Exhibit 2.3
OPTION AGREEMENT
This Option Agreement (this "Agreement") is entered into as of this 4th
day of December, 1997, by and among Magellan Health Services, Inc., a Delaware
corporation ("Magellan") and Xxxx X. Xxxxxxxxx ("Xxxxxxxxx").
WITNESSETH:
WHEREAS, Magellan, Xxxx X. Xxxxxxx ("Lincoln"), Xxxxxxxxx and Care
Management Resources, Inc. (the "Corporation") entered into that certain
Shareholders Agreement dated February 6, 1997 (the "Shareholders Agreement");
WHEREAS, Magellan and Xxxxxxxxx desire to set forth additional
agreements as between themselves, which shall not affect or impair the rights of
Lincoln or the Corporation under the Shareholders Agreement;
WHEREAS, Xxxxxxxxx is the owner of 30,000 shares of the Corporation's
stock, which shares represent all of his ownership of shares of the Corporation,
and which represent 7.5% of the total number of issued and outstanding shares of
stock of the Corporation on the date hereof;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound, do hereby covenant and agree as follows:
1 XXXXXXXXX'X PUT RIGHT
1.1 At any time during the period commencing on November 1,1998 and
ending at the close of business on November 30, 1998, Xxxxxxxxx will have the
right to sell Magellan, and Magellan will agree to purchase, Fifteen Thousand
(15,000) shares of the Corporation's stock, in consideration for the issuance of
a number of shares of Magellan's common stock which shall be determined by
dividing Five Hundred Thousand Dollars ($500,000) by the average closing price
per share of Magellan's common stock on the ten Trading Days immediately prior
to the second Trading Day preceding the date on which such stock is to be
issued; provided however, that the number of shares of Magellan's common stock
to be issued shall be adjusted appropriately to account for stock splits, stock
dividends, recapitalizations or other events affecting the number of issued and
outstanding shares of Magellan's common stock, which occur after ten Trading
Days on which such average closing price per share is based.
1.2 At any time during the period commencing on November 1, 1999 and
ending at the close of business on November 30, 1999, Xxxxxxxxx will have the
right to sell to Magellan, and Magellan will agree to purchase, Seven Thousand
Five Hundred (7,500) shares of the Corporation's stock, in consideration for the
issuance of a number of shares of Magellan's common stock which shall be
determined by dividing Two Hundred Fifty Thousand Dollars ($250,000) by the
average closing price per share of Magellan's common stock on the ten Trading
Days immediately prior to the second Trading Day preceding the date on which
such stock is to be issued; provided however,
that the number of shares of Magellan's common stock to be issued shall be
adjusted appropriately to account for stock splits, stock dividends,
recapitalizations or other events affecting the number of issued and
outstanding shares of Magellan's common stock, which occur after the ten
Trading Days on which such average closing price per share is based.
1.3 At any time during the period commencing on November 1, 2000 and
ending at the close of business on November 30, 2000, Xxxxxxxxx will have
the right to sell to Magellan and Magellan will agree to purchase, Seven
Thousand Five Hundred (7,500) shares of the Corporation's stock, in
consideration for the issuance of a number of shares of Magellan's common
stock which shall be determined by dividing Two Hundred Fifty Thousand
Dollars ($250,000) by the average closing price per share of Magellan's
common stock on the ten Trading Days immediately prior to the second Trading
Day preceding the date on which such stock is to be issued; provided however,
that the number of shares of Magellan's common stock to be issued shall be
adjusted appropriately to account for stock splits, stock dividends,
recapitalizations or other events affecting the number of issued and
outstanding shares of Magellan's common stock, which occur after the ten
Trading Days on which such average closing price per share is based.
1.4 Notwithstanding anything to the contrary contained herein, the
period within which the options described in Sections 1.1, 1.2 and 1.3 may be
exercised may, at Xxxxxxxxx'x election, be delayed and extended as provided
in Section 4 below, but in such event, Xxxxxxxxx shall continue to be
entitled to exercise the rights set forth in this Section 1.
1.5 Notwithstanding any other provision of this Agreement to the
contrary, no merger, reorganization, reverse stock split, recapitalization,
consolidation or any other event (a "Reorganization"), shall in any way
reduce or diminish the number of shares of Magellan's stock which Xxxxxxxxx
is entitled to receive upon the exercise of his options under this Section 1
or upon the exercise of Magellan's call option under Section 5, or the amount
of the cash consideration which is payable to Xxxxxxxxx if Magellan elects to
pay cash to Xxxxxxxxx under Section 1.6 or Section 5, or otherwise reduce or
impair any other rights which Xxxxxxxxx has under this Agreement.
