Exhibit 3
EXECUTION COPY
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STOCKHOLDERS AGREEMENT
UNITED PAYORS & UNITED PROVIDERS, INC.
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Dated as of February 25, 1999
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NYFS08...:\60\33560\0019\2205\AGR1049P.57F
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.................................. 1
Section 1.2 Rules of Construction........................ 4
ARTICLE 2
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
Section 2.1 Board of Directors........................... 4
2.1.1 Board Representation......................... 4
2.1.2 Vacancies.................................... 5
2.1.3 Committees................................... 5
2.1.4 Modification of Rights....................... 5
2.1.5 Costs and Expenses........................... 6
Section 2.2 Voting of Capital Stock...................... 6
Section 2.3 Other Activities of the Holders;
Fiduciary Duties............................. 7
2.3.1 CapZ Group................................... 7
2.3.2 TLB.......................................... 7
2.3.3 Fiduciary Duties............................. 7
ARTICLE 3
TRANSFERS OF SECURITIES
Section 3.1 Tag Along Rights............................. 7
3.1.1 Applicability................................ 7
3.1.2 Exempt Transfers............................. 8
3.1.3 Terms of Participation Offer................. 8
Section 3.2 Right of First Offer......................... 9
3.2.1 Notice of Proposed Transaction;
Election..................................... 9
3.2.2 Exempt Transfers............................. 10
3.2.3 Procedure for Sale........................... 10
Section 3.3 Transfer and Exchange........................ 10
Section 3.4 Replacement Securities....................... 11
ARTICLE 4
LIMITATION ON TRANSFERS
Section 4.1 Notice of Proposed Transfers................. 11
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ARTICLE 5
COMPANY COVENANTS
Section 5.1 General...................................... 12
Section 5.2 Mergers, Acquisitions and
Divestitures................................. 12
Section 5.3 Share Acquisitions........................... 12
Section 5.4 OTS Approvals and Determinations............. 13
Section 5.5 Charter and Bylaws Amendments................ 13
ARTICLE 6
TERMINATION
Section 6.1 Termination.................................. 13
ARTICLE 7
MISCELLANEOUS
Section 7.1 Notices...................................... 14
Section 7.2 Governing Law................................ 15
Section 7.3 Successors and Assigns....................... 15
Section 7.4 Duplicate Originals.......................... 15
Section 7.5 Severability................................. 15
Section 7.6 No Waivers; Amendments....................... 15
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STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Stockholders Agreement"), dated as of
February 25, 1999, is entered into by and among the securityholders from time to
time listed on the signature pages hereof and, as to all provisions herein other
than Article 3, United Payors & United Providers, Inc., a Delaware corporation
(including any successors thereto, the "Company").
In consideration of the premises, mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS.
"ACCREDITED INVESTOR" means an "Accredited Investor," as defined in
Regulation D, or any successor rule then in effect.
"ACCREDITED OFFEREE" shall have the meaning
provided in Section 3.1 hereof.
"ACQUIRED ▇▇▇▇▇ OPTION SHARES" means ▇▇▇▇▇ Option Shares which have
been acquired upon exercise of the ▇▇▇▇▇ Option.
"AFFILIATE" means, with respect to any Person, any Person who,
directly or indirectly, controls, is controlled by or is under common
control with that Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.
"▇▇▇▇▇ OPTION" means the option to purchase up to 2,250,000 shares
of Common Stock granted by TLB to Capital Z Financial Services Fund II,
L.P.
"▇▇▇▇▇ OPTION SHARES" means the shares of Common Stock which may be
or have been acquired upon exercise of the ▇▇▇▇▇ Option.
"CAPZ" means Capital Z Partners, Ltd., a Bermuda exempt company.
"CAPZ GROUP" means CapZ and its Affiliates and its and their
respective officers, directors, and employees (and members of their
respective families and trusts for the primary benefit of such family
members).
"CAPZ GROUP DESIGNEE" shall have the meaning set forth in Section
2.1.1.
"COMMON STOCK" means shares of the Common Stock, $.01 par value per
share, of the Company, and any capital stock of the Company into which
such Common Stock thereafter may be changed.
