<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. __)*
PARACELSUS HEALTHCARE CORPORATION
(Name of Issuer)
Common Stock, No Stated Value
(Title of Class of Securities)
15850B
(CUSIP Number)
Dr. Heiner Meyer zu Losebeck
Park-Hospital GmbH
Am Natruper Holz 69
D-49076 Osnabruck
Federal Republic of Germany
011-49-541-966 4007
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 7, 1997 (date of perfection of assignment to PKD) and August
30, 1997 (final date of acceptance of co-executors' appointment)
(Date of Event Which Requires
Filing of this Statement)
Copy to:
Wilfried E. Witthuhn
King & Spalding
1185 Avenue of the Americas
New York, New York 10036
(212) 556-2100
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box: [ ].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on Following Pages)
(Page 1 of 47 Pages)
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 15850 B
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
PARK-HOSPITAL GmbH
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
NOT APPLICABLE
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
FEDERAL REPUBLIC OF GERMANY
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER
EACH 29,771,742
REPORTING
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0
10. SHARED DISPOSITIVE POWER
29,771,742
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,771,742
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.04%
14. TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 2 of 47 Pages)
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 15850 B
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
PARACELSUS-KLINIKEN-DEUTSCHLAND GmbH
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
NOT APPLICABLE
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
FEDERAL REPUBLIC OF GERMANY
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER
EACH 29,771,742
REPORTING
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0
10. SHARED DISPOSITIVE POWER
29,771,742
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,771,742
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.04%
14. TYPE OF REPORTING PERSON*
HC
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 3 of 47 Pages)
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 15850 B
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
DR. HEINER MEYER ZU LOSEBECK
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
NOT APPLICABLE
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
FEDERAL REPUBLIC OF GERMANY
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER
EACH 29,771,742
REPORTING
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0
10. SHARED DISPOSITIVE POWER
29,771,742
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,771,742
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.04%
14. TYPE OF REPORTING PERSON*
00
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 4 of 47 Pages)
<PAGE> 5
SCHEDULE 13D
CUSIP NO. 15850 B
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
MR. PETER FROMMHOLD
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
NOT APPLICABLE
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
FEDERAL REPUBLIC OF GERMANY
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8. SHARED VOTING POWER
EACH 29,771,742
REPORTING
PERSON 9. SOLE DISPOSITIVE POWER
WITH 0
10. SHARED DISPOSITIVE POWER
29,771,742
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,771,742
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.04%
14. TYPE OF REPORTING PERSON*
00
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 5 of 47 Pages)
<PAGE> 6
STATEMENT PURSUANT TO RULE 13d-1
OF THE GENERAL RULES AND REGULATIONS UNDER THE
SECURITIES EXCHANGE ACT OF 1934
Item 1. Security and Issuer
The class of equity securities to which this Statement on Schedule 13D
relates is the Common Stock, no par value ("Paracelsus Common Stock"), of
Paracelsus Healthcare Corporation ("Paracelsus"), a California corporation.
Paracelsus's principal executive offices are located at 515 W.
Greens Road, Suite 800, Houston, Texas 77067.
Item 2. Identity and Background
Park-Hospital GmbH
(a)-(c) This Schedule 13D Statement is filed by, among others,
Park-Hospital GmbH, a German limited liability company ("Park"), pursuant to
Rule 13d-1 of Regulation D-G of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Act"). Park is a holding
company with respect to 29,771,744 shares of common stock of Paracelsus and
operates a small hospital in Germany. Its principal offices are located at Am
Natruper Holz 69, D-49076 Osnabruck, Federal Republic of Germany.
Park is a wholly owned subsidiary of Paracelsus-Kliniken-Deutschland GmbH,
a German limited liability company. The name, residence or business address, and
present principal occupation or employment of the managing directors are set
forth in Annex A to this Schedule 13D Statement and are specifically
incorporated herein by reference.
(d)-(e) During the last five years, Park has not, and, to the best of
Park's knowledge, none of the managing directors of Park has (i) been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors)
or (ii) been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction, as a result of which such person was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities
laws or finding any violation with respect to such laws.
(f) Each managing director of Park is a citizen of the Federal Republic of
Germany.
Paracelsus-Kliniken-Deutschland GmbH
(a) - (c) This Schedule 13D Statement is filed by, among others,
Paracelsus-Kliniken-Deutschland GmbH, a German limited liability company ("PKD")
pursuant to Rule 13d-1 of Regulation D-G of the General Rules and Regulations
under the Act. PKD owns and operates over twenty-five hospitals and
rehabilitation centers in Germany, England and Switzerland, and holds share
interests in several affiliates of PKD. The principal offices of PKD are located
at Am Natruper Holz 69, D-49076 Osnabruck, Federal Republic of Germany.
(Page 6 of 47 Pages)
<PAGE> 7
The name, residence or business address, and present principal occupation
or employment of the managing directors are set forth in Annex B to this
Schedule 13D Statement and are specifically incorporated herein by reference.
(d) - (e) Since its formation on November 7, 1997, PKD has not, and
during the last five years, to the best of PKD's knowledge, none of the
managing directors of PKD has (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction, as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) Each managing director of PKD is a citizen of the Federal Republic of
Germany.
Dr. Heiner Meyer zu Losebeck
(a) - (c) This Schedule 13D Statement is filed by, among others, Dr.
Heiner Meyer zu Losebeck pursuant to Rule 13d-1 of Regulation D-G of the General
Rules and Regulations under the Act. Dr. Meyer zu Losebeck's business address is
Am Natruper Holz 69, D-49076 Osnabruck, Federal Republic of Germany. Dr. Meyer
zu Losebeck serves as a Managing Director of Park, PKD and their affiliates. The
principal offices of Park are located at Am Natruper Holz 69, D-49076 Osnabruck,
Federal Republic of Germany. Dr. Meyer zu Losebeck also serves as co-executor
under the estate of Professor Dr. Hartmut Krukemeyer (see Item 4 below).
(d) - (e) During the last five years, Dr. Meyer zu Losebeck has not (i)
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, as a result of which Dr. Meyer zu
Losebeck was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
State securities laws or finding any violation with respect to such laws.
(f) Dr. Meyer zu Losebeck is a citizen of the Federal Republic of Germany.
Mr. Peter Frommhold
(a) - (c) This Schedule 13D Statement is filed by, among others, Mr. Peter
Frommhold pursuant to Rule 13d-1 of Regulation D-G of the General Rules and
Regulations under the Act. Mr. Frommhold's business address is at Drubbel 17/18,
D-48143 Munster, Federal Republic of Germany. Mr. Frommhold is an attorney in
private practice. Mr. Frommhold also serves as co-executor under the estate of
Professor Dr. Hartmut Krukemeyer (see Item 4 below).
(d) - (e) During the last five years, Mr. Frommhold has not (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of which Mr.
Frommhold was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or State securities laws or finding any violation with respect to such laws.
(Page 7 of 47 Pages)
<PAGE> 8
(f) Mr. Frommhold is a citizen of the Federal Republic of Germany.
Item 3. Source and Amount of Funds or Other Consideration.
Professor Dr. Hartmut Krukemeyer ("Professor Krukemeyer") built a chain of
hospitals under the "Paracelsus" name in Europe. Professor Krukemeyer was the
sole owner of Park until his death on May 21, 1994. Upon Professor Krukemeyer's
death, his son and heir Dr. Manfred Georg Krukemeyer ("Dr. Krukemeyer")
succeeded his father as sole owner of Park pursuant to the Last Wills and
Testaments of Professor Krukemeyer (the "Wills"). In accordance with the terms
of the Wills, Dr. Krukemeyer acquired a 100% ownership interest in Park and in
the capital stock of Paracelsus. Effective as of December 31, 1995, Park
acquired 100% of the capital stock of Paracelsus from Dr. Krukemeyer.
Pursuant to an Amended and Restated Agreement and Plan of Merger dated as
of May 29, 1996, by and among the Issuer, Champion Healthcare Corporation and PC
Merger Sub. Inc. (the "Merger"), Park became the beneficial owner of 29,771,742
shares of the common stock of Paracelsus (the "Paracelsus Shares").
On August 25, 1997, Dr. Meyer zu Losebeck and Mr. Frommhold (each a
"Co-executor," and together, the "Co-executors") were appointed Co-executors
pursuant to the Wills. The appointment was accepted on August 29 and August 30,
1997, respectively, and became uncontested at the end of September 1997, when
appeals filed against the appointment were withdrawn. The Co-executors currently
share indirect voting power and investment power over the Paracelsus Shares held
by Park with the managing directors of PKD and Park.
On August 30, 1997, the holdings of Professor Krukemeyer's estate were
reorganized and its entire interest in Park (as well as all the other business
operations that he inherited from the estate of Professor Krukemeyer pursuant
to the Wills) was assigned to PKD. Subject to the deletion of the trade
register entries reflecting Dr. Krukemeyer's holdings prior to the
reorganization, the reorganization was completed on November 7, 1997, when PKD
was entered into the local trade register. As a result of the reorganization,
Dr. Krukemeyer has a 99.93% ownership interest in PKD, subject to the powers of
the Co-executors; the remainder is held by a wholly owned subsidiary of PKD.
As a result of the formation of PKD and the qualification under local law
of the Co-executors, PKD and the Co-executors are beneficial owners of the
Paracelsus Shares together with Park.
Item 4. Purpose of Transaction.
See Item 3. Except for the rights of Park pursuant to the Shareholder
Agreement (see Item 6), Park's intent to fill at least one vacancy on the Board
of Directors of Paracelsus and the ongoing review by the Co-executors of Park's
investment in the Paracelsus Shares, none of the reporting persons has any plan
or proposal which relates to or would result in: (a) the acquisition by any
person of additional securities of Paracelsus, or the disposition of securities
of Paracelsus: (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving Paracelsus or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of Paracelsus or of any of
its subsidiaries; (d) any change in the present board of directors or management
of Paracelsus; including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the
(Page 8 of 47 Pages)
<PAGE> 9
board; (e) any material change in the present capitalization or dividend policy
of Paracelsus; (f) any other material change in Paracelsus' business or
corporate structure; (g) changes in Paracelsus' charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of Paracelsus by any person; (h) causing a class of securities of
Paracelsus to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (i) a class of equity securities of Paracelsus
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Act; or (j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
Each person filing this Statement has a beneficial ownership interest in
the Paracelsus Shares, which is 29,771,742 shares, or 54.04% of the outstanding
shares, of Paracelsus Common Stock. Park is the record owner of such shares.
Park is 100% owned directly by PKD and indirectly owned by Dr. Krukemeyer.
However, Dr. Krukemeyer no longer has voting or dispositive power with respect
to the Paracelsus Shares. The Co-executors, acting jointly, have sole voting
power with respect to shares of PKD. The Co-executors, PKD, and Park share
voting and dispositive power with respect to the Paracelsus Shares. Information
from Item 3 is incorporated herein by reference.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
In connection with the Merger, Paracelsus and Park entered into a
Shareholder Agreement, dated as of August 16, 1996 (the "Shareholder
Agreement"), the principal terms of which are summarized below.
Composition of the Paracelsus Board. Pursuant to the Shareholder
Agreement, the Board of Directors of Paracelsus (the "Paracelsus Board"),
consists of nine members (subject to increase under certain circumstances) and
is divided into three classes with the number of directors divided as equally as
possible among the three classes. Park has the right to nominate up to four
directors (the "Shareholder Directors"), one of whom is a member of Class I, one
of whom is a member of the Class II and two of whom are members of Class III.
Limitation on Acquisitions of Paracelsus Voting Securities. Except as
described in the following paragraph, the Shareholder Agreement prohibits Park,
or any permitted transferee of Park (collectively, the "Investor"), together
with their Affiliates and Associates (as defined in Rule 12(b)-2 of the Act),
from beneficially owning 66 2/3% or more of the total voting power of
Paracelsus.
Acquisitions in a Fair Proposal. The Shareholder Agreement allows the
Investor, together with its Affiliates and Associates, to beneficially own up to
66 2/3% or more of the total voting power of Paracelsus pursuant to a Fair
Proposal. A "Fair Proposal" is defined as (i) an Acquisition Proposal (as
hereinafter defined) by the Investor (or such Investor's Affiliates or
Associates) that is approved by the unanimous vote of the independent directors
of Paracelsus or (ii) a transaction to acquire all of the outstanding shares
that complies with all of the procedures described below. An "Acquisition
Proposal" is defined as any bona fide offer or proposal for (k) a merger or
other business combination (other than a Surviving Company Merger) involving
Paracelsus, (l) the acquisition of any voting securities of Paracelsus
representing more than 50% of the total voting power after giving effect to such
(Page 9 of 47 Pages)
<PAGE> 10
Acquisition Proposal or (m) the acquisition of all or substantially all of the
assets of Paracelsus. As used herein, a "Surviving Company Merger" means any
merger or other business combination or reorganization (x) where the holders of
voting securities of Paracelsus prior to such transaction will beneficially own
(as determined pursuant to Rule 13d-3 or Rule 13d-5 of the Act) in the aggregate
at least 60% of the surviving corporation's total voting power immediately upon
giving effect to such transaction.
Standstill Limitations. Under the Shareholder Agreement, the Investor is
subject to customary standstill provisions, whether acting alone or in concert
with others, except as otherwise permitted by the Shareholder Agreement,
including, without limitation, restrictions on: (a) soliciting proxies; (b)
becoming a participant in any election contest; (c) proposing a director
nominees proposal with respect to Paracelsus; and (d) seeking election to or to
place a representative on the Paracelsus Board or remove any member of the
Paracelsus Board; and certain other restrictions as more fully set forth in the
Shareholder Agreement.
Limitations on Transfers of Voting Securities. The Shareholder Agreement
contains certain customary transfer restrictions that prohibit the Investor from
consummating any direct or indirect sale, transfer, assignment, pledge,
hypothecation, mortgage or other disposition, including those by operation or
succession of law, merger or otherwise, or any encumbrance (other than
encumbrances arising by operation of law) (a "Transfer"), or permitting any
Affiliates or Associates to Transfer, in any single transaction or group of
related transactions, any voting securities of Paracelsus, except for certain
Transfers, as set forth in the Shareholder Agreement.
Right of First Offer. The Shareholder Agreement provides that Paracelsus
will not enter into or recommend any Acquisition Proposal that has been
unanimously approved by the independent directors (an "Approved Acquisition
Proposal") without first notifying Park in writing (a "Proposal Notice") and
providing Park (including its Affiliates) the opportunity to consummate an
Acquisition Proposal on terms substantially equivalent to and, if the Approved
Acquisition Proposal is a cash offer, at a cash price or, if the Approved
Acquisition Proposal includes non-cash consideration, at a price (in either
case, the "Offer Price") equal to the sum of the amount of any cash plus the
fair market value of any other consideration offered in such prospective
Approved Acquisition Proposal, as the same may be amended or modified form time
to time (a "Shareholder Proposal").
Agreement to Sell Voting Securities. Subject to the rights of Park to
propose, negotiate and consummate a Shareholder Proposal in accordance with the
provisions of the Shareholder Agreement, Park has agreed that it will, and will
cause any Affiliates or Associates of Park to, sell in, tender into and vote in
favor of, as the case may be, any Approved Acquisition Proposal and any
Shareholder Proposal approved by the Independent Directors in accordance with
the provisions of the Shareholder Agreement all voting securities of Paracelsus
beneficially owned by Park or any Affiliate or Associate of Park.
The Shareholder Agreement provides that the foregoing obligation to vote
and sell voting securities of Paracelsus will not be binding upon any permitted
transferees of Park so long as, if Park continues to be subject to the
Shareholder Agreement, such permitted transferee is not an Affiliate or
Associate of Park.
(Page 10 of 47 Pages)
<PAGE> 11
Termination. With respect to a particular Investor (but not with respect
to any other person who may at such time be bound by the terms of the
Shareholder Agreement), the Shareholder Agreement shall terminate automatically
without any action by any party upon the earliest to occur of (i) the Investor,
together with all of its Affiliates and Associates, ceasing to beneficially own
at least 25% of the total voting power of Paracelsus and (ii) the Investor,
together with all of its Affiliates and Associates, beneficially owning at least
90% of the total voting power of Paracelsus.
Voting on Certain Matters. The Shareholder Agreement provides that unless
such action is recommended by the Paracelsus Board, the Investor will not, and
will cause its Affiliates and Associates not to, vote any voting securities of
Paracelsus, to amend or repeal the Articles or the Bylaws or to call or request
any special meeting of Paracelsus' shareholders.
Item 7. Material to be filed as Exhibits.
The following Exhibits are filed as part of this Schedule 13D Statement:
DESCRIPTION
Exhibit A -- An English translation of the Certificate of Executorship
evidencing the appointment of Dr. Heiner Meyer zu Losebeck and
Peter Frommhold as co-executors of the estate of Professor Dr.
Hartmut Krukemeyer
Exhibit B -- An English translation of the Assignment Agreement dated
August 30, 1997 between Dr. Manfred Georg Krukemeyer and
Paracelsus-Kliniken-Deutschland GmbH
Exhibit C -- Shareholder Agreement dated as of August 16, 1996 between Park
Hospital GmbH and Paracelsus Healthcare Corporation
Exhibit D -- Agreement as to Joint Filing of Schedule 13D
(Page 11 of 47 Pages)
<PAGE> 12
SIGNATURES
After reasonable inquiry and to each signatory's best knowledge and
belief, each of the undersigned hereby certifies that the information set forth
in this statement is true, complete and correct.
PARK-HOSPITAL GmbH
By: /s/ Armin Sulberg
--------------------------------
Armin Sulberg
PARACELSUS-KLINIKEN-DEUTSCHLAND GmbH
By: /s/ Armin Sulberg
--------------------------------
Armin Sulberg
/s/ Dr. Heiner Meyer zu Losebeck
-------------------------------------------
Dr. Heiner Meyer zu Losebeck
/s/ Peter Frommhold
-------------------------------------------
Peter Frommhold
Dated: December 15, 1997
(Page 12 of 47 Pages)
<PAGE> 13
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION PAGE
A An English translation of the Certificate of Executorship 16
evidencing the appointment of Dr. Heiner Meyer zu Losebeck
and Peter Frommhold as co-executors of the estate of Dr.
Hartmut Krukemeyer
B An English translation of the Assignment Agreement dated 17
August 30, 1997 between Dr. Manfred Georg Krukemeyer and
Paracelsus-Kliniken-Deutschland GmbH
C Shareholder Agreement dated as of August 16, 1996 between 26
Park Hospital GmbH and Paracelsus Healthcare Corporation
D Agreement as to Joint Filing of Schedule 13D 47
(Page 13 of 47 Pages)
<PAGE> 14
ANNEX A
Re: Park-Hospital GmbH
<TABLE>
<CAPTION>
======================================================================================
Name Residence or Business Address Present Principal Occupation or
Employment
- --------------------------------------------------------------------------------------
<S> <C> <C>
Dr. Heiner Meyer zu Am Natruper Holz 69 Managing Director
Losebeck D-49076 Osnabruck
Germany
- --------------------------------------------------------------------------------------
Armin Sulberg Am Natruper Holz 69 Managing Director
D-49076 Osnabruck
Federal Republic of Germany
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
======================================================================================
</TABLE>
(Page 14 of 47 Pages)
<PAGE> 15
ANNEX B
Re: Paracelsus-Kliniken-Deutschland GmbH
<TABLE>
<CAPTION>
======================================================================================
Name Residence or Business Address Present Principal Occupation or
Employment
- --------------------------------------------------------------------------------------
<S> <C> <C>
Dr. Heiner Meyer zu Am Natruper Holz 69 Managing Director
Losebeck D-49076 Osnabruck
Federal Republic of Germany
- --------------------------------------------------------------------------------------
Armin Sulberg Am Natruper Holz 69 Managing Director
D-49076 Osnabruck
Germany
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
======================================================================================
</TABLE>
(Page 15 of 47 Pages)
<PAGE> 1
EXHIBIT A
Translation from the German Language
16 VI 1631/97
CERTIFICATE OF EXECUTORSHIP
Co-Executors for the estate of
Professor Dr. med. Hartmut Friedrich Wilhelm K R U K E M E Y E R
who died on May 21, 1994 in Osnabruck, his last residence,
are:
Certified Public Accountant Dr. Heiner Meyer zu Losebeck, born October 26,
1952, Vogeler Strasse 6, 49080 Osnabruck,
Attorney at Law and Notary Public Peter Frommhold, born on April 6, 1940,
Universitatsstrasse 30, 48143 Munster.
Osnabruck, September 5, 1997
Amtsgericht-NachlaBgericht (County Court-Surrogate's Court)
Prullage, Director of the Amtsgericht (County Court)
The undersigned managing director of Park-Hospital GmbH represents that the
foregoing is a fair and accurate translation of the
"TESTAMENTSVOLLSTRECKERZEUGNIS"
/S/ DR. HEINER MEYER ZU LOSEBECK
- -----------------------------------------
DR. HEINER MEYER ZU LOSEBECK
(Page 16 of 47 pages)
<PAGE> 1
EXHIBIT B
Translation from the German Language
Number 560 of the Notarial Docket for 1997
[Seal]
NEGOTIATED
at Osnabruck on August 30, 1997
Before me the Officiating Notary
DR. JUR. ULRICH FUNK
with his Office in Osnabruck
appeared today:
1. The physician, Dr. med. Manfred Georg Krukemeyer, born on May 7, 1961,
Am Natruper Holz 69, 49076 Osnabruck, -personally known-
2. The Business Manager, Mr. Armin Sulberg, born on July 22, 1957,
residing at Kassel, Osterbachweg 54
and
the Diplom-Kaufmann (Master of Business Administration), Dr. Heiner
Meyer zu Losebeck, born on October 26, 1952, residing at Vogeler Str.
6, 49080 Osnabruck
-both personally known-
acting in their respective capacity as Managing Director of
Paracelsus-Kliniken- Deutschland GmbH, Am Natruper Holz 69, 49076
Osnabruck, which was newly established today by way of a
reorganization, each of them having sole power of representation and
being exempt from the limitations set forth in Section 181 BGB.
The appearing persons requested the notarization of the following:
CONTRIBUTION AGREEMENT
They declared:
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CONTRIBUTION OF THE PARACELSUS-ACUTE-CARE HOSPITALS
BY WAY OF SPLIT-OFF
A.
SPLIT-OFF PLAN
I.
PARTICIPATING PARTIES ARE:
1.
a) the sole proprietorship Paracelsus-Klinik Zwickau, Proprietor: Dr. med.
Manfred Georg Krukemeyer, Osnabruck, registered with the commercial
register of the County Court (Amtsgericht) of Chemnitz under HR A 3059
and having its seat in Zwickau,
b) the sole proprietorship Paracelsus-Klinik Schoneck, Proprietor: Dr.
med. Manfred Georg Krukemeyer, Osnabruck, registered with the
commercial register of the County Court of Chemnitz under HR A 3042 and
having its seat in Schoneck,
c) the sole proprietorship Paracelsus-Klinik Munchen, Proprietor: Dr. med.
Manfred Georg Krukemeyer, registered with the commercial register of
the County Court of Munchen under HR A 71539 and having its seat in
Munich,
d) the sole proprietorship Paracelsus-Klinik Neuss, Proprietor: Dr. med.
Manfred Georg Krukemeyer, registered with the commercial register of
the County Court of Neuss under HR A 5051 and having its seat in Neuss,
e) the sole proprietorship Paracelsus-Klinik Henstedt-Ulzburg, Proprietor:
Dr. med. Manfred Georg Krukemeyer, registered with the commercial
register of the County Court of Bad Bramstedt under HR A 1683 and
having its seat in Henstedt-Ulzburg,
f) the sole proprietorship Paracelsus-Klinik am Silbersee Hannover,
Proprietor: Dr. med. Manfred Georg Krukemeyer, registered with the
commercial register of the County Court of Hannover under HR A 25513
and having its seat in Langenhagen,
g) the sole proprietorship Paracelsus Klinik Bad Ems, Proprietor: Dr. med.
Manfred Georg Krukemeyer, Osnabruck, registered with the commercial
register of the County Court of Koblenz under HR A 4609 and having its
seat in Bad Ems,
h) the sole proprietorship Paracelsus-Klinik Karlsruhe, Proprietor: Dr.
med. Manfred Georg Krukemeyer, Osnabruck, registered with the
commercial register of the County Court of Karlsruhe under HR A 4277
and having its seat in Karlsruhe,
i) the sole proprietorship Paracelsus-Kurfurstenklinik Bremen, Proprietor:
Dr. med. Manfred Georg Krukemeyer, registered with the commercial
register of the County Court of Bremen under HR A 21250 and having its
seat in Bremen,
j) the sole proprietorship Paracelsus-Elena-Klinik Kassel, Proprietor: Dr.
med. Manfred Georg Krukemeyer, Osnabruck, registered with the
commercial register of the County Court of Kassel under HR A 9742 and
having its seat in Kassel,
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k) the sole proprietorship Paracelsus-Klinik Golzheim, Proprietor: Dr.
med. Manfred Georg Krukemeyer, registered with the commercial register
of the County Court of Dusseldorf under HR A 12906 and having its seat
in Dusseldorf,
l) the sole proprietorship Paracelsus Klinik Osnabruck, Proprietor: Dr.
med. Manfred Georg Krukemeyer, Osnabruck, registered with the
commercial register of the County Court of Osnabruck under HR A 6004
and having its seat in Osnabruck, under a) to l) transferring parties.
2.
The Company Paracelsus-Kliniken-Deutschland GmbH, having its seat in Osnabruck
- under 2. acquiring party.
I, the appearing person named under 1., Dr. med. Manfred Georg Krukemeyer, am
the owner of the sole proprietorships listed above under clause 1. a) to l). I
have additional assets besides those sole proprietorships.
I wish to contribute collectively the sole proprietorships listed above under
clause 1. a) to l) to Paracelsus-Kliniken-Deutschland GmbH, which was newly
established today by way of a reorganization effected by my splitting off the
sole proprietorships listed above under clause 1. a) to l) according to Section
123, para. 3, clause 1 of the Reorganization Law (Umwandlungsgesetz).
II.
SPLIT-OFF
I split off from my assets the sole proprietorships operated under the following
names:
a) Paracelsus-Klinik Zwickau, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
b) Paracelsus-Klinik Schoneck, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
c) Paracelsus-Klinik Munchen, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
d) Paracelsus-Klinik Neuss, Proprietor: Dr. med. Manfred Georg Krukemeyer,
e) Paracelsus-Klinik Henstedt-Ulzburg, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
f) Paracelsus-Klinik am Silbersee Hannover, Proprietor: Dr. med. Manfred
Georg Krukemeyer,
g) Paracelsus Klinik Bad Ems, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
h) Paracelsus-Klinik Karlsruhe, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
i) Paracelsus-Kurfurstenklinik Bremen, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
j) Paracelsus-Elena-Klinik Kassel, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
k) Paracelsus-Klinik Golzheim, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
l) Paracelsus Klinik Osnabruck, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
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and transfer them collectively to Paracelsus-Kliniken-Deutschland GmbH in
Osnabruck which was newly established today by way of a reorganization. The
assets and liabilities of the transferred proprietorships are stated on the
closing balance sheets of the sole proprietorships as of December 31, 1996,
which are attached to this notarial document as Exhibits 1 through 12 and made
part hereof. Also attached is the closing balance sheet of the combined
enterprises of the sole proprietor Dr. Manfred Georg Krukemeyer (Exhibit 13).
Based on these balance sheets, the book value of the equity capital of the
hospitals split-up hereunder amounts to DM120,000 in the aggregate, resulting in
an increase of the registered capital of Paracelsus-Kliniken-Deutschland GmbH
from DM6,880,000 to DM7.000.000.
The physician Dr. med. Manfred Georg Krukemeyer shall be admitted to subscribe
to the increased share of DM120,000 of the registered capital. He agrees to
subscribe to such share.
The Company shall be based on the opening balance sheet as of January 1, 1997
(Exhibit 14). Such opening balance sheet is based on the opening balance sheet
prior to the split-off (Exhibit 15).
The contracting parties agree that, with the transfer of the Paracelsus-Klinik
Osnabruck, the participations in companies affiliated with that hospital
(Paracelsus-Klinik Hemer GmbH; Paracelsus-Klinik Gluckstadt GmbH; Paracelsus
Park Hospital GmbH; Paracelsus U.K. Ltd., England and Paracelsus Berit Klinik
AG, Switzerland) are also transferred. As a precaution, the appearing person
named under 1. assigns his interests in the affiliated domestic and foreign
enterprises to the appearing person named under 2. which accepts the transfer
hereby. As consideration, the appearing person named under 2. assigns the
dividend rights pertaining to the Paracelsus Berit Klinik AG, Switzerland. The
purpose of the assignment is to cover personal liabilities of the appearing
person named under 1. The appearing person named under 1. consents to the sale
of the hospital subject to the condition that his personal liabilities mentioned
before are appropriately covered otherwise.
Should, according to foreign law, further requirements need to be fulfilled for
the consummation of the aforementioned assignments, the parties agree to meet
such requirements within 6 weeks after notarization.
III.
RECORD DATE
As of the December 31, 1996 record date, the actions of:
a) Paracelsus-Klinik Zwickau, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
b) Paracelsus-Klinik Schoneck, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
c) Paracelsus-Klinik Munchen, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
d) Paracelsus-Klinik Neuss, Proprietor: Dr. med. Manfred Georg Krukemeyer,
(Page 20 of 47 pages)
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e) Paracelsus-Klinik Henstedt-Ulzburg, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
f) Paracelsus-Klinik am Silbersee Hannover Proprietor: Dr. med. Manfred
Georg Krukemeyer,
g) Paracelsus Klinik Bad Ems, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
h) Paracelsus-Klinik Karlsruhe, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
i) Paracelsus-Kurfurstenklinik, Bremen Proprietor: Dr. med. Manfred Georg
Krukemeyer,
j) Paracelsus-Elena-Klinik Kassel, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
k) Paracelsus-Klinik Golzheim, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
l) Paracelsus Klinik Osnabruck, Proprietor: Dr. med. Manfred Georg
Krukemeyer.
shall be deemed to be undertaken on behalf of Paracelsus-Kliniken-Deutschland
GmbH. As of this record date, the shareholder of Paracelsus-Kliniken-Deutschland
GmbH shall be entitled to the profit on the balance sheet. For tax purposes the
split-off shall have retroactive effect as of December 31, 1996 pursuant to
Section 20 of the Reorganization Tax Law (Umwandlungssteuergesetz).
IV.
EMPLOYEES
The company Paracelsus-Kliniken-Deutschland GmbH takes over the employees of the
sole proprietorships
a) Paracelsus-Klinik Zwickau, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
b) Paracelsus-Klinik Schoneck, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
c) Paracelsus-Klinik Munchen, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
d) Paracelsus-Klinik Neuss, Proprietor: Dr. med. Manfred Georg Krukemeyer,
e) Paracelsus-Klinik Henstedt-Ulzburg, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
f) Paracelsus-Klinik am Silbersee Hannover, Proprietor: Dr. med. Manfred
Georg Krukemeyer,
g) Paracelsus Klinik Bad Ems, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
h) Paracelsus-Klinik Karlsruhe, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
i) Paracelsus-Kurfurstenklinik Bremen, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
j) Paracelsus-Elena-Klinik Kassel, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
k) Paracelsus-Klinik Golzheim, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
l) Paracelsus Klinik Osnabruck, Proprietor: Dr. med. Manfred Georg
Krukemeyer.
A result of the takeover is that the employees obtain additional
co-determination rights. Pursuant to the Law on the Co-Determination of
Employees, dated May 4, 1976 (BGBl. I p. 1153) (Mitbestimmungsgesetz), a
supervisory board must be established because the number of
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employees will increase to over 2,000. The supervisory board will consist of six
(6) supervisory board members each of the shareholders and of the employees
(four (4) employees from the Company and two (2) as representatives of the trade
unions) because the number of employees does not exceed 10,000.
V.
PARTICIPATION OF THE WORKERS' COUNCIL (Betriebsrat)
The workers' councils of the entities participating in the reorganization as
well as the Central Workers' Council of the former Paracelsus-Kliniken Dr. med.
Hartmut Krukemeyer GmbH & Co. KG have waived their information right and the
one-month period pursuant to Section 126 para. 3 of the Reorganization Law
(Section 5, para. 3 Reorganization Law). Certified photocopies of the waivers
are attached as exhibits to the applications.
B.
RESOLUTIONS
1. A report on the split-off is not required; as a precaution, the
preparation of such report is waived.
2. We also waive an audit of the split-off.
3. I, the appearing person named under 1. as proprietor of
a) Paracelsus-Klinik Zwickau, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
b) Paracelsus-Klinik Schoneck, Proprietor: Dr. med. Manfred Georg
Krukemeyer, Osnabruck
c) Paracelsus-Klinik Munchen, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
d) Paracelsus-Klinik Neuss, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
e) Paracelsus-Klinik Henstedt-Ulzburg, Proprietor: Dr. med.
Manfred Georg Krukemeyer,
f) Paracelsus-Klinik am Silbersee Hannover Proprietor: Dr. med.
Manfred Georg Krukemeyer,
g) Paracelsus Klinik Bad Ems, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
h) Paracelsus-Klinik Karlsruhe, Proprietor: Dr. med. Manfred
Georg Krukemeyer, Osnabruck
i) Paracelsus-Kurfurstenklinik Bremen, Proprietor: Dr. med.
Manfred Georg Krukemeyer,
j) Paracelsus-Elena-Klinik Kassel, Proprietor: Dr. med. Manfred
Georg Krukemeyer, Osnabruck
k) Paracelsus-Klinik Golzheim, Proprietor: Dr. med. Manfred Georg
Krukemeyer,
l) Paracelsus Klinik Osnabruck, Proprietor: Dr. med. Manfred
Georg Krukemeyer,
as well as we,
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Dr. med. Manfred Georg Krukemeyer and the Dr. med. Hartmut Krukemeyer
Verwaltungs-GmbH, represented by the managing director Dr. med. Manfred
Georg Krukemeyer, having sole power of representation and being exempt
from the limitations of Section 181 BGB, as shareholders of the company
Paracelsus-Kliniken-Deutschland GmbH, and Mr. Armin Sulberg as well as
Dr. Meyer zu Losebeck, each of them in their respective capacity as
managing director of the company Paracelsus-Kliniken-Deutschland GmbH
and each having sole power of representation, agree to the split-off by
way of separation and transfer/takeover.
4. We waive our right to file a complaint against the validity of the
separation- and takeover agreement.
5. We, the appearing persons, Dr. med. Manfred Georg Krukemeyer and Armin
Sulberg as well as Dr. Meyer zu Losebeck, further waive all actions,
declarations, and submissions of documents that can be waived pursuant
to the Reorganization Law, to the extent such waiver is legally
possible.
6. Section 5, clause 1 of the charter of the
Paracelsus-Kliniken-Deutschland GmbH shall be changed and shall state
the following:
1. The registered capital of the Company shall be DM7,000,000.
C.
PERSONAL ASSETS
I, Dr. med. Manfred Georg Krukemeyer, confirm that my personal assets exceed the
liabilities.
D.
FINAL PROVISIONS
1.
COSTS
The costs of this Notarial Deed and its consummation shall be borne by
Paracelsus-Kliniken-Deutschland GmbH.
2.
POWER OF ATTORNEY
We authorize the staff of the Notary's Office, Gisela Schluter, Tanja Rencis,
and Marion Wechelmann, all at 49074 Osnabruck, Moserstrasse 33, each
individually, to make all declarations that possibly become necessary for the
consummation, amendment and/or supplement of this Notarial Deed on behalf of us
and of the companies and enterprises represented by us. The
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authorized staff is exempt from the limitations of Section 181 BGB and entitled
to grant substitute powers of attorney.
3.
SEVERANCE CLAUSE
Should one of the provisions above be or become invalid, the remaining
provisions of this Agreement shall remain unaffected thereof. For the invalid
provision a valid provision shall be found which corresponds as much as possible
to the economic meaning of the invalid provision.
The appearing person declared that all declarations which he has made in this
Notarial Deed on behalf of himself have also been made in the name and pursuant
to instructions of his deceased father, Prof. Dr. med. Hartmut Krukemeyer, as
his attorney-in-fact based on a General Power of Attorney (No. 138 of the
Notarial Docket for 1993) granted on October 18, 1993 in the presence of the
notary Albert Korte having his office in Osnabruck.
An original copy of this power of attorney was made available to the officiating
notary at the time of notarization and a certified copy of it was attached to
this Notarial Deed. The renewed reading of the power of attorney was waived.
The Notary established that pursuant to the language of the document, the power
of attorney is defined as a general power of attorney and in the document it was
declared that this general power of attorney shall not terminate upon death.
4.
The Notary points out the following to the appearing persons:
The County Court of Osnabruck revoked in a decree, dated August 19, 1997, the
Certificate of Inheritance that was issued to Dr. med. Manfred Georg Krukemeyer
on July 27, 1994 and appointed executors in an additional decree, dated August
25, 1997.
As executors were appointed:
a) Dr. Heiner Meyer zu Losebeck, Osnabruck
b) Attorney and Notary Peter Frommhold, Munster
If and to the extent that the estate of Dr. med. Hartmut Krukemeyer who deceased
in May of 1994 is affected by this Notarial Deed, the dispositions may be
subject to the approval by the executors or the termination of their rights
pursuant to Section 2205 BGB, Section 2211 BGB. A subsequent approval does not
have retroactive effect.
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The Notary pointed out that the waiver of the workers' council is not regulated
by statute; however, in general, it is deemed valid.
The protocol was read to the appearing persons, was approved by them and signed
by them in handwriting as follows; the proceedings ended at 3:30 p.m.:
Signed: Dr. Manfred Georg Krukemeyer
Signed: Armin Sulberg
Signed: Dr. Heiner Meyer zu Losebeck
L.S. signed: Dr. Ulrich Funk, Notary
The undersigned managing director of Park-Hospital GmbH represents that the
foregoing is a fair and accurate translation of the "EINBRINGUNGSVERTRAG"
December 9, 1997
/S/ DR. HEINER MEYER ZU LOSEBECK
- ------------------------------------------------
DR. HEINER MEYER ZU LOSEBECK
(Page 25 of 47 pages)
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EXHIBIT C
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "AGREEMENT") is entered into as of August
16, 1996, between Park Hospital GmbH, a German corporation (the "SHAREHOLDER"),
and Paracelsus Healthcare Corp., a California corporation ("PARACELSUS").
WHEREAS, Paracelsus, Champion Healthcare Corporation, a Delaware
corporation ("CHAMPION"), and PC Merger Sub, Inc., a Delaware corporation
("MERGER SUB"), have entered into an Agreement and Plan of Merger, dated as of
April 12, 1996 (the "MERGER AGREEMENT"), providing for, among other things, the
merger (the "MERGER") of Merger Sub with and into Champion pursuant to the terms
and conditions of the Merger Agreement, and setting forth certain
representations, warranties, covenants and agreements of the parties thereto in
connection with the Merger; and
WHEREAS, upon consummation of the Merger, the Shareholder will continue to
Beneficially Own Voting Securities of Paracelsus constituting a majority of the
Total Voting Power of Paracelsus;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
15. CERTAIN DEFINITIONS. (a) For the purposes of this Agreement, the
following terms shall have the following meanings:
"AFFILIATE" and "ASSOCIATE" when used with reference to any Person shall
have the meanings assigned to such terms in Rule 12(b)-2 of the Exchange Act as
in effect on the date hereof; provided, that Paracelsus and its Subsidiaries and
existing directors and executive officers of Champion and Paracelsus who become
and remain directors and executive officers of Paracelsus shall not, solely as a
result of holding such office, be deemed Affiliates or Associates of any
Investor for purposes of this Agreement.
"ACQUISITION PROPOSAL" shall mean any bona fide offer or proposal for
(iii) a merger or other business combination (other than a Surviving Company
Merger) involving Paracelsus,(iv) the acquisition of any Voting Securities
representing more than 50% of the Total Voting Power of Paracelsus after giving
effect to such Acquisition Proposal or (v) the acquisition of all or
substantially all of the assets of Paracelsus.
"APPROVED ACQUISITION PROPOSAL" shall mean an Acquisition Proposal that is
approved and recommended (and, immediately prior to consummation of such
Acquisition Proposal, that continues to be recommended) by a vote of 75% of the
entire Board and by a majority of the Independent Directors.
A Person shall be deemed the "BENEFICIAL OWNER" and to have "BENEFICIAL
OWNERSHIP" of, and to "BENEFICIALLY OWN", any Voting Securities as to which such
Person or any of such Person's Affiliates or Associates is or may be deemed to
be the beneficial owner pursuant to Rule 13d-3 or 13d- 5 under the Exchange Act,
as such rules are in effect on the date of this Agreement, as well as any Voting
Securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of
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time or the occurrence of conditions) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than the rights under the Rights Plan), warrants or options, or
otherwise; provided, however, that the Shareholder shall not be deemed to be the
"BENEFICIAL OWNER" and to have "BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY
OWN", any voting securities of Paracelsus by virtue of the Right of First
Refusal Agreement dated the date hereof between the Shareholder and certain
persons until such moment in time as the Shareholder or any Affiliate or
Associate of the Shareholder acquires any such Voting Securities in a closing
pursuant thereto; provided, further, that a Person shall not be deemed the
"BENEFICIAL OWNER", or to have "BENEFICIAL OWNERSHIP" of, or to "BENEFICIALLY
OWN", any Voting Security (i) solely because such Voting Security has been
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered Voting Security is
accepted for payment or exchange or (ii) solely because such Person or any of
such Person's Affiliates or Associates has or shares the power to vote or direct
the voting of such Voting Security pursuant to a revocable proxy or consent
given in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations under the Exchange
Act, except if such power (or the arrangements relating thereto) is then
reportable under Item 6 of Schedule l3D under the Exchange Act (or any similar
provision of a comparable or successor report). For purposes of this Agreement,
in determining the percentage of the outstanding Voting Securities with respect
to which a Person is the Beneficial Owner, all shares as to which such Person is
deemed the Beneficial Owner shall be deemed outstanding.
