EXHIBIT 2
VOTING TRUST AGREEMENT
AGREEMENT, dated April 15, 1997, by and among Warburg, Xxxxxx
Ventures, L.P., a Delaware limited partnership ("Warburg"), and Xxxxxxx X.
Xxxxxxx, Xxxx Xxxxxxxx and Xxxxxxxx X. Xxxx (who together with any successor or
successors hereunder are hereinafter called the "Trustees"):
WHEREAS, Warburg has entered into a Securities Purchase
Agreement, dated as of April 2, 1997 (the "Purchase Agreement"), by and among
Warburg, Coventry Corporation, a Tennessee corporation ("Coventry"), and
Franklin Capital Associates III L.P., a Delaware limited partnership;
WHEREAS, pursuant to the Purchase Agreement, and subject to
certain conditions set forth therein, Warburg has acquired the right to purchase
from Coventry (i) a convertible, exchangeable senior subordinated note (the
"Note") issued by Coventry in the aggregate principal amount of $36,000,000 and
(ii) warrants issued by Coventry (the "Warrants"), initially evidencing the
right to purchase an aggregate of 2,117,647 shares of the common stock, par
value $0.01 per share of Coventry (the "Common Stock"), subject to certain
adjustments as set forth in the Warrants;
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WHEREAS, Warburg deems it in its best interests, as well as in
the best interests of Coventry, to vest in the Trustees as herein provided the
power to vote all of the shares of Series A Preferred Stock for which the Note
may be exchanged, all additional shares of Series A Preferred Stock that may be
issued in lieu of a payment of cash dividends on the Series A Preferred Stock,
all of the shares of Common Stock into which the Note and any Interest Notes (as
defined in the Purchase Agreement) may be converted, all of the shares of Common
Stock issuable upon exercise of the Warrants and all other shares of the capital
stock of Coventry hereinafter issued to Warburg pursuant to the Purchase
Agreement during the term of this Agreement (collectively, the "Stock"); and
WHEREAS, Warburg has directed that, during the term of this
Agreement, stock certificates representing the Stock be issued to the Trustees,
as Trustees, if, when and as the Stock is issued pursuant to the Purchase
Agreement, for the purpose of vesting in the Trustees the right to vote the
Stock for the period and upon the terms and conditions stated herein, and that
it appear in such Stock when issued that the same has been issued to the
Trustees, as Trustees, pursuant to this Agreement, and that Coventry cause such
issuance to be duly noted on its books and records.
NOW, THEREFORE, in consideration of the premises, of the
mutual covenants herein contained, of ONE DOLLAR ($1.00) paid
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by Warburg to the Trustees, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, it is agreed by and
among Warburg and the Trustees as follows:
(1) For the duration of this Agreement, the Trustees shall
have the sole, exclusive, absolute, and unqualified power to (i) vote the Stock
with discretion as to how to vote the Stock and (ii) execute stockholders'
consents at every annual and special meeting of the stockholders of Coventry and
in any and all proceedings wherein the vote or consent of such stockholders may
be required or authorized and to vote upon any and all questions arising
thereat.
(2) The Trustees may act hereunder either by a vote of a
majority of the Trustees, in person, at a meeting duly called and held, and such
vote shall be deemed the decision or act of all of the Trustees, or by a written
instrument without a meeting of the Trustees signed by a majority of the
Trustees. The Trustees may adopt their own rules of procedure and shall keep
reasonable minutes of their proceedings and shall keep a record of the trust
certificates issued hereunder.
(3) The Trustees hereby accept the trust created, and covenant
and agree faithfully and diligently to perform the covenants and agreements
contained herein.
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(4) If requested by Warburg, the Trustees shall issue a trust
certificate, which shall be in substantially the form of Schedule A hereto.
(5) Warburg shall be entitled to receive and disburse in its
sole discretion any and all cash dividends declared on the Stock and, if the
same be paid to the Trustees, such dividends shall be disbursed by the Trustees
to Warburg forthwith. The Trustees shall be entitled to receive dividends paid
in-kind on the Stock, or any distributions made in the form of shares of capital
stock of Coventry which shall be held by the Trustees subject to the terms of
this Agreement, and the Trustees shall issue trust certificates representing
such stock certificates to Warburg, if so requested.
(6) This Agreement and the voting trust hereby created shall
be irrevocable and continue in force for ten (10) years from the date hereof,
unless at any time Warburg shall be deemed to own beneficially (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934) less than ten
percent (10%) of the then outstanding shares of Common Stock (a "Termination
Event"), in which case this Agreement and the voting trust created hereby shall
be terminated upon written notice from Warburg to the Trustees. Upon
termination, the Trustees, upon surrender to them of any outstanding trust
certificates or the receipt by them of a proper acquittance from Warburg, and,
upon
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payment of any stamp taxes or other governmental charges in connection with such
surrender and delivery, will cause to be delivered to Warburg or its successors
or assigns certificates of capital stock of Coventry in amounts corresponding to
the Stock issued, delivered or transferred to the Trustees at any time pursuant
to this Agreement.
(7) Except in the case of a Termination Event, Warburg agrees
that at least thirty (30) calendar days prior to the termination of this
Agreement to notify the Department of Insurance of each of the states listed on
Schedule B hereto of its intention either to extend this Agreement for an
additional period or to have application made for approval of the acquisition of
control of Coventry pursuant to the applicable provisions of the respective
insurance laws of each of the states listed on Schedule B hereto, if necessary.