"COMPANY" shall have the meaning set forth in the introductory
paragraph hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"HOLDER" means (i) a securityholder listed on the signature page
hereof and (ii) any direct or indirect transferee of any such
securityholder who shall become a party to this Stockholders Agreement.
"OFFER NOTICE" shall have the meaning provided in Section 3.1
hereof.
"OFFERED SECURITIES" shall have the meaning provided in Section 3.1
hereof.
"PARTICIPATION OFFER" shall have the meaning provided in Section 3.2
hereof.
"PERSON" or "PERSON" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or government or other agency
or political subdivision thereof.
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"REGULATION D" means Regulation D promulgated under the Securities
Act by the SEC.
"REQUIRED HOLDERS" means Holders who then own beneficially more than
66-2/3% of the aggregate number of shares of Common Stock subject to this
Stockholders Agreement.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Common Stock.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"SECURITIES PURCHASE AGREEMENT" means the Securities Purchase
Agreement, dated February 2, 1999, between TLB and Capital Z Financial
Services Fund II, L.P.
"SHARES" shall have the meaning provided in the Securities Purchase
Agreement.
"STOCKHOLDERS AGREEMENT" means this Stockholders Agreement, as may
be amended from time to time.
"SUBSIDIARY" of any Person means (i) a corporation a majority of
whose outstanding shares of capital stock or other equity interests with
voting power, under ordinary circumstances, to elect directors, is at the
time, directly or indirectly, owned by such Person, by one or more
subsidiaries of such Person or by such Person and one or more subsidiaries
of such Person, and (ii) any other Person (other than a corporation) in
which such Person, a subsidiary of such Person or such Person and one or
more subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (x) at least a majority ownership interest or
(y) the power to elect or direct the election of the directors or other
governing body of such Person.
"TAG SALE" shall have the meaning provided in Section 3.1.1 hereof.
"TLB" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
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"TRANSFER" means any disposition of any Security or any interest
therein that would constitute a "sale" thereof within the meaning of
Section 2(3) of the Securities Act.
"TRANSFER NOTICE" shall have the meaning provided in Section 4.1
hereof.
SECTION 1.2 RULES OF CONSTRUCTION. Unless the context otherwise
requires
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural and words in the plural
include the singular;
(4) provisions apply to successive events and transactions; and
(5) "herein," "hereof" and other words of similar import refer to
this Stockholders Agreement as a whole and not to any particular Article,
Section or other subdivision.
ARTICLE 2
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
SECTION 2.1 BOARD OF DIRECTORS.
2.1.1 Board Representation. Subject to Section 2.1.4, the CapZ Group
shall be entitled to designate two individuals who are reasonably acceptable to
the Company as members of the Board of Directors of the Company (the "CapZ Group
Designees"). The Company shall duly nominate the CapZ Group Designees for
election to its Board of Directors and shall include in any proxy solicitation
materials related to the election of members of the Company's Board of Directors
all such information and recommendations of the Company's Board of Directors as
may be necessary or advisable to cause the election of the CapZ Group Designees
to the Company's Board of Directors. Each Holder shall vote such Holder's shares
of Common Stock at any regular or special meeting of stockholders of the Company
or in any written consent executed in lieu of such a meeting of stockholders for
the election of the CapZ Group
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Designees. The Company and each Holder shall take all other actions necessary to
ensure that the certificate of incorporation and bylaws of the Company as in
effect immediately following the date hereof do not, at any time thereafter,
conflict in any respect with the provisions of this Agreement.
2.1.2 Vacancies. If, prior to his or her election to the Board of
Directors of the Company pursuant to Section 2.1.1 hereof, any CapZ Group
Designee shall be unable or unwilling to serve as a director of the Company, the
CapZ Group shall be entitled to nominate a replacement (who is reasonably
acceptable to the Company) who shall then be a CapZ Group Designee for purposes
of this Article 2. If, following an election to the Board of Directors of the
Company pursuant to Section 2.1.1 hereof, any CapZ Group Designee shall resign
or be removed or be unable to serve for any reason prior to the expiration of
his term as a director of the Company, the CapZ Group shall, within thirty (30)
days of such event, notify the Board of Directors of the Company in writing of a
replacement CapZ Group Designee (who must be reasonably acceptable to the
Company), and either (i) the Holders shall vote their shares of Common Stock, at
any regular or special meeting called for the purpose of filling positions on
the Board of Directors of the Company or in any written consent executed in lieu
of such a meeting of stockholders, and shall take all such other actions
necessary to ensure the election to the Board of Directors of the Company of
such replacement CapZ Group Designee to fill the unexpired term of the CapZ
Group Designee who such new CapZ Group Designee is replacing or (ii) the Board
of Directors shall elect such replacement CapZ Group Designee to fill the
unexpired term of the CapZ Group Designee who such new Designee is replacing.
