Exhibit
10.1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of December 20, 2006
(this “ Agreement ”), between NATIONAL
HEALTHCARE CORPORATION, a Delaware corporation (“
Parent ”), and NATIONAL HEALTH REALTY, INC., a
Maryland corporation (“ Company ”), and each
stockholder of Parent and Company whose name and signature is set
forth on the signature page hereof (collectively, the “
Stockholders ,” and each, a “ Stockholder
”).
WHEREAS, Davis Acquisition Sub LLC, a Delaware
corporation and a wholly-owned subsidiary of NHC/OP (“
Merger Subsidiary ”), NHC/OP, L.P., a Delaware limited
partnership (“ NHC/OP ”), Parent and Company
are, concurrently with the execution hereof, entering into an
Agreement and Plan of Merger (the “ Merger Agreement
”);
WHEREAS, pursuant to the Merger Agreement, a
successor to Company will merge with and into Merger Subsidiary,
with Merger Subsidiary being the surviving entity (the “
Merger ”), and upon the consummation of the Merger
each share of common stock of the successor to Company, par value
$0.01 per share, will be converted into the right to receive the
Merger Consideration;
WHEREAS, each Stockholder is the record and/or
beneficial owner of such number of shares of common stock of
Parent, par value $0.01 per share (the “ Parent Common
Stock ”), or shares of common stock of Company, par value
$0.01 per share (the “ Company Common Stock ”)
as the case may be, as is set forth opposite such
Stockholder’s name on Schedule I hereof (collectively, the
“ Existing Shares ”);
WHEREAS, each Stockholder acknowledges that
Merger Subsidiary, NHC/OP, Parent and Company are entering into the
Merger Agreement in reliance on the representations, warranties,
covenants and other agreements of such Stockholder set forth in
this Agreement and would not enter into the Merger Agreement if
each such Stockholder did not enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing
and the respective representations, warranties, covenants and
agreements set forth herein and in the Merger Agreement, and
intending to be legally bound hereby, Parent, Company and each
Stockholder agree as follows:
1.
Defined Terms
. Capitalized terms used herein
without definition shall have the meanings assigned to such terms
in the Merger Agreement. The following words have the meanings
given to them below.
“ beneficial ownership ” has
the meaning set forth in Rule 13d-3 under the Exchange
Act.
“ Consolidation ” means the
consolidation of Company with its wholly-owned subsidiary pursuant
to the Articles of Consolidation, as a result of which a new
Maryland corporation shall be formed which (i) shall assume the
corporate name “National Health Realty, Inc.,” (ii)
shall have as its outstanding stock only the stock of Company
outstanding immediately prior to the effectiveness of such
consolidation, and (iii) shall succeed to the business, properties,
assets and rights and become subject to all of the obligations and
liabilities of Company, including the Merger Agreement.
“ Exchange Act ” means the
Securities Exchange Act of 1934, as amended.
“ person ” has the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange
Act.
“ Representative ” with
respect to any person who is an individual, any affiliate of such
person (including any family member or any entity controlled by
such person), or any agent, representative or advisor of such
person, including any investment banker, attorney or accountant
retained by such person or any of such person’s
affiliates.
“ Shares ” means, (i) with
respect to each Stockholder of Company, all Existing Shares of such
Stockholder that are shares of Company Common Stock, and any shares
of Company Common Stock, beneficial ownership of which is acquired
by such Stockholder after the date hereof, including, without
limitation, shares acquired by purchase or upon the exercise,
conversion or exchange of any option, warrant or convertible
security, and (ii) with respect to each Stockholder of Parent, all
Existing Shares of such Stockholder that are shares of Parent
Common Stock, and any shares of Parent Common Stock, beneficial
ownership of which is acquired by such Stockholder after the date
hereof, including without limitation, shares acquired by purchase
or upon the exercise, conversion or exchange of any option, warrant
or convertible security.
“ Support Documents ” means
this Agreement and all other agreements, instruments and other
documents executed and delivered by each Stockholder in connection
with this Agreement.