Notwithstanding any such Reorganization, Xxxxxxxxx shall be entitled to
exercise all of his rights under this Agreement, including without
limitation, the option to sell and transfer to Magellan (in which event
Magellan shall be obligated to purchase) his original shares of the
Corporation or such substitute securities as he may then hold as a result of
the Reorganization ("Substitute Securities"), in the same manner as he is
entitled to sell to Magellan his shares of the Corporation under this Section 1,
so long as the number of Substitute Securities being sold by Xxxxxxxxx to
Magellan at any one time represents 50% (in the case of the exercise of
options under Section 1.1), or 25% (in the case of the exercise of options
under Section 1.2 or 1.3) of his total holdings of Substitute Securities
(calculated immediately after such Reorganization). For example, if
Xxxxxxxxx were exercising his option under Section 1.1 and immediately prior
to such exercise, he held a total of 3.45 shares of Substitute Securities, he
would sell 50% of his 3.45 Substitute Securities to Magellan under Section
1.1. Without limiting the generality of the foregoing, Xxxxxxxxx
specifically acknowledges and agrees that the parties anticipate that the
Corporation will be merged with and into Allied Specialty Care Services,
Inc., a Florida corporation, and that in the event such merger is consummated
as anticipated, his ownership interest in the surviving entity will be
approximately .63%, but the parties
2
agree that such reduced percentage to be held by Xxxxxxxxx shall have no
impact whatsoever on the amount of consideration to be paid (in Magellan
stock or cash) upon the exercise of Xxxxxxxxx'x options under this Section 1
or upon the exercise of Magellan's options under Section 5. The parties
hereto agree that all references in this Agreement to shares of the
Corporation held by Xxxxxxxxx shall be deemed to include Substitute
Securities resulting from any Reorganization.
1.6 Notwithstanding any other provision of this Agreement to the
contrary, Magellan may, in its sole discretion, elect to pay cash to
Xxxxxxxxx in the amount referenced in Section 1.1, 1.2 or 1.3, as applicable,
in lieu of the issuance of shares of Magellan's common stock under such
applicable Section, as consideration for the payment of the Corporation's
shares being sold to Magellan pursuant to such applicable Section.
2 Trading Day Defined. A "Trading Day" is defined as a day on which
Magellan's common stock (i) is not suspended from trading on the New York
Stock Exchange (or such other exchange as may then be the primary market for
the trading of Magellan stock) at the close of business; and (ii) has traded
at least once on such exchange.
3 Registration and Resales.
3.1 No later than January 15, 1998, Magellan shall file a registration
statement under the Securities Act of 1933 (the "Securities Act") with
respect to the issuance and resale of the shares of Magellan's common stock
upon the exercise of the options set forth in Section 1 hereof, and shall use
its reasonable efforts to cause such registration statement to become
effective by March 1, 1998. Magellan shall use reasonable efforts to
maintain the effectiveness of such registration statement for a period
commencing on the initial effective date of such registration statement and
terminating on the later of (i) December 31, 2001, or (ii) one year following
the issuance of shares pursuant to the option set forth in Section 1.3 if
such issuance occurs later than December 31, 2000 due to the delay in the
exercise of such options pursuant to Section 4.2 hereof. Xxxxxxxxx agrees to
provide to Magellan such information regarding himself as Magellan may from
time to time reasonably request in writing, and as required by the Securities
Act, and he agrees to immediately notify Magellan of any change in such
information. Xxxxxxxxx agrees to enter into such agreements as are customary
in connection with the registration of shares for resale, including without
limitation, underwriting agreements and powers of attorney in customary form,
substance and scope, and to take such other actions as Magellan or the
underwriters, if any, may reasonably request in order to expedite or
facilitate the resale of the registered shares.