2.1.3 Committees. The Company and the Holders shall cause each
committee of the Board of Directors of the Company to include as a member at
least one of the CapZ Group Designees, except where such inclusion would give
rise to a conflict of interest.
2.1.4 Modification of Rights. For every four board seats added to
the nine board seats comprising the Company's Board of Directors on the date
hereof, the CapZ Group shall be entitled to designate one additional CapZ Group
Designee to the Company's Board of Directors. If at any time members of the CapZ
Group shall own beneficially less than 900,000 of the Shares (adjusted for any
stock
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splits, stock dividends or similar events) in the aggregate, the Cap Z Group
thereafter shall be entitled to designate only one CapZ Group Designee. If at
any time members of the CapZ Group shall own beneficially less than 100,000 of
the Shares (adjusted for any stock splits, stock dividends or similar events) in
the aggregate, the Cap Z Group thereafter shall not be entitled to designate a
CapZ Group Designee.
2.1.5 Costs and Expenses. The Company shall reimburse each CapZ
Group Designee for out-of-pocket expenses incurred by such CapZ Group Designee
in connection with such CapZ Group Designee's participation in meetings of the
Board of Directors of the Company (and committees thereof) and, if applicable,
the Boards of Directors of the Subsidiaries of the Company (and committees
thereof) at least to the same extent that the Company reimburses the independent
members of its Board of Directors.
SECTION 2.2 VOTING OF CAPITAL STOCK. To the extent any Holder owns shares
of any class or series of capital stock of the Company which such Holder may
vote on any particular matter which comes before the Company's stockholders as a
class or series separate from the Common Stock, such Holder shall vote all such
shares on such matter in such separate class or series vote as holders of a
majority of the outstanding shares of Common Stock vote thereon; provided,
however, that such Holder may nevertheless vote such shares as a separate class
or series without regard to the provisions of this Section 2.2 in respect of (a)
amendments to the certificate of incorporation of the Company, or the
certificate of designation which created such class or series, which change the
provisions thereof expressly applicable to such separate class or series, and
(b) any matter as to which such class or series is expressly entitled to vote as
a separate class or series pursuant to the Company's certificate of
incorporation or the certificate of designation which created such class or
series; provided further, however, that no statement in such certificate of
incorporation or certificate of designation that such class or series may vote
as a separate class or series "as required by law" or any similar language shall
permit such class or series to be voted without regard to the provisions of this
Section 2.2.
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SECTION 2.3 OTHER ACTIVITIES OF THE HOLDERS; FIDUCIARY DUTIES.
2.3.1 CapZ Group. It is understood and accepted that the members of
the CapZ Group have interests in other business ventures which may be in
conflict with the activities of the Company and its Subsidiaries and that,
subject to applicable law, nothing in this Stockholders Agreement shall limit
the current or future business activities of any member of the CapZ Group
whether or not such activities are competitive with those of the Company and its
Subsidiaries.
2.3.2 TLB. TLB agrees that any business opportunity in the
healthcare industry (or any industry reasonably related thereto) that is
presented to or otherwise becomes known or available to him shall be directed by
him to the Company. If the Company declines to pursue such business opportunity,
TLB shall give CapZ an opportunity to participate in such business opportunity
(either directly or indirectly through an Affiliate, at CapZ's discretion) on
terms acceptable to CapZ.
2.3.3 Fiduciary Duties. Nothing in this Agreement, express or
implied, shall relieve any officer or director of the Company or any of its
Subsidiaries, or any Holder, of any fiduciary or other duties or obligations
they may have to the Company or its stockholders.
ARTICLE 3
TRANSFERS OF SECURITIES
SECTION 3.1 TAG ALONG RIGHTS.
