree to, sell, transfer, tender, assign, hypothecate or
otherwise dispose of, or create or permit to exist any security interest, lien,
claim, pledge, option, right of first refusal, agreement, limitation on such
Shareholder's voting rights, charge or other encumbrance of any nature
whatsoever with respect to the Shares now owned or that may hereafter be
acquired by such Shareholder.
3. Voting Agreement; Proxy of Shareholders.
3.1. Voting Agreement. Each Shareholder hereby agrees that,
during the time this Agreement is in effect, at any meeting of the shareholders
of RISCORP, however called, and in any action by written consent of the
shareholders of RISCORP, such Shareholder shall: (a) vote such Shareholder's
Shares in favor of the Merger Agreement (as amended from time to time) and any
of the transactions contemplated by the Merger Agreement; and (b) vote the
Shares against any action or agreement that would result in a breach in any
material respect of any covenant, representation or warranty or any other
obligation of RISCORP under the Merger Agreement or which is reasonably likely
to result in any conditions to RISCORP's obligations under the Merger Agreement
not being fulfilled. Each of the Shareholders shall vote on all issues other
than those specified in this Section 3.1 that may come before a meeting of the
Shareholders of RISCORP in such Shareholder's sole discretion, provided that
such vote is not inconsistent with the purposes of this Agreement.
3.2. Irrevocable Proxy. Each Shareholder agrees that, in the event such
Shareholder shall fail to comply with the provisions of Section 3.1 hereof as
determined by RISCORP in its reasonable discretion, such failure shall result,
without any further action by such Shareholder, in the irrevocable appointment
of RISCORP as the attorney-in-fact and proxy of such Shareholder pursuant to the
provisions of Florida law, with full power of substitution, to vote, and
otherwise act (by written consent or otherwise) with respect to, the Shares that
such Shareholder is entitled to vote at any meeting of shareholders of RISCORP
(whether annual or special and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise, solely on the matters and
in the manner specified in Section 3.1 hereof. THIS PROXY AND POWER OF ATTORNEY
IS IRREVOCABLE AND COUPLED WITH AN INTEREST. Such Shareholder hereby revokes,
effective upon the execution and delivery of the Merger Agreement by the parties
thereto, all other proxies and powers of attorney with respect to such
Shareholder's Shares that such Shareholder may have heretofore appointed or
granted (other than as set forth in the Pledge and Security Agreement), and no
subsequent proxy or power of attorney (except in furtherance of such
Shareholder's obligations under Section 3.1 hereof) shall be given or written
consent executed (and if given or executed, shall not be effective) by such
Shareholder with respect thereto so long as this Agreement remains in effect.
4. Termination. This Agreement shall terminate on the date (the
"Termination Date") that is the earlier of (a) the Closing Date and (b) the date
on which the Merger Agreement is terminated in accordance with its terms.
5. Miscellaneous.
5.1. Expenses. All costs and expenses incurred in connection
with the transactions contemplated by this Agreement shall be paid by the party
incurring such costs and expenses.
5.2. Further Assurances. Each Shareholder and RISCORP will
execute and deliver all such further documents and instruments and take all such
further action as may be necessary in order to consummate the transactions
contemplated hereby.
5.3. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement is
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
5.4. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral, among
such parties with respect to the subject matter hereof.
5.5. Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
5.6. Parties in Interest. This Agreement shall be binding
upon, inure solely to the benefit of, and be enforceable by, the parties hereto
and their successors and permitted assigns. Nothing in this Agreement, express
or implied, is intended to or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
5.7. Amendment. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
5.8. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of 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 this Agreement 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 a mutually acceptable manner in order that the
terms of this Agreement remain as originally contemplated to the fullest extent
possible.
5.9. Notices. Except as otherwise provided herein, all
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by cable, facsimile transmission, telegram or
telex or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 5.9):
if to RISCORP:
2 North Tamiami Trail
One Sarasota Tower
Suite 608
Sarasota, Florida 34236
Attention: Walter E. Riehemann
Facsimile: (941) 366-0993
Telephone: (941) 366-5015
with a copy to:
Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309
Attention: J. Vaughan Curtis, Esq.
Facsimile: (212) 424-8500
Telephone: (212) 424-8000
if to the Shareholders:
c/o William D. Griffin
One Sarasota Tower
Suite 410
Sarasota, Florida 34236
Facsimile: (941)316-6813
Telephone:(941)316-6800
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
Attention: Edward J. Hawie, Esq.
Facsimile: (404) 572-5100
Telephone: (404) 572-4600
5.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida applicable to
contracts executed in and to be performed in Florida without regard to any
principles of choice of law or conflicts of law of such state.
5.11. Definitions. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Merger Agreement.
5.12. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
5.13. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the date first written above.
RISCORP, INC.
By: /s/ Walter E. Riehemann
Walter E. Riehemann
President
/s/ William D. Griffin
WILLIAM D. GRIFFIN
17,268,841 THE RISCORP GROUP HOLDING COMPANY
shares LIMITED PARTNERSHIP
By: Gryphus Company I, General Partner
By /s/ William D. Griffin
WILLIAM D. GRIFFIN, President
4,907 211 WILLIAM D. GRIFFIN FAMILY LIMITED
- --------- PARTNERSHIP
shares
By: Gryphus Company I, General Partner
By: /s/ William D. Griffin
WILLIAM D. GRIFFIN, President
719,464 CHARLOTTE K. GRIFFIN TRUST NUMBER 3
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shares
By: /s/ L. Scott Merritt
L. Scott Merritt, Trustee
719,464 ANNA F. GRIFFIN TRUST NUMBER 3
- --------
shares
By: /s/ L. Scott Merritt
L. Scott Merritt, Trustee
719,463 JOHN FORD GRIFFIN TRUST NUMBER 3
- --------
shares
By: /s/ L. Scott Merritt
L. Scott Merritt, Trustee