“ Termination Time ” means the
earliest of the following: (i) the time at which Parent and Company
give joint written notice to each of the Stockholders that the
Termination Time has occurred; (ii) the Effective Time; and
(iii) the time at which the Merger Agreement terminates
pursuant to Section 7.01 thereof.
“ Voting Shares ” means, (i)
with respect to each Stockholder of Company, such
Stockholder’s Shares, not including Shares that are the
subject of unexercised options, warrants, rights or convertible
securities, and (ii) with respect to each Stockholder of Parent,
such Stockholder’s Shares, not including Shares that are the
subject of unexercised options, warrants, rights or convertible
securities.
(a) In order to induce Merger Subsidiary and Parent
to enter into the Merger Agreement, each Stockholder of Company
hereby agrees that, from and after the date hereof and until the
Termination Time, at any meeting of the stockholders of Company,
however called, or in connection with any written consent of the
stockholders of Company, such Stockholder shall appear at each such
meeting, in person or by proxy, or otherwise cause such
Stockholder’s Voting Shares to be counted as present thereat
for purposes of establishing a quorum, and each such Stockholder
shall vote (or cause to be voted) or act by written consent with
respect to all of its Voting Shares that are beneficially owned by
each such Stockholder or its affiliates or as to which such
Stockholder has, directly or indirectly, the right to vote or
direct the voting, (i) in favor of adoption and approval of
the Merger Agreement, the Consolidation and the Merger and the
approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement and this Agreement;
(ii) against any action or agreement that would result in a
breach of any covenant, representation or warranty or any other
obligation or agreement of Company contained in the Merger
Agreement or of any Stockholder of Company contained in this
Agreement; (iii) against
any Company
Takeover Proposal; and (iv) against any other action,
agreement or transaction (other than the Merger Agreement and the
transactions contemplated thereby) that is intended, or could
reasonably be expected, to impede, interfere or be inconsistent
with, delay, postpone, discourage or materially adversely affect
the Consolidation, the Merger or the performance by each of the
Stockholders of Company of such Stockholder’s obligations
under this Agreement, including, but not limited to (A) any
extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving Company or
any of its Subsidiaries (other than the Consolidation or the
Merger); (B) a sale, lease or transfer of a material amount of
assets of Company or any of its Subsidiaries or a reorganization,
recapitalization or liquidation of Company or any of its
Subsidiaries; (C) a material change in the policies or
management of Company; (D) an election of new members to the
board of directors of Company; (E) any material change in the
present capitalization or dividend policy of Company or any
amendment or other change to Company’s articles of
incorporation (other than as contemplated in the Merger Agreement);
or (F) any other material change in Company’s corporate
structure (other than as contemplated in the Merger Agreement) or
business. Each Stockholder of Company hereby agrees that such
Stockholder will not enter into any voting or other agreement or
understanding with any person or entity or grant a proxy or power
of attorney with respect to such Stockholder’s Shares prior
to the Termination Time (other than a proxy or power of attorney to
an officer of Parent that may be exercised solely in accordance
with this Section 2 and except as provided in Section 3 below)
or vote or give instructions in any manner inconsistent with
clauses (i), (ii), (iii) or (iv) of the preceding sentence. Each
Stockholder of Company hereby agrees, during the period commencing
on the date hereof and ending on the Termination Time, not to vote
or execute any written consent in lieu of a stockholders meeting or
vote, if such consent or vote by the stockholders of Company would
be inconsistent with or frustrate the purposes of the other
covenants of such Stockholder pursuant to this
paragraph.