3.1.1 Applicability. Subject to Section 3.1.2, in the event that TLB
desires to effect a Transfer of shares of Common Stock (a "Tag Sale"), either
directly or indirectly pursuant to an assignment of TLB's right to purchase
Trust Shares (as defined in the Securities Purchase Agreement), TLB shall make
an offer (a "Participation Offer") to the CapZ Group to include in the proposed
Tag Sale (i) any all Shares which have not been transferred or otherwise
disposed of by the CapZ Group, up to that number of Shares which is equal to the
number of shares of Common Stock that TLB desires to sell pursuant to the Tag
Sale and (ii) after all Shares have been transferred or otherwise disposed of by
the CapZ Group, up to that number of Acquired
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▇▇▇▇▇ Option Shares which is equal to (A) one-half multiplied by (B) difference
between the number of shares of Common Stock that TLB desires to sell pursuant
to the Tag Sale and the number of Shares, if any, to be included in the Tag Sale
pursuant to clause (i). For purposes of this Section 3.1, the number "Shares"
and "▇▇▇▇▇ Option Shares" shall be deemed to have been adjusted to give effect
to any stock splits, stock dividends, and similar events.
3.1.2 Exempt Transfers. Notwithstanding Section 3.1.1, TLB shall be
entitled to Transfer free of any tag-along rights up to (i) 12,500 shares of
Common Stock per fiscal quarter to any person and (ii) 1,000,000 shares of
Common Stock in the aggregate to executive officers of the Company, including in
either case indirect Transfers to other executive officers of the Company
pursuant to an assignment of TLB's right to purchase Trust Shares (such sales
being referred to herein as "Exempt Transfers").
3.1.3 Terms of Participation Offer. The Participation Offer shall
describe the terms and conditions of the proposed Tag Sale and shall be
conditioned upon (i) the consummation of the transactions contemplated in the
Participation Offer with the transferee named therein, and (ii) the execution
and delivery by each participating member of the CapZ Group of all agreements
and other documents as TLB is required to execute and deliver in connection with
such Tag Sale (provided that no member of the CapZ Group shall be required to
make any representations or warranties in connection with such Tag Sale other
than representations and warranties as to (A) such member's ownership of such
member's shares of Common Stock to be sold or transferred free and clear of all
liens, claims, and encumbrances, (B) such member's power and authority to effect
such transfer and (C) such matters pertaining to compliance with securities laws
as the transferee may reasonably require). If any member of the CapZ Group shall
accept the Participation Offer, TLB shall reduce, to the extent necessary, the
number of shares of Common Stock that TLB otherwise would have sold in the
proposed Tag Sale so as to permit those members of the CapZ Group who have
accepted the Participation Offer to sell the number of shares of Common Stock
that they are entitled to sell pursuant to this Section 3.1, and TLB and such
members of the CapZ Group shall transfer the number of shares of Common Stock
specified in the Participation Offer to the proposed transferee in accordance
with the terms and conditions of such Tag Sale as set forth in the Participation
Offer. CapZ
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shall be empowered to allocate the tag-along rights under Section 3.1.1 among
the members of the CapZ Group as CapZ determines in its sole discretion.
SECTION 3.2 RIGHT OF FIRST OFFER.
3.2.1 Notice of Proposed Transaction; Election. Subject to Section
3.2.2, in the event that TLB desires to effect a Transfer of any or all of his
shares of Common Stock, either directly or indirectly pursuant to an assignment
of TLB's right to purchase Trust Shares (collectively, the "Subject Shares"), he
shall first give written notice (a "Right of First Offer Notice") of such desire
to the CapZ Group setting forth the terms and conditions of sale and the price
at which TLB desires to sell. The CapZ Group shall thereupon, within ten (10)
business days following its receipt of the Right of First Offer Notice (the
"Right of First Offer Election Period"), notify TLB in writing of the number, if
any, of Subject Shares that the CapZ Group desires to subscribe to purchase (the
"Right of First Offer Subscription"). Subject to the immediately following
sentence, the number of shares of Common Stock for which the CapZ Group may
subscribe to purchase shall not exceed (i) the number of Shares less (ii) the
aggregate number of shares of Common Stock previously (A) purchased by members
of the CapZ Group pursuant to this Section 3.2 or (B) Transferred to Persons who
are not members of the CapZ Group. In addition, to the extent that the CapZ
Group no longer has or would have any right of first offer pursuant to the
preceding provisions of this Section 3.2.1, and to the extent that TLB proposes
to sell Subject Shares at a price less than 90% of the Market Price, the CapZ
Group shall be entitled to subscribe to purchase an additional number of Subject
Shares not to exceed (i) the number of Acquired ▇▇▇▇▇ Option Shares less (ii)
the aggregate of (A) the number of ▇▇▇▇▇ Option Shares Transferred to Persons
other than members of the CapZ Group and (B) the number of Subject Shares
previously purchased by the CapZ Group pursuant to this sentence. For purposes
hereof, "Market Price" shall mean the average of the daily averages of the last
quoted bid and offer price per share of Common on the Nasdaq Stock Market for
each of the ten Nasdaq Stock Market trading days immediately preceding the date
on which the relevant Right of First Offer Notice was sent to the CapZ Group.
Failure to respond to TLB with regard to the Right of First Offer Notice prior
to the expiration of the Right of First Offer Election Period shall be deemed to
be an election not to subscribe for any of the Subject
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Shares. If TLB satisfies all of the foregoing conditions and the CapZ Group does
not subscribe for all of the Subject Shares, then TLB may, upon the expiration
of the Right of First Offer Election Period, sell the Subject Shares not
subscribed for by the CapZ Group to any other person at a purchase price equal
to or higher than the price set forth in the Right of First Offer Notice;
provided, however, that TLB shall again become subject to the above restrictions
on transfer if a definitive agreement for the proposed Transfer is not entered
into within ninety (90) days after the expiration of Right of First Offer
Election Period. CapZ shall be empowered to allocate the rights of first offer
under this Section 3.2.1 among the members of the CapZ Group as it determines in
its sole discretion.
3.2.2 Exempt Transfers. The CapZ Group's rights of first offer under
Section 3.2.1 shall not apply to Exempt Transfers.
3.2.3 Procedure for Sale. If all of the Subject Shares are
subscribed for by members of the CapZ Group, the closing of the purchase of the
Subject Shares shall take place at the principal offices of the Company no later
than thirty (30) days after the date of the expiration of the Right of First
Offer Election Period (subject to the last sentence of this Section). At the
closing, the CapZ Group will pay the purchase price for the Subject Shares to
TLB by wire transfer of immediately available funds upon TLB's delivery of valid
certificates evidencing the Subject Shares. Such certificates will be duly
endorsed (with signatures guaranteed, if appropriate) for transfer to applicable
members of the CapZ Group, and upon delivery of such certificates to such
members of the CapZ Group, TLB will be deemed to represent and warrant to each
such member of the CapZ Group that the Subject Shares are owned and being
transferred by TLB free and clear of all liens, adverse claims and other
encumbrances (other than as provided in this Stockholders Agreement), and that
TLB has all requisite power and authority to sell the Subject Shares. The
parties shall take all such actions as may be necessary to comply as promptly as
practicable with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, in connection with the sale of the Subject Shares.
SECTION 3.3 TRANSFER AND EXCHANGE. When Securities are presented to the
Company with a request to register the transfer of such Securities or to
exchange such Securities for Securities of other authorized denominations, the
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Company shall register the transfer or make the exchange as requested if the
requirements of this Stockholders Agreement for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company, duly executed by the Holder thereof or its
attorney and duly authorized in writing. No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.
SECTION 3.4 REPLACEMENT SECURITIES. If a mutilated Security is surrendered
to the Company or if the Holder of a Security claims and submits an affidavit or
other evidence, satisfactory to the Company, to the effect that the Security has
been lost, destroyed or wrongfully taken, the Company shall issue a replacement
Security if the Company's requirements are met. If required by the Company, such
Holder must provide an indemnity bond, or other form of indemnity, sufficient in
the judgment of the Company to protect the Company against any loss which may be
suffered. The Company may charge such Holder for its reasonable out-of-pocket
expenses in replacing a Security which has been mutilated, lost, destroyed, or
wrongfully taken.
ARTICLE 4
LIMITATION ON TRANSFERS
SECTION 4.1 NOTICE OF PROPOSED TRANSFERS. Prior to any Transfer or
attempted Transfer of any Security, the Holder of such Security shall (i) give
twenty (20) days' prior written notice (a "Transfer Notice") to the Company and
each other Holder of such Holder's intention to effect such Transfer, describing
the manner, circumstances and material terms of the proposed Transfer, (ii)
certify to the Company and each other Holder that such Holder has complied with
its obligations under Article 3 and (iii) provide to the Company an opinion
reasonably satisfactory to the Company from counsel who shall be reasonably
satisfactory to the Company (or supply such other evidence reasonably
satisfactory to the Company) that the proposed Transfer of such Security may be
effected without registration under the Securities Act. After receipt of the
Transfer Notice and opinion (if required), the Company shall within three (3)
days notify each other Holder of its receipt of the Transfer
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Notice (which notice shall be accompanied by a copy of the Transfer Notice).
Within ten (10) days after the Company's delivery of such notice, the Company
shall notify the Holder of such Security and such Holder shall thereupon be
entitled to Transfer such Security in accordance with the terms of the Transfer
Notice; provided, however, that no Transfer shall be effected unless such Holder
has in fact complied with such Holder's obligations under Article 3.
ARTICLE 5
COMPANY COVENANTS
SECTION 5.1 GENERAL. The Company shall not enter into any transaction,
including, without limitation, any purchase, sale, exchange or other transfer of
property or any provision or receipt of services, with any Affiliate of the
Company other than upon terms (i) no less favorable to the Company than could be
obtained by the Company in a comparable arm's length transaction with a Person
that is not an Affiliate of the Company or (ii) approved by the Company's
independent directors and the CapZ Group Designees.
SECTION 5.2 MERGERS, ACQUISITIONS AND DIVESTITURES. In addition to, and
not in limitation of, the requirements of Section 5.1, the Company shall not
merge with, acquire stock or assets from, sell stock or assets to, or engage in
any similar business combination transaction with, an Affiliate of the Company
if the value of such transaction exceeds ten million dollars ($10,000,000)
unless the Company first shall have obtained an opinion from a
nationally-recognized investment bank to the effect that such transaction is
fair to the Company or its stockholders, as the case may be, from a financial
point of view.
SECTION 5.3 SHARE ACQUISITIONS. At any time the Company is a "savings and
loan holding company" (as defined in 12 C.F.R. ss.574.2(q)), the Company shall
not redeem, purchase or otherwise acquire or agree to redeem, purchase or
otherwise acquire any shares of its capital stock or any option, warrant or
other similar right to acquire, or any security convertible into or exchangeable
or exercisable for, any shares of its capital stock, if such redemption,
purchase or other acquisition would cause the Shares and any Acquired ▇▇▇▇▇
Option Shares to constitute 10% or more of
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the outstanding shares of voting capital stock of the Company.
SECTION 5.4 OTS APPROVALS AND DETERMINATIONS. The Company shall reasonably
cooperate with the CapZ Group from time to time in obtaining any necessary
approvals, determinations or other authorizations from the United States Office
of Thrift Supervision in connection with the CapZ Group's acquisition,
ownership, or disposition of the Shares and the ▇▇▇▇▇ Option Shares.
SECTION 5.5 CHARTER AND BYLAWS AMENDMENTS. The Company shall use its best
efforts to (i) delete from its certificate of incorporation Article Fifth,
Section C (which prohibits stockholder action by written consent), Article
Eighth (which imposes restrictions on transactions with "interested
stockholders") and Article Ninth (which allows the Company's Board of Directors
to consider non-stockholder constituencies in evaluating certain business
transactions) and (ii) amend Article 6, Section D (which specifies the
conditions for removal of directors), Article Seventh (which specifies the
methods for amending the Company's bylaws), and Article Twelfth (which specifies
the methods for amending the company's certificate of incorporation) to require
in each case a 66-2/3% stockholder vote rather than the 80% stockholder vote
presently specified therein. Without limiting the foregoing, the Company's Board
of Directors shall approve such amendments, submit such amendments to a vote of
the Company's stockholders at the Company's next annual meeting and cause the
Company to solicit proxies to vote the requisite number shares of Common Stock
in favor of such amendments at the Company's next annual meeting. In addition,
the Company's Board of Directors shall approve such corresponding amendments to
the Company's bylaws as may be necessary to eliminate any conflicts between the
Company's bylaws, on the one hand, and the Company's certificate of
incorporation, as amended in accordance herewith, on the other hand.