(8) This Agreement may be amended by unanimous action of the
Trustees and Warburg provided that such amendment is reviewed and approved by
the applicable Department of Insurance of each of the states listed on Schedule
B hereto.
(9) No Trustee shall assume any responsibility or incur any
liability as stockholder, trustee or otherwise, or by reason of any error of
judgment or mistake of law or other mistake, or for any act or omission of any
other Trustee or of any agent or attorney employed by the Trustees or for the
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misconstruction of this Agreement, or for any action taken or omitted thereunder
or believed by him to be in accordance with the provisions and intentions
thereof, or otherwise, except for his own willful misconduct. Any Trustee may
be, act and receive compensation as, a director or officer of, or be otherwise
associated with, Coventry.
(10) Any Trustee or successor Trustee may at any time resign
by delivering to the other Trustees and to Warburg his resignation in writing.
Any Trustee or successor Trustee shall be deemed to have resigned automatically
without further action on the part of such Trustee or successor Trustee in the
event such Trustee or successor Trustee is not employed for any reason by X.X.
Xxxxxxx, Xxxxxx & Co., LLC ("EMW"), any successor to EMW or any affiliate of
EMW. In the event of a vacancy or vacancies occurring in the office of Trustee
or successor Trustee through the death, incapacity, resignation, refusal to act,
removal from his position as an employee or partner of Warburg, or any of its
affiliates, or removal from the role of Trustee under this Agreement, in the
sole discretion of Warburg, of an original Trustee or of a successor Trustee,
the remaining Trustees may appoint a successor Trustee to fill such vacancy upon
the recommendation and prior written approval of Warburg, by an instrument in
writing, signed by the remaining Trustees and Warburg, a copy of which shall be
kept on file at the registered office of Warburg. The appointment of a successor
Trustee and
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his capacity to act as such shall be subject to the prior review by and approval
of the applicable Department of Insurance of each of the states listed on
Schedule B hereto. The successor Trustee so appointed shall be clothed with all
the rights, privileges, duties and powers conferred upon the Trustees herein
named.
(11) Upon the appointment of a successor Trustee, a new
certificate or certificates for the Stock may be issued in the names of the
Trustees at that time duly appointed hereunder.
(12) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State, without giving effect to the
choice of law provisions thereof.
(13) This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties.
(14) This Agreement constitutes the entire understanding of
the parties hereto and supersedes all prior agreements or understandings with
respect to the subject matter hereof among the parties.
(15) In the event that any part or parts of this Agreement
shall be held illegal and unenforceable by any court or administrative body of
competent jurisdiction, such determination
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shall not affect the remaining provisions of this Agreement which shall remain
in full force and effect.
(16) The Trustees hereby agree that they will not assert
against the limited partners of Warburg any claim they may have under this
Agreement by reason of any failure or alleged failure by Warburg to meet its
obligations hereunder.
(17) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the date first above written.
WARBURG, XXXXXX VENTURES, L.P.
By: Warburg, Xxxxxx & Co.,
its General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
TRUSTEES:
/s/ Xxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxx
/s/ Xxxx Xxxxxxxx
-------------------------
Name: Xxxx Xxxxxxxx
/s/ Xxxxxxxx X. Xxxx
-------------------------
Name: Xxxxxxxx X. Xxxx
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SCHEDULE A
CERTIFICATE
of the Trustees for WARBURG, XXXXXX VENTURES, L.P.
for stock of Coventry Corporation under the Voting
Trust Agreement, dated as of April 15, 1997, by and
among the Trustees named therein and Warburg, Xxxxxx
Ventures, L.P., a Delaware limited partnership (the
"Voting Trust Agreement").
Description of
No.________ Stock: _______________
THIS IS TO CERTIFY THAT, upon the termination of the Voting
Trust Agreement, upon the surrender hereof and upon payment of all stamp taxes
or governmental charges, WARBURG, XXXXXX VENTURES, L.P., or its successors or
assigns, will be entitled to any securities of COVENTRY CORPORATION held by the
undersigned as Trustees, subject and pursuant to the terms, conditions and
stipulations of the Voting Trust Agreement (the "Voting Trust Agreement") which
have been acquired pursuant to that certain Securities Purchase Agreement, dated
as of April 2, 1997, by and among Coventry Corporation, a Delaware corporation,
Warburg, Xxxxxx Ventures, L.P., a Delaware limited partnership, and Franklin
Capital Associates III L.P., a Delaware limited partnership or the Voting Trust
Agreement.
This certificate is transferable only on the books of the
Trustees by the holder thereof, in person or by attorney, upon surrender of his
certificate, properly endorsed and upon payment of all stamp taxes and other
governmental charges in connection therewith; whereupon a like new certificate
will be issued to the proper owner thereof of record.
IN WITNESS WHEREOF, the undersigned Trustees, pursuant to said
Voting Trust Agreement have hereunto set their hands and seals, this ____ day of
____________.
____________________________
____________________________
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SCHEDULE B
Illinois
Missouri
Ohio
Pennsylvania
Texas
Virginia
West Virginia