3.2 During any period in which the registration statement filed
pursuant to Section 3.1 is effective, Magellan shall have the right, upon
giving notice to Xxxxxxxxx, to require Xxxxxxxxx not to sell any such shares
pursuant to such registration statement for a period of time which Magellan
deems reasonably necessary (which time shall be specified in such notice but
in no event longer than a period of 90 days), if (i) Magellan is engaged in
an offering of shares of Magellan's common stock by Magellan for its own
account or is engaged in or proposes to engage in discussions or negotiations
with respect to, any merger, acquisition, other form of business
combination, divestiture, tender offer, financing or other transaction, or
there is any other event or state of facts
3
relating to Magellan which is material to Magellan (any such transaction,
event or state of facts referred to herein as a "Material Activity"), and
(ii) such Material Activity has not been publicly announced and would, in the
opinion of counsel for Magellan, require disclosure so as to permit the
registered shares to be sold in compliance with applicable law.
3.3 Xxxxxxxxx acknowledges and agrees that the offer and sale of all
shares of Magellan's common stock received upon exercise of the options
contained herein shall be subject to Magellan's Stock Trading Policy dated
August 1, 1997, as it may be amended from time to time (the "Stock Trading
Policy"), to the extent that such Stock Trading Policy is then applicable to
Xxxxxxxxx, and (ii) by applicable federal and state securities laws. In
addition, Xxxxxxxxx hereby agrees that in the event he exercises any such
options, he shall not sell more than Ten Thousand (10,000) shares of
Magellan's common stock on any single Trading Day (such figure to be adjusted
appropriately to account for stock splits, stock dividends, recapitalizations
or other events affecting the number of issued and outstanding shares).
3.4 All expenses incident to the registration of the shares of
Magellan's common stock pursuant to the provisions of this Section 3,
including without limitation, all registration and filing fees, fees and
expenses of compliance with securities laws, printing and engraving expenses,
messenger and delivery expenses and fees and disbursements of counsel for
Magellan and all independent certified public accountants, underwriters
(excluding underwriter discounts and any selling commissions) and any persons
retained by Magellan (all such expenses referred to herein as "Registration
Expenses"), will be paid by Magellan; provided that all expenses incurred by
Xxxxxxxxx to retain any counsel, accountant or other advisor (if any), will
not be deemed Registration Expenses and will be paid by Xxxxxxxxx. The
underwriting discounts or commissions and any selling commissions together
with any stock transfer or similar taxes attributable to sales by Xxxxxxxxx
of the shares of Magellan's common stock, will be paid by Xxxxxxxxx.
4 Exercise of Put Options
4.1 If Xxxxxxxxx desires to exercise his put options hereunder, he
shall give written notice to Magellan during the period in which the option
may be exercised, and such options may only be exercised as to all of the
shares of the Corporation's stock which he is entitled to put to Magellan at
any one time.
4.2 Upon receipt of notice from Xxxxxxxxx of the exercise of his
option hereunder, Magellan shall notify Xxxxxxxxx if (i) Xxxxxxxxx is then
deemed to be a Designated Individual under the Stock Trading Policy, and if
so, whether there is any circumstance or condition then existing that would
cause Xxxxxxxxx'x ability to sell all of the shares of Magellan's common
stock which Xxxxxxxxx would receive upon the exercise of such option, during
a then-current Window Period (as defined in the Stock Trading Policy) or
during the next scheduled Window Period, to be suspended or cancelled
altogether, or (ii) the registration statement contemplated by Section 3.1 is
not then effective. In the event that Magellan notifies Xxxxxxxxx of such
anticipated suspension or cancellation of a Window Period, or of the
non-effective status of such registration statement, then Xxxxxxxxx shall
have the right to notify Magellan of his election to delay the exercise of
such option (i) until the then-current Window Period is re-opened (provided
that any such Window Period remains open for not less than twenty (20)
consecutive days after
4
Magellan provides written notice to Xxxxxxxxx, and Magellan hereby agrees to
provide written notice of any such re-opening), or the next scheduled Window
Period is opened, as applicable (and such option shall not expire until the
closing of such Window Period), or (ii) in the case of a delay due to a
non-effective registration statement, until such registration statement is
effective.
5 Magellan's Call Option. At any time during the period commencing upon
the expiration of any of the options set forth in Section 1.1, 1.2 or 1.3,
and ending at the close of business one year after the commencement of such
call option hereunder (except in the case of an extension of the exercise
period as set forth below), Magellan shall have the right to acquire from
Xxxxxxxxx, and Xxxxxxxxx shall be obligated to sell to Magellan following
written notice of the exercise of such option, the number of shares of the
Corporation's stock to which the expired put option relates; provided
however, that Lincoln shall be afforded the opportunity to purchase, in
accordance with the terms of the Shareholders Agreement, his pro rata share
of Xxxxxxxxx'x shares to be acquired by Magellan. In consideration for such
shares, Magellan shall issue to Xxxxxxxxx a number of shares of Magellan's
common stock determined by dividing the dollar value specified in Section
1.1, 1.2 or 1.3, as applicable, by the average closing price per share of
Magellan's common stock on the ten Trading Days immediately prior to the
second Trading Day preceding the date on which such stock is to be issued;
provided however, that the number of shares of Magellan's common stock to be
issued shall be adjusted appropriately to account for stock splits, stock
dividends, recapitalizations or other events affecting the number of issued
and outstanding shares of Magellan's common stock, which occur after the ten
Trading Days on which such average closing price per share is based.
Notwithstanding the foregoing, Magellan shall not be entitled to exercise
any option under this Section 5 unless there is at the time of exercise an
open Window Period which will remain open for at least 20 consecutive days
after the exercise of such option. In the event that there would not be an
open Window Period for a period of at least 20 consecutive days after the
exercise of the option, then the period in which Magellan may exercise its
option hereunder shall be automatically extended until either a Window Period
is open for at least 20 consecutive days, or until one year after Magellan
notifies Xxxxxxxxx that he is no longer subject to Magellan's Stock Trading
Policy. Notwithstanding any other provision of this Section 5 to the
contrary, Magellan may, in its sole discretion, elect to pay cash to Xxxxxxxxx
in the amount referenced in Section 1.1, 1.2 or 1.3, as applicable, in lieu
of the issuance of the number of shares of Magellan's common stock specified
under such applicable Section, as consideration for the payment of the
Corporation's shares being sold to Magellan upon the exercise of Magellan's
option hereunder. In addition, notwithstanding anything to the contrary
contained herein, Magellan may elect, by delivering ten (10) days' prior
written notice at any time after January 1, 1998, to acquire all of the
shares of the Corporation held by Xxxxxxxxx for a total cash purchase price
of One Million Dollars ($1,000,000) plus such additional amount, if any,
necessary to offset, on an after-tax basis, any adverse tax consequences
which may be suffered by Xxxxxxxxx as a result of the exercise of such option
prior to the time when Xxxxxxxxx would have been entitled to exercise his
options under Section 1, with such cash purchase price payable at the Closing
for the purchase of such shares. In the event that Magellan exercises such
option, Lincoln shall be afforded the opportunity to purchase, in accordance
with the terms of the Shareholders Agreement, his pro rata share of
Xxxxxxxxx'x shares to be acquired by Magellan.
6 Closing. In the event that Xxxxxxxxx exercises his rights under
Section 1, or Magellan exercises its rights under Section 5 as to shares of
the Corporation's stock held by Xxxxxxxxx, Magellan shall schedule a Closing
for the purchase and sale of such shares of the Corporation's stock to be
held as soon as practicable considering that Xxxxxxxxx may desire to
immediately sell the shares of Magellan stock to
5
be received at the Closing, and in no event more than 30 days after the
delivery of such exercise notice, or at Xxxxxxxxx'x election made by
delivering written notice of such election to Magellan, on a day which is
within the first ten (10) days of the next open Window Period. At any
closing held to transfer shares of the Corporation's stock pursuant to the
provisions of Section 1 or 5 of this Agreement (a "Closing");
6.1 The location shall be at the offices of the Corporation unless
otherwise agreed to by all of the parties to the Closing.
6.2 Xxxxxxxxx shall deliver to Magellan (or its assignee) the
certificates representing the shares of the Corporation's stock to be sold,
duly endorsed in blank or accompanied by stock powers endorsed in blank.
6.3 Magellan shall deliver to Xxxxxxxxx at the Closing, stock
certificates representing the number of shares of Magellan's common stock
required to be issued under Section 1.1, 1.2 or 1.3, as applicable, in payment
for such stock of the Corporation being sold.
6.4 Except as otherwise provided herein, each party shall pay its own
expenses incidental to any transaction provided for in this Agreement.
7 No Transfer Prior to Expiration of Option. Xxxxxxxxx hereby agrees
that during the period commencing on the date hereof and continuing until one
year after the expiration of all of the options granted to Xxxxxxxxx
hereunder, Xxxxxxxxx shall not sell, transfer, assign, pledge, encumber or
otherwise dispose of any of the shares of the Corporation held by Xxxxxxxxx,
other than a transfer to Magellan in a Closing pursuant to Section 6 above
(and to Lincoln to the extent he elects to exercise his right of first
refusal under Section 4 of the Shareholders Agreement), and any sale,
transfer, assignment, pledge, encumbrance or other disposition prior to such
date shall be void and of no effect. Notwithstanding anything to the
contrary contained herein, Xxxxxxxxx shall have no obligation under this
Section 7 in the event that Magellan breaches any material obligation to
Xxxxxxxxx hereunder if such breach is not cured within 30 days of receipt of
written notice of such breach from Xxxxxxxxx.
8 Waiver of Duties
8.1 Xxxxxxxxx hereby agrees that neither Magellan nor the Corporation,
nor the officers or directors of Magellan or the Corporation, shall have any
fiduciary duty, quasi-fiduciary duty or any other express or implied duty, at
law or in equity (in their capacity as officers, directors, majority
shareholder or otherwise), to the Corporation or Xxxxxxxxx as shareholders,
officers, directors, or employees of the Corporation. Accordingly, Magellan
and its affiliates shall be free to engage in any business or activity which
Magellan may desire, in its sole discretion, without regard to whether such
business or activity is competitive with the business of the Corporation, and
without providing any opportunity to Xxxxxxxxx or the Corporation to
participate in any such activity or business, and without any compensation to
Xxxxxxxxx or the Corporation. Xxxxxxxxx further acknowledges that subject to
agreement by Lincoln, Magellan shall be free to cause the Corporation to
transfer or license the right to use any and all of the assets of the
Corporation to any other subsidiary of Magellan for no consideration or for
nominal consideration, as Magellan deems in the best interest of Magellan, in
its sole discretion. Notwithstanding the foregoing, Magellan hereby
6
agrees that it shall not cause or permit the Corporation to be dissolved
prior to the expiration of the options granted herein or to take any action
which adversely affects any of Xxxxxxxxx'x rights under this Agreement, it
being understood and agreed that notwithstanding any sale, dissolution,
cessation of business, or Reorganization, all of Xxxxxxxxx'x rights
hereunder, including the put options set forth in Section 1, are absolute,
nonvoidable and vested immediately upon the execution and delivery hereof by
each of the parties. Following the expiration or termination of the options
granted herein, Magellan shall be free to cause the dissolution of the
Corporation in accordance with the Florida Business Corporation Act, and
Xxxxxxxxx acknowedges that he is unlikely to receive any distributions in
connection with any such dissolution after appropriate reserves are
established for the Corporation's known and contingent liabilites. The
parties further agree that the rights of Xxxxxxxxx under this Agreement shall
not be increased, diminished or otherwise affected by any transaction entered
into by the Corporation, by any increase or decrease in the net worth of the
Corporation, or by the insolvency or bankruptcy of the Corporation.
8.2 In consideration of the rights granted to Xxxxxxxxx herein,
Xxxxxxxxx hereby releases and forever discharges Magellan and the Corporation
from any and all obligations and liabilities under the Shareholders
Agreement, including without limitation, all obligations and liabilities
arising under the provisions of Sections 2, 3, 4, 5, 6, 7, 11.1 and 12 of the
Shareholders Agreement. In addition, Xxxxxxxxx hereby agrees that in the
event that Magellan desires to purchase all or any of the shares of the
Corporation from Lincoln, Xxxxxxxxx shall have no right to exercise any right
of first refusal with respect thereto, notwithstanding the provisions of
Section 4 of the Shareholders Agreement. However, Xxxxxxxxx and Magellan
acknowledge and agree that Lincoln continues to have a right of first refusal
with respect to the sale of Xxxxxxxxx'x shares of the Corporation, and in the
event that Xxxxxxxxx desires to exercise his option under Section 1.1., 1.2
or 1.3 hereof. Xxxxxxxxx shall give written notice of such intent to Lincoln
at the same time as Xxxxxxxxx gives notice to Magellan of his intent to
exercise such option, and each of Xxxxxxxxx and Magellan acknowledge and
agree that in the event that Lincoln desires to exercise his right of first
refusal under Section 4 of the Shareholders Agreement with respect to
Lincoln's pro rata share of the shares of the Corporation to be sold by
Xxxxxxxxx, then each of Magellan and Xxxxxxxxx shall comply with the
provisions of Section 4 of the Shareholders Agreement with respect thereto,
and in such event, both the number of shares of the Corporation's stock to be
sold to Magellan hereunder, and the number of shares of Magellan's common
stock to be issued to Xxxxxxxxx by Magellan, shall each be reduced
accordingly. Xxxxxxxxx further agrees that in the event that Magellan
presents Xxxxxxxxx with an amendment to the Shareholders Agreement which
incorporates the provisions of this Agreement and imposes no additional
duties, obligations, costs or expenses on Xxxxxxxxx, does not adversely
affect any of his rights under this Agreement, and which includes Lincoln as
a party, Xxxxxxxxx shall execute such agreement and deliver same to Magellan
within 10 days of presentment of such amendment.
9 Representations and Warranties of Magellan. Magellan represents and
warrants to Xxxxxxxxx, as of the date hereof, as follows:
9.1 Magellan is a corporation duly organized, validly existing, and in
good standing under the laws of Delaware.
7
9.2 Magellan has the full corporate power and authority to execute and
deliver this Agreement, to perform hereunder, and to consummate the
transactions contemplated hereby without the necessity of any act, approval
or consent of any other person, entity or governmental authority. This
Agreement, and each and every other agreement, document and instrument to be
executed and delivered by Magellan in connection herewith, constitute or
will, when executed and delivered, constitute the valid and binding
obligation of Magellan, enforceable against it in accordance with their
respective terms.
9.3 The execution and delivery by Magellan of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (i)
violate any provision of the charter or bylaws of Magellan, (ii) violate,
conflict with or result in a breach of any agreement, instrument or
understanding to which Magellan or the Corporation is a party or to which any
of its assets are subject or (iii) violate any order, decree, judgment,
statute, regulation, ordinance or other law or requirement to which Magellan
or any of its parents, subsidiaries or affiliates are subject.
9.4 No consent, approval, authorization, order, filing or registration
by or with any person not a party to this Agreement or any governmental or
quasi-governmental or regulatory agency is required to be obtained by
Magellan or the Corporation with regard to the execution of this Agreement or
of any other agreement or instrument contemplated herein or of the
consummation of the transactions contemplated hereby or thereby.
10 Representations and Warranties of Xxxxxxxxx. Xxxxxxxxx represents and
warrants to Magellan, as of the date hereof, as follows:
10.1 Xxxxxxxxx has the full capacity to execute and deliver this
Agreement, to perform hereunder, and to consummate the transactions
contemplated hereby without the necessity of any act, approval or consent of
any other person or entity whomsoever. This Agreement, and each and every
other agreement, document and instrument to be executed and delivered by
Xxxxxxxxx in connection herewith constitute or will, when executed and
delivered, constitute the valid and binding obligation of Xxxxxxxxx,
enforceable against him in accordance with their respective terms.
10.2 The execution and delivery by Xxxxxxxxx of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (i)
violate, conflict with or result in a breach of any agreement, instrument or
understanding to which Xxxxxxxxx is a party, or (ii) violate any order,
decree, judgment, statute, regulation, ordinance or other law or requirement
to which Xxxxxxxxx is subject.
10.3 Xxxxxxxxx has been represented by legal counsel in the
negotiation of this Agreement, and has reviewed this Agreement with counsel
and fully understands each of the provisions contained herein.
11 Notices. All notices, demands, requests, consents and approvals which
may be or are required to be given or made pursuant to any provisions of this
Agreement shall be given or made in writing and shall be served personally,
by overnight courier or mailed by prepaid certified or
8
registered mail, return receipt requested, to the address of each of the
parties hereto as set forth below:
If to Xxxxxxxxx:
Xx. Xxxx X. Xxxxxxxxx
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxx X. Xxxxxxxx, Esq.
0000 Xxxxxx Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
If to Magellan:
Magellan Health Services, Inc.
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
with a copy to:
J. Xxxx Xxxxxxxx, Esq.
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
or such other address as any of the parties may from time to time advise the
other parties hereto by notice in writing. The date of receipt of any such
notice, demand or request shall be deemed to be the date of giving of such
notice, demand or request if delivered personally, or if mailed or couriered
as aforesaid, the date such notice was delivered to the recipient.
12 Non-Exclusive Remedy. The enforcement by any party hereto of its
rights and remedies pursuant to this Agreement shall not be construed as an
election of remedies or a waiver of any other rights or available remedies
which it may possess in law or equity absent this Agreement. The failure of
any party hereto to enforce the terms of this Agreement on one or more
occasions shall not act to waive any of such party's rights with respect to
any subsequent breach of this Agreement by any other party.
13 Equitable Relief. Each of the parties hereto hereby acknowledges and
agrees that a breach by such party of any of the provisions contained in this
Agreement will cause the other party irreparable
9
injury and damage. By reason thereof, each party hereby agrees that the
other party shall be entitled, in addition to any other remedies it may have
under this Agreement or otherwise and without the posting of any bond, to
preliminary and permanent injunctive and other equitable relief to prevent or
curtail any breach of this Agreement; provided, however, that no
specification in this Agreement of a specific legal or equitable remedy shall
be construed as a waiver or prohibition against the pursuing of other legal
or equitable remedies in the event of such a breach.
14 Severability; Independence of Covenants. In the event that any one or
more of the provisions of this Agreement or any word, phrase, clause,
sentence or other portion thereof shall be deemed to be illegal or
unenforceable for any reason, such provision or portion thereof shall be
modified or deleted in such a manner so as to make this Agreement, as
modified, legal and enforceable to the fullest extent permitted under
applicable laws without destroying the purpose and intent of this Agreement.
Each of the parties hereto does hereby expressly authorize any court of
competent jurisdiction to enforce any such provision or portion thereof or to
modify any such provision or portion thereof in order that any such provision
or portion thereof shall be enforced by such court to the fullest extent
permitted by applicable laws.
15 Counterparts. This Agreement may be executed in multiple counterpart
copies, each of which will be considered an original and all of which
constitute one and the same instrument, binding on all parties hereto, even
though all the parties are not signatory to the same counterpart.
16 Assignment. Xxxxxxxxx acknowledges and agrees that he may not assign,
pledge or otherwise dispose of any of his rights under this Agreement without
the prior written consent of Magellan, which may be granted or denied in its
sole discretion; provided however, that in the event of the death of
Xxxxxxxxx, this Agreement shall be binding upon, inure to the benefit of, and
be enforceable by the respective administrators, legal representatives,
personal representatives and heirs of Xxxxxxxxx. Magellan acknowledges and
agrees that it may not assign, delegate or otherwise dispose of any of its
duties or obligations under this Agreement.
17 Amendments. This Agreement may not be amended except in a writing duly
executed by each of the parties hereto.
18 Construction. The parties acknowledge and agree that this Agreement is
the result of extensive negotiations between the parties and their respective
counsel, and that this Agreement shall not be construed against either party
by virtue of its role or its counsel's role in the drafting hereto.
19 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Georgia which apply to a
contract executed and to be performed entirely within the State of Georgia,
without regard to principles of conflicts of laws.
20 Headings. The headings in this Agreement are provided for convenience
of reference only and are not to be deemed a part of this Agreement.
21 Conflicts With By-Laws. In the event of a conflict between the
provisions of this Agreement and the By-laws of the Corporation, the
provisions of this Agreement shall govern the conflicting By-law provision.
10
22 Attorneys' Fees. In the event of any dispute or litigation between
Magellan (and/or any of its affiliates) and Xxxxxxxxx arising from or in
connection with this Agreement or with respect to the subject matter of the
Mutual Release, the prevailing party shall be entitled to recover from the
other party all reasonable costs and expenses incurred in connection
therewith, including without limitation, reasonable attorneys' fees.
23 Entire Agreement. This Agreement, together with the Mutual Release
entered into as of the date hereof by and between Magellan, the Corporation
and Xxxxxxxxx, constitutes the entire agreement among the parties hereto and
supersedes and cancels any prior agreements, representations, warranties, or
communications, whether oral, written or collateral, among the parties hereto
relating to the transactions contemplated hereby or the subject matter
herein. The parties hereto acknowledge that notwithstanding anything to the
contrary contained herein, this Agreement shall not operate or be construed
in any manner to affect or modify any of Lincoln's rights under the
Shareholders Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
XXXXXXXXX:
Witness:
[illegible] /s/ Xxxx X. Xxxxxxxxx
------------------------------ -------------------------------------
Xxxx X. Xxxxxxxxx
MAGELLAN:
Magellan Health Services, Inc.
Attest: By: Xxxxx X. XxXxxxxx (SEAL)
-------------------------------------
Name: Xxxxx XxXxxxxx
------------------------------
Title: Executive Vice President,
[illegible] Finance & Accounting (CFO)
------------------------------ ------------------------------
12