ARTICLE 6
TERMINATION
SECTION 6.1 TERMINATION. The provisions of this Agreement shall terminate
on the seventh anniversary of the date of this Agreement or, if later, the
second anniversary of the date on which TLB notifies the Company and each
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Holder in writing of his intention to terminate this Stockholders Agreement.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 NOTICES. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by telecopier or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows (or at such
other address as may be substituted by notice given as herein provided):
If to the Company:
United Payors & United Providers, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With copies to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to any Holder, at its address listed on the signature pages hereof.
Any notice or communication hereunder shall be deemed to have been given
or made as of the date so delivered if personally delivered; when answered back,
if telexed; when receipt is acknowledged, if telecopied; and five (5) calendar
days after mailing if sent by registered or certified mail (except that a notice
of change of address shall not be deemed to have been given until actually
received by the addressee).
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
14
SECTION 7.2 GOVERNING LAW. THIS STOCKHOLDERS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 7.3 SUCCESSORS AND ASSIGNS. Whether or not an express assignment
has been made pursuant to the provisions of this Stockholders Agreement,
provisions of this Stockholders Agreement that are for the Holders' benefit as
the holders of any Securities are also for the benefit of, and enforceable by,
all subsequent holders of Securities, except as otherwise expressly provided
herein. This Stockholders Agreement shall be binding upon the Company, each
Holder, and their respective successors and assigns. Notwithstanding the
foregoing, the rights and obligations of members of the CapZ Group under Article
3 may not be assigned to any Person who is not a member of the CapZ Group.
SECTION 7.4 DUPLICATE ORIGINALS. All parties may sign any number of copies
of this Stockholders Agreement. Each signed copy shall be an original, but all
of them together shall represent the same agreement.
SECTION 7.5 SEVERABILITY. In case any provision in this Stockholders
Agreement shall be held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and the remaining provisions shall not in any way be affected or
impaired thereby
SECTION 7.6 NO WAIVERS; AMENDMENTS.
7.6.1 No failure or delay on the part of the Company or any Holder
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
any Holder at law or in equity or otherwise.
7.6.2 Any provision of this Stockholders Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
the Company and the Required Holders; provided, however, that no such amendment
or waiver shall, (i) unless signed by all of
15
the Holders, amend the provisions of Section 2.1, (ii) unless signed by all of
the Holders affected, (A) amend the provisions of this Section 7.6.2 or (B)
change the number of Holders which shall be required for the Holders or any of
them to take any action under this Section 7.6.2 or any other provision of this
Stockholders Agreement, and (iii) unless signed by a majority of the Holders who
are members of the CapZ Group, amend Section 3.1, Section 3.2, Article 4, or
Article 5, or grant a waiver thereunder, so as to (A) impose additional
obligations on members of the CapZ Group that are not imposed on other Holders
or (B) adversely affect the rights granted to the members of CapZ Group where
such amendment or waiver does not apply to the same extent to the rights granted
to other Holders.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the parties hereto have caused this Stockholders
Agreement to be duly executed as of the date first written above.
NAME OF HOLDER:
CAPITAL Z FINANCIAL SERVICES
FUND II, L.P.
By: Capital Z Partners, L.P.,
its General Partner
By: Capital Z Partners, Ltd.,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board
Address:
c/o Capital Z Partners, Ltd.
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT
NAME OF HOLDER:
CAPITAL Z FINANCIAL SERVICES
PRIVATE FUND II, L.P.
By: Capital Z Partners, L.P.,
its General Partner
By: Capital Z Partners, Ltd.,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chiarman of the Board
Address:
c/o Capital Z Partners, Ltd.
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT
NAME OF HOLDER:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Address:
United Payors & United
Providers, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT
THE COMPANY:
UNITED PAYORS & UNITED PROVIDERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Operating Officer
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT