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EXHIBIT 7(b)
VOTING AGREEMENT dated as of May 8, 1998 between P.A.R. Investment
Partners, L.P. (the "Shareholder") and Maxicare Health Plans, Inc. (the
"Company").
WHEREAS, the board of directors of the Company (the "Board") has increased
the number of directors which constitutes the Board to nine and has filled the
one existing vacancy and two newly created directorships on the Board with
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. (the "Soliciting Shareholder"), who have
been named Class II directors with terms expiring in 1998 and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
who has been named a Class I director with a term expiring in 2000, and the
Board has added the Soliciting Shareholder to the Board's executive committee
which has been increased from three to four members;
WHEREAS, the Board intends that ▇▇. ▇▇▇▇▇▇▇ and the Soliciting Shareholder
and ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ shall be the slate of nominees recommended by the
Board for election as the directors (the "Board Slate") at the Company's 1998
annual meeting of shareholders ("1998 Annual Meeting"); and
WHEREAS, the Board has approved the amendments to the Bylaws, Certificate
and the rights agreement between the Company and American Stock Transfer & Trust
Company, as Rights Agent, dated as of February 24, 1998 (the "Rights Agreement")
attached as Exhibit A (the "Amendments"), subject to approval of the Amendments
by a majority of the outstanding shares of common stock, par value $.01 per
share (the "Shares") at the 1998 Annual Meeting; and
WHEREAS, in connection with the termination of a solicitation of written
consents from the Company's shareholders by the Soliciting Shareholder (the
"Consent Solicitation"), the Company has agreed to reimburse the Soliciting
Shareholder's fees and expenses (not to exceed $450,000) related to the Consent
Solicitation and the negotiation of related agreements (the "Expense
Reimbursement") promptly after the satisfaction of the conditions to such
reimbursement subject to reasonable documentation of such fees and expenses and
approval of such reimbursement by (a) holders of at least 50% of the outstanding
Shares (with such approval deemed to have been given by all Shares covered by
agreements with the Company to vote in favor of the Expense Reimbursement at the
1998 Annual Meeting, or (b) the affirmative vote of the majority of the Shares
present in person or by proxy at the 1998 Annual Meeting and entitled to vote on
such matter; and
WHEREAS, the parties desire to agree on certain actions to be taken at the
1998 Annual Meeting,
NOW, THEREFORE, in consideration of the agreements contained herein, the
parties agree as follows:
1. PROPOSALS BY THE COMPANY. The Company will propose the election of the
Board Slate, the adoption of the Amendments and the approval of the Expense
Reimbursement
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at the 1998 Annual Meeting.
2. VOTING AGREEMENT OF SHAREHOLDER. The Shareholder agrees that all
shares of Common Stock of the Company ("Share") as to which the Shareholder or
any of its affiliates has the power to direct the vote on the record date for
the 1998 Annual Meeting, shall be voted at such meeting in favor of the Board
Slate, the Amendments and the Expense Reimbursement, and the Shareholder shall
not execute a written consent of shareholders in lieu of a meeting or vote to
call a special meeting prior to the 1998 Annual Meeting which will be held by
July 31, 1998. Such record date shall be June 8, 1998 or the earliest possible
date thereafter and, in no event, later than June 12, 1998. If any Shares as to
which the Shareholder has the power to direct the vote are transferred prior to
such record date, the Shareholder shall obtain an agreement from the transferee
assuming the Shareholder's obligations under this sentence and the immediately
preceding sentence; provided, however, that the Shareholder shall not be
required to obtain such an agreement from the transferee of Shares which the
Shareholder sells as a result of instructions from clients or customers
requiring the Shareholder to sell such Shares, or to liquidate such clients'
accounts in whole or in part or changing the investment objectives of such
accounts.
3. MISCELLANEOUS.
(a) This agreement shall not be altered, amended, changed, waived,
terminated or otherwise modified except by a writing signed by the party to be
charged.
(b) This agreement shall be interpreted and enforced in accordance
with the laws of the State of Delaware applicable to contracts made and to be
performed there, and any legal action or proceeding with respect to this
agreement may be brought in the courts of the State of Delaware or the United
States District Court of the District of Delaware, and each party accepts the
exclusive jurisdiction of such courts.
(c) This agreement may be executed in several counterparts, each of
which will be deemed an original.
(d) Each of the parties acknowledges and agrees that irreparable
damages would occur if any of the provisions of this agreement were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, it is agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this agreement and to enforce specifically
the terms of this agreement in any court having jurisdiction, in addition to any
other remedy to which they may be entitled at law or equity.
(e) The parties acknowledge and agree that this Agreement is not an
agreement, arrangement or understanding of the type referred to in Section
1(d)(iii) of the Company's Shareholders Rights Plan, and the Shareholder and
other shareholders entering into agreements containing the covenants contained
in Section 2 shall not be deemed an Acquiring Person as that term is used in the
Shareholders Rights Plan by virtue of anything contained in this Agreement or
those agreements or any acts or transactions contemplated thereby.
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(f) This Agreement shall inure to the benefit of, and be enforceable
by, the Soliciting Shareholder, as if he were a party hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
MAXICARE HEALTH PLANS, INC.
By:
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P.A.R. INVESTMENT PARTNERS LP
By: PAR Group LP, General Partner
By: PAR Capital Management, Inc., General Partner
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, Vice President