(b) In order to induce Company to enter into the
Merger Agreement, each Stockholder of Parent hereby agrees that,
from and after the date hereof and until the Termination Time, at
any meeting of the stockholders of Parent, however called, or in
connection with any written consent of the stockholders of Parent,
such Stockholder shall appear at each such meeting, in person or by
proxy, or otherwise cause such Stockholder’s Voting Shares to
be counted as present thereat for purposes of establishing a
quorum, and each such Stockholder shall vote (or cause to be voted)
or act by written consent with respect to all of its Voting Shares
that are beneficially owned by each such Stockholder or its
affiliates or as to which such Stockholder has, directly or
indirectly, the right to vote or direct the voting, (i) in favor of
the establishment and issuance of the Series A Convertible
Preferred Stock of Parent (including any related amendment to the
certificate of incorporation of Parent) pursuant to and in
accordance with the Merger Agreement and in favor of adoption and
approval of this Agreement; (ii) against any action or agreement
that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of any Stockholder of
Parent contained in this Agreement; and (iii) against any other
action, agreement or transaction that is intended, or could
reasonably be expected, to impede, interfere or be inconsistent
with, delay, postpone, discourage or materially adversely affect
the performance by each of the Stockholders of Parent of such
Stockholder’s obligations under this Agreement. Each
Stockholder of Parent hereby agrees that such Stockholder will not
enter into any voting or other agreement or understanding with any
person or entity or grant a proxy or power of attorney with respect
to such Stockholder’s Shares prior to the Termination Time
(other than a proxy or power of attorney to an officer of Company
that may be exercised solely in accordance with this Section 2 and
except as provided in Section 3 below) or vote or give instructions
in any manner inconsistent with clauses (i), (ii) or (iii) of the
preceding sentence. Each Stockholder of Parent hereby agrees,
during the period commencing on the date hereof and ending on the
Termination Time, not to vote or execute any written consent in
lieu of a
stockholders
meeting or vote, if such consent or vote by the stockholders of
Parent would be inconsistent with or frustrate the purposes of the
other covenants of such Stockholder pursuant to this
paragraph.
(a) As security for its obligations under Section 2
hereof, each Stockholder of Company hereby grants to, and appoints,
Robert Adams, Donald Daniel and John Lines, in their respective
capacities as officers of Parent, and any individual who shall
hereafter succeed to any such officer of Parent, and any other
person designated in writing by Parent, each of them individually,
such Stockholder’s proxy and attorney-in-fact (with full
power of substitution) to vote or act by written consent, to the
fullest extent permitted by and subject to applicable law, with
respect to such Stockholder’s Shares in accordance with
Section 2 hereof. THIS PROXY IS COUPLED WITH AN INTEREST, SHALL BE
IRREVOCABLE AND SHALL TERMINATE AT THE TERMINATION TIME. Each
Stockholder of Company will take such further action or execute
such other instruments as may be necessary to effectuate the intent
of this proxy and hereby revokes any proxy previously granted by
such Stockholder with respect to such Stockholder’s
Shares.
(b) As security for its obligations under Section 2
hereof, each Stockholder of Parent hereby grants to, and appoints,
Robert Adams, Donald Daniel and John Lines, in their respective
capacities as officers of Company, and any individual who shall
hereafter succeed to any such officer of Company, and any other
person designated in writing by Company, each of them individually,
such Stockholder’s proxy and attorney-in-fact (with full
power of substitution) to vote or act by written consent, to the
fullest extent permitted by and subject to applicable law, with
respect to such Stockholder’s Shares in accordance with
Section 2 hereof. THIS PROXY IS COUPLED WITH AN INTEREST, SHALL BE
IRREVOCABLE AND SHALL TERMINATE AT THE TERMINATION TIME. Each
Stockholder of Parent will take such further action or execute such
other instruments as may be necessary to effectuate the intent of
this proxy and hereby revokes any proxy previously granted by such
Stockholder with respect to such Stockholder’s
Shares.
4.
Representations and Warranties of
Parent . Parent represents
and warrants to each Stockholder as follows:
(a)
Organization
. Parent is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware.
(b)
Authority;
Enforceability . Parent
has the requisite corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by
Parent’s board of directors and no other corporate
proceedings on the part of Parent are necessary to authorize the
execution and delivery of this Agreement by Parent and the
consummation by it of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Parent and is a
valid and legally binding obligation of Parent, enforceable in
accordance with its terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the rights and remedies
of creditors generally, and subject to general principles of
equity, whether applied by a court of law or equity.
(c)
No Conflict
. The execution and delivery of this
Agreement by Parent do not, and the performance of this Agreement
by Parent will not, (i) conflict with or violate the certificate of
incorporation or by-laws of Parent, (ii) conflict with or violate
any law, rule, regulation or order applicable to Parent or by which
any of its properties or assets is bound, or (iii) conflict with,
result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendm
