Exhibit 10.1
OPTION AGREEMENT (this "Agreement"), dated as of August 1,
2002, between OMEGA WORLDWIDE, INC., a Maryland corporation
("Omega"), and FOUR SEASONS HEALTH CARE LIMITED, a private
limited company organized under the laws of England and
Wales ("Four Seasons").
WHEREAS, Omega, Four Seasons and Delta I Acquisition Inc., a Delaware
corporation and a newly formed wholly owned indirect subsidiary of Four
Seasons ("Omega Acquisition"), have contemporaneously with the execution of
this Agreement entered into an Agreement and Plan of Merger, dated as of
the date hereof (the "Merger Agreement"), which provides, among other
things, that upon the terms and subject to the conditions thereof, Omega
Acquisition will commence a tender offer (the "Offer") for all of the
issued and outstanding shares of common stock of Omega (the "Omega Common
Stock") and, after accepting for payment and paying for the Omega Common
Stock validly tendered and not withdrawn pursuant to the Offer (the
"Tendered Shares"), Omega Acquisition shall merge with and into Omega with
Omega continuing as the surviving entity as a wholly owned subsidiary of
Four Seasons; and
WHEREAS, as an essential condition and inducement to Four
Seasons' entering into the Merger Agreement and in consideration therefor,
Omega has agreed to grant Four Seasons the Option (as hereinafter defined);
and
WHEREAS, capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed thereto in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and in the Merger Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. Grant of Option.
Omega hereby grants to Four Seasons an irrevocable option (the
"Option") to purchase for a price per share equal to the Offer Price (the
"Option Price"), subject to the terms hereof, a number of fully paid and
nonassessable shares of Omega Common Stock (such shares being referred to
herein as the "Option Shares") equal to the Applicable Omega Common Stock
Amount (as hereafter defined). The "Applicable Omega Common Stock Amount"
shall be the number of shares of Omega Common Stock which, when added to
the number of shares of Omega Common Stock owned by Omega Acquisition
immediately prior to the exercise of the Option, would result in Omega
Acquisition owning, in the aggregate, immediately after exercise of the
Option no more than 90.0% of the then outstanding shares of Omega Common
Stock; provided, however, that in no event shall the Applicable Omega
Common Stock Amount exceed 19.8% of the Omega Common Stock then issued and
outstanding (without giving effect to any shares of Omega Common Stock
issued pursuant to the Option).
2. Exercise of Option.
(a) Exercise of Option. Four Seasons may exercise the Option if, but
only if (a) Omega Acquisition shall have accepted for payment and paid for all
Omega Common Stock validly tendered and not withdrawn pursuant to the Offer
and (b) after giving effect to such exercise, the Omega Acquisition would
own 90.0% of the then outstanding shares of Omega Common Stock.
(b) Expiration of the Option. The Option shall expire on the date thirty
(30) Business Days after the expiration of the Offer, if not exercised on or
prior thereto. Notwithstanding the expiration of the Option, and provided
that the conditions set forth in Section 2(a) hereof have been satisfied,
Four Seasons shall be entitled to purchase those Option Shares with respect
to which it may have exercised the Option in accordance with the terms
hereof prior to the expiration of the Option, and the expiration of the
Option will not affect any rights hereunder which by their terms do not
terminate or expire prior to or at such expiration.
(c) Notice of Exercise; Closing. In the event that Four Seasons is
entitled to and desires to exercise the Option, it shall send to Omega a written
notice (such notice being herein referred to as an "Exercise Notice" and
the date of issuance of an Exercise Notice being herein referred to as the
"Notice Date'") indicating that Four Seasons is exercising the Option and
specifying (i) the total number of Option Shares that it will purchase
pursuant to such exercise and (ii) a place and date not earlier than one
(1) Business Day and not later than five (5) Business Days from the Notice
Date for the closing of such purchase (the "Option Closing Date").
(d) Purchase Price. At the Option Closing Four Seasons shall pay the
full purchase price for the Option Shares being purchased under the Option in
immediately available funds by wire transfer to a bank account designated
by Omega; provided that the failure by Four Seasons to effect such a wire
transfer because of a failure or refusal of Omega to designate such a bank
account shall not relieve Omega of its obligations under Section 2(e) at
the Option Closing.
(e) Issuance of Option Shares. At the Option Closing,
simultaneously with the payment of the purchase price therefor as provided
in Section 2(d), Omega shall deliver to Four Seasons a certificate or
certificates representing the number of Option Shares purchased by Four
Seasons. If at the time of issuance of the Option Shares Omega shall have
issued any rights or other securities which are attached to or otherwise
associated with the Omega Common Stock, then each Option Share issued
pursuant to such exercise shall also represent such rights or other
securities with terms substantially the same as and at least as favorable
to Four Seasons as are provided under any shareholder rights agreement or
similar agreement of Omega then in effect.
(f) Record Holder; Expenses. Upon the delivery by Four Seasons to Omega
of the Exercise Notice and the tender of the applicable Option Price in
immediately available funds, Four Seasons shall be deemed to be the holder of
record of the Option Shares issuable upon such exercise, notwithstanding that
the stock transfer books of Omega may then be closed, that certificates
representing such Option Shares may not then have been actually delivered to
Four Seasons or that Omega may have failed or refused to designate the bank
account described in Section 2(d). Omega shall pay all expenses that may be
payable in connection with the preparation. issuance and delivery of stock
certificates and/or substitute option agreement under this Section 2 in the
name of Four Seasons or its assignee, transferee or designee and any filing
fees and other expenses arising from compliance by Four Seasons with any
requirements of any Governmental Entity.
3. Investment Intent. Four Seasons represents and warrants that it is
entering into this Agreement and is acquiring and/or will acquire the
Option Securities (as defined below) for its own account and not with a
view to resale or any public distribution of all or any part of the Option
Securities in violation of applicable Law.
4. Evaluation of Investments. Four Seasons, by reason of its knowledge
and experience in financial and business matters, believes itself capable of
evaluating the merits and risks of an investment in the Option and the
Option Shares to be purchased pursuant to this Agreement (collectively, the
"Option Securities").
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5. Reservation of Shares. Omega agrees (i) that it shall at all times
maintain, free from preemptive rights, sufficient authorized but unissued
or treasury shares of Omega Common Stock (or Other Option Securities (as
defined below)) issuable pursuant to this Agreement so that the Option may
be exercised without additional authorization of shares of Omega Common
Stock (or Other Option Securities) after giving effect to all other
options, warrants, convertible securities and other rights to purchase
Omega Common Stock (or Other Option Securities); (ii) that it will not, by
charter amendment or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek
to avoid the observance or performance of any of the covenants to be
observed or performed hereunder by Omega; and (iii) promptly to take all
action as may from time to time be required in order to permit Four Seasons
to exercise the Option and Omega to duly and effectively issue Omega Common
Stock (or Other Option Securities) pursuant hereto.
6. Lost Options. Upon receipt by Omega of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Omega will execute and deliver a new agreement of
like tenor and date.
7. Adjustment Upon Changes in Capitalization. The number of Option
Shares purchasable upon the exercise of the Option shall be subject to
adjustment from time to time as provided in this Section 7.
(a) Transaction Adjustment. In the event of any change in Omega Common
Stock by reason of stock dividends, splits, mergers, recapitalizations,
combinations, subdivisions, conversions, exchanges of shares or other
similar transactions, then the Option Shares purchasable upon exercise
hereof shall be appropriately adjusted so that Four Seasons shall receive
upon exercise of the Option and payment of the aggregate Option Price
hereunder the number and class of shares or other securities (any such
shares or other securities referred to herein as "Other Option Securities")
or property (including cash) that Four Seasons would have owned or been
entitled to receive after the happening of any of the events described
above if the Option had been exercised immediately prior to such event, or
the record date therefor, as applicable.
(b) Option Price Adjustment. Whenever the number of Option Shares
subject to this Option are adjusted pursuant to Section 7(a), the Option Price
shall be appropriately adjusted, if applicable, by multiplying the Option Price
by a fraction, the numerator of which shall be equal to the aggregate
number of Option Shares purchasable under the Option prior to the
adjustment and the denominator of which shall be equal to the aggregate
number of Option Shares purchasable under the Option immediately after the
adjustment.
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8. Extension of Time for Regulatory Approvals. The periods related to
exercise of the Option and the other rights of Four Seasons hereunder shall
be extended (i) to the extent necessary to obtain all regulatory approvals
for the exercise of such rights, and for the expiration of all statutory
waiting periods and (ii) to the extent necessary to avoid liability under
Section 10(b) of the Exchange Act by reason of such exercise.
9. Representations and Warranties of Omega. Omega hereby represents and
warrants to Four Seasons as follows:
(a) Authority, etc. Omega has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Omega and no other corporate proceedings
on the part of Omega are necessary to authorize this Agreement or to consummate
the transactions so contemplated. This Agreement has been duly and validly
executed and delivered by Omega and constitutes the legal, valid and binding
obligation of Omega, enforceable against Delta In accordance with the terms
hereof.
(b) Corporate Action. Omega has taken all necessary action to authorize
and reserve and to permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with its terms will
have reserved for issuance upon the exercise of the Option, that number of
shares of Omega Common Stock equal to the maximum number of shares of Omega
Common Stock at any such time and from time to time issuable hereunder, and
all such shares of Omega Common Stock, upon issuance pursuant hereto, will
be duly authorized, validly issued, fully paid, nonassessable, and will be
delivered free and clear of all Liens created by Omega and not subject to
any preemptive rights.
(c) No Conflict. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby and compliance
with the terms hereof will not, conflict with, result in any violation of
or default (with or without notice or lapse of time or both) under, any
provision of any agreement, loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise, license, judgment, order, notice, decree, statute, law,
ordinance, rule or regulation applicable to Omega or Omega's property or
assets. No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or other governmental authority or instrumentality, domestic, foreign or
supranational, is required by or with respect to Delta In connection with
the execution and delivery of this Agreement or the consummation by Omega
of the transactions contemplated hereby.
(d) Anti-takeover Statutes. The provisions of any applicable state
takeover law or applicable Charter provision containing change of control or
anti-takeover provisions will not, prior to the termination of this Agreement,
apply to this Agreement or the transactions contemplated hereby and thereby.
Omega has taken, and will in the future take, all steps necessary to (i)
irrevocably exempt the transactions contemplated by this Agreement from any
other applicable state takeover law and from any applicable Charter provision
containing change of control or anti-takeover provisions and (ii) waive the
ownership limit contained in the Charter with respect to any Omega Common Stock
or Other Option Securities acquired by Four Seasons pursuant to the Option.
10. Assignment. Omega may not assign any of its rights or obligations
under this Agreement to any other Person, without the express written consent of
Four Seasons. Four Seasons may not assign any of its rights or obligations
under this Agreement to any other Person, except that Four Seasons may
assign its rights hereunder to any Affiliate of Four Seasons, including
Omega Acquisition.
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11. Application for Regulatory Approval. Each of Four Seasons and Omega
will use its reasonable efforts to make all flings with, and to obtain
consents of, all third parties and Governmental Entities necessary to the
consummation of the transactions contemplated by this Agreement; provided
that neither Omega nor Four Seasons nor any subsidiary or affiliate thereof
will be required to agree to any divestiture by itself or any of its
affiliates of shares of capital stock or of any business, assets or
property, or the imposition of any material limitation on the ability of
any of them to conduct their businesses or to own or exercise control of
such assets, properties and stock.
12. Specific Performance. The parties hereto acknowledge that damages
would be an inadequate remedy for a breach of this Agreement by either party
hereto and that the obligations of the parties hereto shall be enforceable by
either party hereto through injunctive or other equitable relief.
13. Severabilitv. 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. 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 to the fullest extent
permitted by applicable law in a mutually acceptable manner in order that
the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
14. Notices. All notices, claims, demands and other communications
hereunder shall be deemed to have been duly given or made when delivered in
accordance with Section 9.4 of the Merger Agreement.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Maryland, regardless of the laws
that might otherwise govern under applicable principles of conflicts of
laws thereof. The state or Federal courts located within the State of
Maryland shall have jurisdiction over any and all disputes between the
parties hereto, whether in law or equity, arising out of or relating to
this agreement and the agreements, instruments and documents contemplated
hereby and the parties consent to and agree to submit to the jurisdiction
of such courts. Each of the parties hereby waives and agrees not to asset
in any such dispute, to the fullest extent permitted under applicable law,
any claim that (i) such party is not personally subject to the jurisdiction
of such courts, (ii) such party and such party's property is immune from
any legal process issued by such courts or (iii) any litigation or other
proceeding commenced in such courts is brought in an inconvenient forum.
The parties hereby agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in
Section 9.4 of the Merger Agreement, or in such other manner as may be
permitted by law, shall be valid and sufficient service thereof and hereby
waive any objections to service accomplished in the manner herein provided.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original, but all of
which shall constitute one and the same agreement.
17. Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement, each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
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18. Entire Agreement. Except as otherwise expressly provided herein or
in the Merger Agreement, this Agreement contains the entire agreement between
the parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereto,
written or oral. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto, and their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
provided herein. Any provision of this Agreement may be waived only in
writing at any time by the party that is entitled to the benefits of such
provision.
19. Amendment. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
20. Further Assurances. In the event of any exercise of the Option by
Four Seasons, Omega and Four Seasons shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary to the fullest extent permitted by law in order to consummate the
transactions provided for by such exercise. Nothing contained in this Agreement
shall be deemed to authorize Omega or Four Seasons to breach any provision of
the Merger Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Option
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
OMEGA WORLDWIDE, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President and Secretary
FOUR SEASONS HEALTH CARE LIMITED
By: /s/ Xxxxxxxx Xxxxxxx
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Name: Xxxxxxxx Xxxxxxx
Title: Director
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