"BOARD" shall mean the Board of Directors of Paracelsus.
"CLOSING DATE" shall mean the date upon which the Closing (as defined in
the Merger Agreement) shall occur.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"GROUP" shall have the meaning assigned to such term in Rule 13(d)-3 of
the Exchange Act as in effect on the date hereof.
"INDEPENDENT DIRECTORS" shall mean those directors of the Board who are
not Shareholder Directors, Transferee Directors or officers of Paracelsus or any
of its Subsidiaries; provided that, only for the purpose of determining an
individual's qualification to vote on a particular matter,. each such individual
also must not have (and must not be an Affiliate of any Person who has) any
material financial interest with respect to the particular matter under
consideration.
"INVESTOR" shall mean the Shareholder and any Permitted Transferee.
"MINORITY SHAREHOLDERS" shall mean Beneficial Owners of Voting Securities
who are not an Investor, Affiliates or Associates of an Investor or any member
of a Group of which an Investor, or Affiliates or Associates of the Investor,
are members with respect to Shares (in each case for each
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Investor and Affiliates and Associates of such Investor only for so long as this
Agreement is in effect with respect to the respective Investor).
"MINORITY SHARES" shall mean the Shares Beneficially Owned by Minority
Shareholders.
"PERMITTED TRANSFEREE" shall mean a permitted transferee under Section 5
(a), the proviso of Section 5(c) Section 5(f), Section 5(g), Section 5(h) or
Section 5(i).
"PERSON" shall mean an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a governmental or political subdivision or an agency or instrumentality thereof.
"QUALIFIED PARTIES" shall mean any (i) trust described in Section 664 of
the Code (or any substantially similar entity under non-U.S. tax laws) of which
the Investor or Family Members of the Investor are income beneficiaries and (ii)
any charitable organization described in Section 501(c)(3) of the Code (or any
substantially similar entity under non-U.S. tax laws), in both cases that is or
simultaneously agrees to be bound as an Investor under this Agreement.
"RIGHTS PLAN" shall have the meaning assigned thereto in the Merger
Agreement.
"SHAREHOLDER" shall, in addition to the meaning ascribed thereto in the
first paragraph hereof, mean any Investor that immediately prior to becoming an
Investor hereunder is (i) a Wholly-Owned Subsidiary of the Shareholder or (ii)
Beneficially Owns 100% of the Total Voting Power of the Shareholder; provided
that Dr. Manfred George Krukemeyer (x) continues to Beneficially Own 100% of the
Total Voting Power of such Investor and (y) guarantees to Paracelsus the
performance of all obligations of such Investor under this Agreement.
"SHARES" shall mean the shares of common stock, no par value per share, of
Paracelsus, to be issued in the Merger.
"SUBSIDIARY" shall mean, with respect to any Person, any entity at least
50% of the Voting Securities of which are owned directly or indirectly by such
Person.
"SURVIVING COMPANY MERGER" shall mean any merger or other business
combination or reorganization (i) where the transaction has been approved by a
unanimous vote of the entire Board or (ii) where the holders of Voting
Securities of Paracelsus prior to such transaction will beneficially own (solely
for the purpose of this definition, as determined pursuant to Rule 13d-3 or Rule
13d-5 of the Exchange Act) in the aggregate at least 60% of the surviving
corporation's Total Voting Power immediately giving effect to such transaction.
"TRANSFER" shall mean any direct or indirect sale, transfer, assignment,
pledge, hypothecation, mortgage, or other disposition, including those by
operation or succession of law, merger or otherwise, or any encumbrance (other
than encumbrances arising by operation of law).
"TOTAL VOTING POWER" shall mean the non-diluted aggregate number of votes
that may be cast by the holders of outstanding Voting Securities.
(Page 28 of 47 Pages)
<PAGE> 4
"VOTING SECURITIES" shall mean all securities entitled to vote in the
ordinary course in the election of directors or of Persons serving in a similar
governing capacity, including the voting rights attached to such securities and
rights or options to acquire such securities.
"WHOLLY-OWNED SUBSIDIARY" shall mean, with respect to any Person, a
Subsidiary all of the Voting Securities of which are owned, directly or
indirectly, by such Person.
(b) For the purposes of this Agreement, the following terms shall
have the meanings assigned to them in the corresponding Sections of this
Agreement:
"Acceptance Notice" Section 7(b)
"Amended Proposal Notice" Section 7(a)
"Champion Capital Stock" Section 2(b)
"Champion Common Stock" Section 2(b)
"Eligible Person" Section 9(a)
"Fair Proposal" Section 6
"Fair Value" Section 6(b)
"Family Members" Section 5(h)
"Heirs" Section 5(h)
"Initiation Date" Section 6(a)
"Investor Appraiser" Section 6(a)
"Higher Appraised Amount" Section 6(c)
"Lower Appraised Amount" Section 6(c)
"Mutually Appraised Amount" Section 6(c)
"Mutually Designated Appraiser" Section 6(c)
"Offer Price" Section 7(a)
"Paracelsus Appraiser" Section 6(a)
"Paracelsus Common Stock" Section 2(a)
"Price" Section 6(c)
(Page 29 of 47 Pages)
<PAGE> 5
"Proposal Notice" Section 7(a)
"Shareholder Directors" Section 9(a)
"Shareholder Proposal" Section 7(a)
"Transferee Directors" Section 9(g)
16. REPRESENTATIONS OF THE SHAREHOLDER. As of the date hereof, the
Shareholder represents and warrants to Paracelsus that:
(a) such Shareholder Beneficially Owns all of the outstanding shares
of common stock, no par value per share, of Paracelsus ("PARACELSUS COMMON
STOCK");
(b) such Shareholder does not Beneficially Own any shares of common
stock, par value $.0l per share, of Champion ("CHAMPION COMMON STOCK") or
any shares of Series C Preferred Stock or Series D Preferred Stock of
Champion (collectively, the "CHAMPION CAPITAL STOCK");
(c) this Agreement has been duly executed and delivered by the
Shareholder and, assuming due execution by Paracelsus, this Agreement is a
legal, valid and binding obligation, enforceable against the Shareholder
in accordance with its terms; and
(d) The execution, delivery and performance by the Shareholder of
this Agreement do not and will not contravene or conflict with any
provision of any law, regulation, judgment, injunction, order or decree
binding upon the Shareholder or any agreement, contract or other
instrument to which the Shareholder is a party, other than any such
contraventions or conflicts that would not prevent or materially delay the
performance of the Shareholder's obligations hereunder.
17. REPRESENTATIONS OF PARACELSUS. As of the date hereof, Paracelsus
represents and warrants to the Shareholder that the execution, delivery and
performance of this Agreement by it has been duly and validly authorized by all
necessary corporate action on its part and, assuming due execution by the
Shareholder, that this Agreement is a legal, valid and binding obligation,
enforceable against Paracelsus in accordance with its terms.
18. STANDSTILL PROVISIONS. An Investor shall not, and shall not suffer or
permit any Affiliates or Associates of such Investor to, whether acting alone or
in concert with others:
(a) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are used in Regulation 14A
promulgated under the Exchange Act) to vote or consent with respect to any
Voting Securities of Paracelsus in any way that is inconsistent with the
provisions of this Agreement;
(b) unless Paracelsus shall be in material breach of Section 9,
become a "participant" in any "election contest" (as such terms are
defined or used in Rule 14a-ll under the Exchange Act) in opposition to a
Board slate of Paracelsus nominated by the Board;
(Page 30 of 47 Pages)
<PAGE> 6
(c) initiate or propose the approval of one or more shareholder
proposals with respect to Paracelsus as described in Rule 14a-8 under the
Exchange Act, or induce or attempt to induce any other Person to initiate
any shareholder proposal with respect to Paracelsus;
(d) except in accordance with Section 9 or solely in connection with
the termination of an executive employment contract, seek election to or
seek to place a representative on the Board or seek the removal of any
member of the Board;
(e) in any way that is inconsistent with the terms of this
Agreement, (i) solicit, seek to effect, negotiate with or provide
non-public information to any other Person with respect to, (ii) make any
statement or proposal, whether written or oral, to the Board or any
director or officer of Paracelsus with respect to or (iii) otherwise make
any public announcement or proposal whatsoever with respect to, any form
of business combination transaction (with any Person) involving Paracelsus
or the acquisition of a substantial portion of the equity securities or
assets of Paracelsus or any Subsidiary of Paracelsus, including a merger,
consolidation, tender offer, exchange offer or liquidation of Paracelsus's
assets, or any restructuring, recapitalization or similar transaction with
respect to Paracelsus or any material Subsidiary of Paracelsus; provided,
however, that the foregoing shall not (x) apply to any discussion between
or among the Investor and Paracelsus or any of their respective
Affiliates, Associates, officers, employees, agents or representatives or
(y) in the case of clause (ii) above, be interpreted to limit the ability
of the Investor, or any Shareholder Director or Transferee Director to
make any such statement or proposal or to discuss any such proposal with
any officer or director of or advisor to Paracelsus or advisor to the
Board unless, in either case, it would reasonably be expected to require
Paracelsus to make a public announcement regarding such discussion,
statement or proposal;
(f) form, join or participate in or encourage the formation of a
Group with respect to any Voting Securities of Paracelsus, other than a
Group consisting solely of the Investors, Paracelsus and Affiliates and
Associates of the Investors and Paracelsus; provided, that, except in
connection with a Fair Proposal in accordance with Section 6, no Investor
nor Affiliates or Associates of such investor shall in any case form, join
or participate in or encourage the formation of any Group of which the
members, together with all of such members' respective Affiliates and
Associates, will, together with the Investor and the Affiliates and
Associates of the Investor, Beneficially Own 66-2/3% or more of the Total
Voting Power of Paracelsus;
(g) except in compliance with Section 5, deposit any Voting
Securities of Paracelsus into a voting trust or subject any such Voting
Securities to any arrangement or agreement with respect to the voting
thereof, other than any such trust, arrangement or agreement (i) the only
parties to, or beneficiaries of, which are the Investor, Qualified
Parties, Paracelsus or Affiliates and Associates of the Investor or
Paracelsus and (ii) the terms of which do not require or expressly permit
any party thereto to act in a manner inconsistent with this Agreement;
provided that all of the Voting Securities deposited into any such trust
or subjected to any arrangement or agreement, the parties to or
beneficiaries of which include Qualified Parties, shall be deemed to be
Beneficially Owned by the respective Investor for all purposes of this
Agreement; or
(Page 31 of 47 Pages)
<PAGE> 7
(h) publicly disclose any intention, plan or arrangement
inconsistent with the terms of this Agreement, or make any such disclosure
privately if it would reasonably be expected to require Paracelsus to make
a public announcement regarding such intention, plan or arrangement.
19. VOTING SECURITY TRANSFERS. An Investor shall not, and shall not suffer
or permit any Affiliates or Associates of such Investor to, Transfer, in any
single transaction or group of related transactions, any Voting Securities,
except for a Transfer that complies with any of the following subsections:
(a) to any Person who owns 100% of the Total Voting Power of the
Investor and to any Wholly-Owned Subsidiary of the Investor or any such
Person; provided, that (i) such transferee becomes a party to this
Agreement as an Investor and (ii) in the case of a Transfer to a
Wholly-Owned Subsidiary, the Person who is not a Wholly-Owned Subsidiary
of any Person and who Beneficially owns 100% of the Total Voting Power of
the Wholly-Owned Subsidiary of the Transferring Investor guarantees to
Paracelsus the performance of all obligations of such transferee under
this Agreement;
(b) to any Person such that, after such Transfer, such Person,
together with the Affiliates and Associates of such Person, will not
Beneficially Own, after giving effect to such Transfer, Voting Securities
of Paracelsus constituting 25% or more of the Total Voting Power of
Paracelsus; provided that, so long as this Agreement is in effect with
respect to such Investor, except in connection with a Fair Proposal in
accordance with Section 6 or a Shareholder Proposal in accordance with
Section 7, such Investor, or any Affiliates or Associates of the Investor,
shall not in any case form, join or participate in or encourage the
formation of a Group with such Person, or any Affiliates or Associates of
such Person, of which the members, together with all of such members'
respective Affiliates and Associates, will, together with such Investor
and all Affiliates and Associates of such Investor, Beneficially Own 25%
or more of the Total Voting Power of Paracelsus;
(c) in a bona fide pledge of such Voting Securities to a financial
institution to secure borrowings as permitted by applicable laws, rules
and regulations; provided, that, if such pledge results in a pledge of
more than 25% of the Total Voting Power of Paracelsus to such financial
institution, such financial institution agrees to be bound by the
obligations of the Investor under this Agreement (but shall not have any
of the rights of an Investor under this Agreement until such pledgee
acquires such Voting Securities upon foreclosure pursuant to the terms of
the pledge agreement, in which case such pledgee may transfer such Voting
Securities in accordance with this Section as if such pledgee were an
Investor hereunder and cause a transferee to have all rights and
obligations of a Permitted Transferee hereunder);
(d) to underwriters in connection with an underwritten public
offering of such Voting Securities on a firm commitment basis registered
under the Securities Act. of 1933, as amended, pursuant to which the sale
of such Voting Securities will be in a manner to effect a broad
distribution;
(e) to Paracelsus or a Wholly-Owned Subsidiary of Paracelsus;
(Page 32 of 47 Pages)
<PAGE> 8
(f) to a Person so long as either immediately after or
simultaneously with the acquisition of such Voting Securities, such Person
or an Affiliate of such Person makes an Acquisition Proposal to acquire
all outstanding Shares at the same price and on equivalent terms offered
to the Investor and the Investor's Affiliates and Associates that is made
in compliance with the Exchange Act and the rules and regulations
thereunder; provided, that (i) other than with respect to the Shares to be
Transferred by the Investor or the Investor's Affiliates or Associates,
such Person may not purchase any Shares in the Acquisition Proposal and
the Acquisition Proposal may not otherwise be consummated unless it is
approved and recommended (and, immediately prior to consummation of the
Acquisition Proposal, continues to be recommended) by a majority of the
Independent Directors, (ii) if the Acquisition Proposal is a tender or
exchange offer that is approved and recommended (and, immediately prior to
consummation of the Acquisition Proposal, continues to be recommended) by
a majority of the Independent Directors, the terms of such tender shall
provide that such Person shall, and such Person shall be required to,
accept for payment and purchase all Shares validly tendered and not
withdrawn upon expiration of the offer if a majority of the Minority
Shares are validly tendered and not withdrawn upon expiration of the offer
and (iii) such Person shall agree to be bound as an Investor by all
obligations of the Investor under this Agreement and shall remain so
obligated notwithstanding the termination of this Agreement with respect
to any other Investor in accordance with Section 16(e). In addition to the
foregoing, for a period of one year from the Closing Date, other than with
respect to the Shares to be Transferred by the Investor or the Investor's
Affiliates or Associates, (A) if the Acquisition Proposal is not a tender
or exchange offer, the Acquisition Proposal may not be consummated unless
it is approved by holders of a majority of the Minority Shares at a
meeting duly called therefor, in addition to any vote required by law, or
(B) if the Acquisition Proposal is a tender or exchange offer, such Person
may not accept for payment or purchase any Shares in connection with the
offer unless a majority of the Minority Shares have been tendered and not
withdrawn upon expiration of the offer;
(g) to any Qualified Parties; provided, that (i) at the time of such
Transfer, the Investor or the Family Members of the Investor constitute a
sufficient number of the directors or trustees, as the case may be, of
such Qualified Parties to permit approval of matters by such Qualified
Parties without the approval of any other director or trustee of such
Qualified Parties;
(h) in the case of a Transfer by an Investor who is a natural
Person, a Transfer (A) in the case of the death or such investor, to such
Investor's executors, administrators, testamentary trustees, heirs,
devisees, intestates and legatees ("HEIRS") and (B) to such Investor's
current or future spouse, parents, siblings or descendants of such
parents', siblings' or spouses (the "FAMILY MEMBERS"); provided that such
Heirs and Family Members, as the case may be, simultaneously agree to be
bound as an Investor to all of the obligations of the Investor under this
Agreement; or
(i) to any Person in connection with an Approved Acquisition
Proposal or Surviving Company Merger.
20. PROHIBITED ACQUISITIONS AND CIRCUMSTANCES PERMITTING ACQUISITIONS. An
Investor shall not, and shall not suffer or permit any Affiliates or Associates
of the Investor to, acquire, or agree or offer to purchase or otherwise acquire,
in a transaction or group of related transactions, any Voting
(Page 33 of 47 Pages)
<PAGE> 9
Securities of Paracelsus such that the Investor, together with the Affiliates
and Associates of the Investor, after giving effect to such transaction or
transactions, will Beneficially Own 66-2/3% or more of the Total Voting Power of
Paracelsus, except pursuant to a Fair Proposal (as hereinafter defined). For the
purposes of this Agreement, a "FAIR PROPOSAL" shall mean (i) an Acquisition
Proposal by such Investor (or such Investor's Affiliates or Associates) that is
approved by the unanimous vote of the Independent Directors or (ii) a
transaction to acquire all of the outstanding Shares that complies with all of
the following provisions of this Section:
(a) APPRAISERS. The Investor shall make a written request expressing
the Investor's desire to acquire Beneficial Ownership of Voting Securities
to the Board. Promptly after the Board's receipt of such written request,
the Independent Directors will designate an investment banking firm (the
date of such designation, the "INITIATION DATE") of recognized national
standing that does not Beneficially Own (excluding securities held on
behalf of third parties) a material amount of the securities of Paracelsus
(the "PARACELSUS APPRAISER") and the Investor will designate an investment
banking firm of recognized national standing that does not Beneficially
Own (excluding securities held on behalf of third parties) a material
amount of the securities of Paracelsus (the "INVESTOR APPRAISER"), in each
case to determine the fair value (determined in accordance with the
procedures described below) per Share.
(b) DEFINITION OF FAIR VALUE. The Investor acknowledges that the
consideration that would constitute fair value per Share is the price per
Share (including control premium) that an unrelated third party would pay
if it were to acquire all outstanding Shares (including the Shares held by
the Investor and Affiliates and Associates of the Investor) in an
arm's-length transaction, assuming that Paracelsus was being sold in a
manner reasonably designed to solicit all possible participants and permit
all interested parties an opportunity to participate and to achieve the
best value reasonably available to the Shareholders at that time, taking
into account all then existing circumstances. Each of the investment
banking firms referred to in this Section will be instructed to determine
fair value per Share in this manner.
(c) DETERMINATION OF PRICE. Within 30 days after the Initiation
Date, the Paracelsus Appraiser and the Investor Appraiser will each
determine its initial view as to the fair value per Share and consult with
one another with respect thereto. By the 45th day after the Initiation
Date, the Paracelsus Appraiser and the Investor Appraiser will each have
determined its final view as to the fair value per Share. At that point,
if the difference between the Higher Appraised Amount (as defined below)
and the Lower Appraised Amount (as defined below) is not greater than l0%
of the Higher Appraised Amount, the price per Share (the "PRICE") will be
the average of those two views. Otherwise, the Paracelsus Appraiser and
the Investor Appraiser will agree upon and jointly designate a third
investment banking firm of recognized national standing that does not
Beneficially Own (excluding securities held on behalf of third parties) a
material amount of the securities of Paracelsus (the "MUTUALLY DESIGNATED
APPRAISER") to determine such fair value. The Mutually Designated
Appraiser will, no later than the 60th day after the Initiation Date,
determine such fair value (the "MUTUALLY APPRAISED AMOUNT"), and the Price
will be (x) the Mutually Appraised Amount, if such amount falls within the
range of values that is greater than one-third and less than two-thirds of
the way between the Lower Appraised Amount and the Higher Appraised
Amount, or (y) the average of the Mutually Appraised Amount and the other
Appraised Amount (Lower or Higher) that is closest to the Mutually
Appraised Amount, if the Mutually Appraised Amount does not fall
(Page 34 of 47 Pages)
<PAGE> 10
within that range; provided, that if the Price so determined is less than
the Lower Appraised Amount or more than the Higher Appraised Amount, the
Price shall be the Lower Appraised Amount or the Higher Appraised Amount,
as the case may be. During such 60 day period, Paracelsus will not,
subject to fiduciary duties and applicable law, enter into or recommend to
its shareholders any other Acquisition Proposal.
As used herein, "LOWER APPRAISED AMOUNT" means the lower of the
respective final views of the Paracelsus Appraiser and the Investor
Appraiser as to fair value per Share and "HIGHER APPRAISED AMOUNT" means
the higher of such respective final views.
(d) FAIR PROPOSAL.
(i) Once the Price is determined as provided above, the
Investor will have 15 days to notify the Board whether he desires to
proceed with a Fair Proposal at the Price.
(ii) If the Investor decides not to proceed with a Fair
Proposal, (x) he shall promptly notify the Board in writing of such
fact (it being understood that the failure to notify the Board
within 15 days shall constitute notification to the Board that the
Investor and the Affiliates and Associates of the Investor do not
desire to proceed with a Fair Proposal) and (y) the Investor and the
Affiliates and Associates of the Investor shall not make a written
request for an Acquisition Proposal to the Board under this Section
for a period of six months from the date the Investor notifies (or
is deemed to notify) the Board of his intent not to proceed with a
Fair Proposal, provided that the Investor and the Investor's
Affiliates and Associates shall not at any time be restricted from
making a written request for an Acquisition Proposal to the Board
under this Section at a price that is equal to or in excess of the
last determined Price or from exercising their rights under Section
7.
(iii) If the Investor decides to proceed with a Fair Proposal,
the Investor may pay or cause to be paid the Price in cash or
non-cash consideration or any combination of cash and non-cash
consideration that the Investor Appraiser and the Paracelsus
Appraiser mutually agree within 15 days will have an aggregate
market value, on a fully distributed basis, of not less than the
Price; provided, that in the event such appraisers shall fail to
reach such agreement, they shall within five business days designate
the Mutually Agreed Appraiser to make such determination within ten
days after such designation, whose determination shall be final.
(e) MEETING OF SHAREHOLDERS; TENDER OFFER. If the Investor
determines to proceed with a Fair Proposal as set forth above, the
Investor and Paracelsus agree that each will enter into an agreement
with the other therefor (containing customary terms and conditions
applicable in a situation in which the acquiror has an ownership
position comparable to the Investor's ownership interest in
Paracelsus) and, if the Fair Proposal is not to be consummated
pursuant to a tender or exchange offer for all of the outstanding
Shares, will cause a meeting of shareholders of Paracelsus to be
held as soon as practicable to consider and vote thereon; provided,
that, for a period of one year following the Closing Date, no Fair
Proposal may be consummated unless (i) if
(Page 35 of 47 Pages)
<PAGE> 11
the Fair Proposal is not a tender or exchange offer, it is approved
by the affirmative vote of the holders of a majority of the Minority
Shares at a meeting duly called therefor, in addition to any vote
required by law, or (ii) if the Fair proposal is a tender or
exchange offer, a majority of the Minority Shares have been validly
tendered and not withdrawn and are accepted for payment as of the
expiration date (as may be extended) of the offer. In the event that
the Fair Proposal is not approved or insufficient Shares are
tendered to consummate the Fair Proposal in accordance with the
terms hereof within 180 days from the Initiation Date (which period
may be extended by a vote of 75% of the entire Board and a majority
of the Independent Directors of the Board), the Investor shall
terminate the Fair Proposal and shall not make a written request for
an Acquisition Proposal to the Board under this Section for a period
of one year from the Initiation Date; provided that the Investor and
the Investor's Affiliates and Associates shall not at any time be
restricted from exercising their rights under Section 7. Paracelsus
agrees, subject to fiduciary duties and in accordance with
applicable law, to promptly call and to take all other action
necessary to hold the shareholder meeting referred to above.
(f) JUDGMENT OF INDEPENDENT DIRECTORS. Notwithstanding
anything to the contrary in the foregoing Sections 6 (a)-(e), in the
event that the Independent Directors unanimously determine, in the
good faith exercise of their fiduciary duties, based upon the facts
and the circumstances existing at the time of such determination,
that is in the best interests of Paracelsus and the holders of the
Shares that the Independent Directors approve and recommend, in
accordance with the terms hereof, an Acquisition Proposal at a lower
price than the Price, then such unanimously approved Acquisition
Proposal shall be a Fair Proposal and the price at which the
Investor may consummate the Acquisition Proposal hereunder shall be
the price so determined by the Independent Directors.
21. RIGHT OF FIRST OFFER.
(a) NOTIFICATION. After the Effective Time (as defined in the Merger
Agreement) , Paracelsus will not enter into or recommend any Approved
Acquisition Proposal without first notifying the Shareholder in writing (a
"PROPOSAL NOTICE") of such Approved Acquisition Proposal and providing the
Shareholder (including for purposes of this Section 7, Affiliates of such
Shareholder) the opportunity (as hereinafter provided) to consummate an
Acquisition Proposal on terms substantially equivalent to and, if the
Approved Acquisition Proposal is a cash offer, at a cash price or, if the
Approved Acquisition Proposal includes non-cash consideration, at a price
(in either case, the "OFFER PRICE") equal to the sum of the amount of any
cash plus the fair market value of any other consideration offered in such
prospective Approved Acquisition Proposal, as the same may be amended or
modified from time to time (a "SHAREHOLDER PROPOSAL") The Proposal Notice
shall set forth the identity of the proposed purchaser and the material
terms of the proposed Approved Acquisition Proposal. In the event that the
proposed Approved Acquisition Proposal is amended or modified, Paracelsus
shall promptly notify the Shareholder in writing (an "AMENDED PROPOSAL
NOTICE"); provided that, if the Shareholder does not provide an Acceptance
Notice (as defined below) after receipt of a Proposal Notice or any
required Amended Proposal Notice, no Amended Proposal Notice will be
required unless the terms of such amendments or modifications are less
favorable in any
(Page 36 of 47 Pages)
<PAGE> 12
material respects to Paracelsus than those contained in the Proposal
Notice or any prior Amended Proposal Notices. Any required Amended
Proposal Notice shall set forth the identity of the proposed purchaser and
the material terms of the amended or modified proposed Approved
Acquisition Proposal.
(b) Response. Within 6 business days after receipt of the Proposal
Notice or any required Amended Proposal Notice, the Shareholder shall
notify (an "ACCEPTANCE NOTICE") the Board in writing of his good faith
intention to enter into negotiations regarding a Shareholder Proposal
pursuant to subsection (c) below. The failure to notify the Board in such
period shall constitute notice of the Shareholder's intention not to
pursue a Shareholder Proposal; If the Shareholder fails to deliver an
Acceptance Notice after the Proposal Notice or, if applicable, the Amended
Proposal Notice, (i) the Independent Directors and the Board shall have
the right to approve and recommend the Approved Acquisition Proposal to
the shareholders of Paracelsus and (ii) Paracelsus shall have the right to
enter into such agreements and take such actions in furtherance of
consummating, and to consummate, the Approved Acquisition Proposal at the
Offer Price at any time within one year from the date the Approved
Acquisition Proposal was first made to Paracelsus.
(c) NEGOTIATION. For a period of 15 days from the date of the last
Acceptance Notice, the Shareholder shall have the non-exclusive right to
negotiate the Shareholder Proposal in good faith with the Independent
Directors of the Board and their representatives. If at the end of that 15
day period, a majority of the Independent Directors shall in the good
faith exercise of their fiduciary duties determine that the competing
Approved Acquisition Proposal is superior to the Shareholder Proposal or
if the Shareholder Proposal is accepted and is then terminated in
accordance with its terms, (i) the Independent Directors and the Board
shall have the right to approve and recommend such competing Approved
Acquisition Proposal to the shareholders of Paracelsus and (ii) Paracelsus
shall have the right to enter into such agreements and take such actions
in furtherance of consummating, and to consummate, such competing Approved
Acquisition Proposal at the Offer Price at any time within one year from
the date the Acquisition Proposal was first made to Paracelsus.
(d) NON-CASH VALUATION. If the consideration offered by the
prospective purchaser or transferee or, if permitted, offered by the
Shareholder, includes non-cash consideration, Paracelsus and the
Shareholder shall in good faith seek to agree upon the value of such
non-cash consideration. If Paracelsus and the Shareholder fail to agree on
such value within 15 days following receipt by the Shareholder of the
Proposal Notice, then the Independent Directors and the Shareholder shall
appoint a nationally recognized investment banking firm mutually
acceptable to the Independent Directors and the Shareholder which shall
resolve the issues in dispute; provided, that if the Independent Directors
and the Shareholder cannot agree on an investment banking firm then each
shall appoint a nationally recognized investment banking firm which
together shall within five business days mutually agree on another
nationally recognized investment banking firm to which the items in
dispute shall be referred and which shall make a final and binding
determination within ten days. The value of any securities shall be the
fair market value of such securities and the value of any property other
than securities shall be the fair market value of such property. If a
determination under this paragraph (d) is required, any deadline for
acceptance provided for in this Section shall be postponed until the third
business day after the date of such determination. The Shareholder
(Page 37 of 47 Pages)
<PAGE> 13
and Paracelsus shall share equally in payment of all expenses of such
investment banking firms. All determinations made pursuant to this
paragraph (c) shall be final and binding on Paracelsus and the
Shareholder.
(e) LIMITATION. It is agreed and understood that the provisions of
this Section shall inure to the benefit of only Paracelsus and the
Shareholder and not to the benefit of any Investor other than the
Shareholder.
22. AGREEMENT TO SELL VOTING SECURITIES. Subject to the rights of the
Shareholder to propose, negotiate and consummate a Shareholder Proposal in
accordance with Section 7, the Shareholder agrees that the Shareholder will, and
will cause any Affiliates or Associates of the Shareholder to, sell in, tender
into and vote in favor of, as the case may be, any Approved Acquisition Proposal
and any Shareholder Proposal approved by the Independent Directors in accordance
with Section 7, all Voting Securities of Paracelsus Beneficially Owned by the
Shareholder or any Affiliate or Associate of the Shareholder. It is agreed and
understood that the provisions of this Section shall not be binding upon any
Investor other than the Shareholder so long as, if the Shareholder continues to
be subject to this Agreement, such Investor is not an Affiliate or Associate of
the Shareholder.
23. BOARD REPRESENTATION.
(a) THE BOARD; SHAREHOLDER DIRECTORS. The Board as of the Effective
Time shall number nine directors and may be increased by the Board
pursuant to the terms of this clause (a) and the by-laws of Paracelsus.
The Board shall be divided into three classes, with the number of
directors divided as equally as possible among those classes. The
Shareholder may request that Paracelsus include, and Paracelsus shall
include, as nominees for the Board slate recommended by the Board, up to
four persons designated by the Shareholder who are Eligible Persons (the
"SHAREHOLDER DIRECTORS"), one of whom shall be a Class I director with an
original term expiring in 1997, one of whom shall be a Class II director
with an original term expiring in 1998 and two of whom shall be Class III
directors with original terms expiring in 1999. If the Shareholder,
together with the Affiliates and Associates of the Shareholder, shall
cease to Beneficially Own (i) 35% of the Total Voting Power of Paracelsus,
each Investor agrees to vote, and to use its best efforts to cause its
respective shareholder Directors and Transferee Directors (as defined
below) to vote, immediately to increase the size of the Board to 10
directors, (ii) 32.5% of the Total Voting Power of Paracelsus, each
Investor agrees to vote, and to use its best efforts to cause its
respective Shareholder Directors and Transferee Directors to vote,
immediately to increase the size of the Board to 11 directors and (iii)
30% of the Total Voting Power of Paracelsus, each Investor agrees to vote,
and to use its best efforts to cause its respective Shareholder Directors
and Transferee Directors to vote, immediately to increase the size of the
Board to 12 directors; provided that each Investor hereby agrees that any
vacancies created by any such enlargement of the Board shall be in Class
III, Class II and Class I, respectively, and the nominees to such
vacancies shall be Independent Directors.
For the purposes hereof, an "ELIGIBLE PERSON" shall mean (x) the
Shareholder and (y) any other person (A) other than a person whose
election to the Board, in the written opinion of counsel for Paracelsus,
is reasonably likely to violate or be in conflict with, or result in any
material limitation on the ownership or operation of any business or
assets of Paracelsus or its Subsidiaries under, any statute, law,
ordinance, regulation, rule, judgment, decree or order of
(Page 38 of 47 Pages)
<PAGE> 14
any court or governmental or regulatory authority and (B) who has agreed
in writing with Paracelsus, subject to his or her fiduciary duties, to
comply with the provisions of this Section.
(b) COMMITTEES; QUORUM. Each committee of the board shall contain
such numbers of shareholder Directors or Transferee Directors so that the
number of Shareholder Directors and Transferee Directors, when taken
together, on each such committee shall be as nearly as possible
proportional to the total number of Shareholder Directors and Transferee
Directors on the Board; provided that the foregoing shall not apply to the
audit committee (which shall be comprised solely of Independent Directors)
or the compensation committee (which shall be comprised of one Independent
Director and one director who is not an employee of Paracelsus or its
Subsidiaries and, for so long as the Shareholder is entitled to nominate
Shareholder Directors pursuant to this Agreement, one Shareholder
Director). The quorum required for the transaction of business by the
Board shall include at least one Shareholder Director or one Transferee
Director and one director who is an Independent Director, or their
designees, attending in person or, if necessary, via teleconference call.
(c) RESIGNATION. Upon the Shareholder ceasing to Beneficially Own,
together with all Affiliates and Associates of the Shareholder at least
10% of the Total Voting Power of Paracelsus, Paracelsus may request that
all or any of the Shareholder Directors then on the Board resign as
directors of Paracelsus, and upon such request by Paracelsus, the
Shareholder shall use his best efforts to cause such Shareholder
Directors, except Dr. Manfred George Krukemeyer, who shall resign at the
next annual shareholder meeting for election to his class, to resign
immediately and relinquish all rights and privileges as a member of the
Board. Upon the shareholder ceasing to Beneficially Own, together with all
Affiliates and Associates of the Shareholder, at least 25% of the Total
Voting Power of Paracelsus, Paracelsus may request that all or any of the
shareholder Directors then on the Board resign as directors of Paracelsus
at the next annual shareholder meeting for election to their respective
class, and upon such request by Paracelsus, the Shareholder shall use his
best efforts to cause such Shareholder Directors to resign at such
respective times and thereupon relinquish all rights and privileges as a
member of the Board. Upon termination of this Agreement with respect to
any Permitted Transferee, Paracelsus may request that all of the
Transferee Directors then on the Board resign as directors of Paracelsus,
and upon such request by Paracelsus, the Permitted Transferee shall use
best efforts to cause such Transferee Directors to resign immediately and
relinquish all rights and privileges as a member of the Board.
(d) NON-INDEPENDENT AND NON-SHAREHOLDER DIRECTORS. Two members of
the Board may be directors who are not Independent Directors, Shareholder
Directors or Transferee Directors.
(e) INDEPENDENT DIRECTORS. Immediately following the Effective Time,
three members of the Board will be Independent Directors as set forth in
the Merger Agreement, and each of such Independent Directors shall be
elected to one of the three classes of the Board. Vacancies among the
Independent Directors occurring prior to the expiration of their
respective terms of office or created for Independent Directors as a
result of increasing the size of the Board as provided in clause (a) of
this Section shall be filled by a vote of 75% of the entire remaining
Board or, in the event that the Board cannot so agree, by the unanimous
agreement of the Independent Directors then in office. Independent
Directors to be nominated for
(Page 39 of 47 Pages)
<PAGE> 15
election at each annual meeting of Paracelsus will be nominated by a vote
of 75% of the entire Board or, in the event that the Board cannot so
agree, by the unanimous agreement of the Independent Directors then in
office.
(f) EFFORTS TO NOMINATE AND ELECT DIRECTORS. Paracelsus shall
nominate and shall use its best efforts to take and cause to be taken all
necessary action (corporate and other) to elect to the Board the
individuals required to be nominated for election as directors in
accordance with the terms hereof. The Investor shall nominate and shall
use its best efforts, and shall use best efforts to cause the Shareholder
Directors and Transferee Directors, as the case may be, and the Affiliates
and Associates of the Investor to use their respective reasonable efforts,
to take and cause to be taken all necessary action (corporate and other),
which efforts shall include the voting of all Voting Securities
Beneficially Owned by the Investor and the Affiliates and Associates of
the Investor and voting, subject to his or her fiduciary duties, as a
Shareholder Director or Transferee Director, to nominate and elect to the
Board the individuals nominated by the Board in accordance with any
nomination provisions hereof then in effect and the terms of any
employment contracts between Paracelsus and its executive officers so long
as such employment agreements remain in effect.
(g) TRANSFEREE DIRECTORS. If the Investor consummates a Transfer to
a permitted Transferee who shall become an Investor hereunder, such
Investor shall have the right, upon written notice to Paracelsus, to enter
into such agreements and understandings with such Permitted Transferee so
that such Investor relinquishes the right to nominate Shareholder
Directors or Transferee Directors, as the case may be, and such permitted
Transferee shall be entitled to nominate, in place of the relinquished
Shareholder Directors or Transferee Directors, as the case may be, such
number of persons for whom the Investor has in such written notice
relinquished the right to nominate who are Eligible Persons (such persons
from time to time being the "TRANSFEREE DIRECTORS"); provided, that (i)
the number of Shareholder Directors or Transferee Directors, as the case
may be, entitled to be nominated by such Investor under this Agreement
shall be reduced by the number of directors relinquished in favor of the
Permitted Transferee and (ii) in no event will all or any one or any
combination of the Investors, together with their respective Affiliates
and Associates, at any time have more than four representatives on the
Board, whether pursuant to the terms hereof, any right of director
appointment as set forth in any employment agreement between any such
representative and Paracelsus or otherwise.
24. ADDITIONAL AGREEMENTS.
(a) NO AMENDMENT OR WAIVER. The Investor shall not, and shall cause
Affiliates and Associates of such Investor not to, publicly request
Paracelsus or any of its agents or representatives, directly or
indirectly, to amend or waive any provision of this Agreement.
(b) RIGHTS PLAN. The Shareholder acknowledges that the Rights Plan
shall be adopted by Paracelsus.
(c) NO RELIEF OF LIABILITIES. No Transfer by the Investor of
Beneficial Ownership of any Voting Securities of Paracelsus shall relieve
the Investor of any liabilities or obligations to Paracelsus that arose or
accrued prior to the date of such Transfer.
(Page 40 of 47 Pages)
<PAGE> 16
(d) SECURITIES SUBJECT TO AGREEMENT; INEFFECTIVE TRANSFERS. All
Voting Securities of Paracelsus that are Beneficially Owned by the
Investor and the Affiliates and Associates of such Investor shall be
subject to this Agreement. No Transfer or acquisition of any Voting
Securities of Paracelsus in violation of any provision of this Agreement
shall be effective to pass any title to, or create any interest in favor
of, any Person, but the Investor, in attempting to effect or in permitting
or suffering such Transfer or acquisition (otherwise than inadvertently
and in good faith, without any knowledge thereof), shall be deemed to have
committed a material breach hereof.
(e) FURTHER ASSURANCES. Paracelsus and each Investor shall execute
and deliver such additional instruments and other documents and shall take
such further actions as may be necessary or appropriate to effectuate,
carry out and comply with all of the terms of this Agreement and the
transactions contemplated hereby.
(f) INVESTOR VOTING ON OTHER MATTERS. Unless such action is
recommended by the Board, the Investor shall not, and shall cause the
Affiliates and Associates of the Investor not to, vote any Voting
Securities of Paracelsus to amend or repeal the Restated Articles of
Incorporation of Paracelsus or the By-laws of Paracelsus or to call or
request any special meeting of Paracelsus' shareholders. The Investor
shall cause all Voting Securities of Paracelsus owned by the Shareholder
and all Affiliates and Associates of such Investor to be represented, in
person or by proxy, at all meetings of holders of Voting Securities of
which the Investor has actual notice so that such Voting Securities may be
counted for the purpose of determining the presence of a quorum at such
meetings.
25. LEGENDS. (a) The Investor agrees that all certificates representing
the Voting Securities subject to this Agreement shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
SHAREHOLDER AGREEMENT DATED AUGUST 16, 1996 (A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY) WHICH PROVIDES, AMONG OTHER THINGS, FOR
CERTAIN RESTRICTIONS ON TRANSFER THEREOF. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN
COMPLIANCE WITH SAID AGREEMENT SHALL BE VOID."
(b) Upon termination with respect to the Investor of this Agreement in
accordance with its terms and upon request by such Investor, Paracelsus shall
issue new certificates with the foregoing legend removed.
26. SPECIFIC PERFORMANCE. Each party hereto acknowledges that it will be
impossible to measure in money the damage to the other party if a party hereto
fails to comply with any of the obligations imposed by this Agreement, that
every such obligation is material and that, in the event of any such failure,
the other party will not have an adequate remedy at law or damages. Accordingly,
each party hereto agrees that injunctive relief or other equitable remedy, in
addition to remedies at law or damages, is the appropriate remedy for any such
failure and will not oppose the granting of such
(Page 41 of 47 Pages)
<PAGE> 17
relief on the basis that the other party has an adequate remedy at law. Each
party hereto agrees that it shall not seek, and agrees to waive any requirement
for, the securing or posting of a bond in connection with any other party's
seeking or obtaining such equitable relief.
27. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
and shall not be assignable (by operation of law or otherwise) without the
written consent of all other parties hereto; provided, that in the event of a
Surviving Company Merger where Paracelsus is not the surviving corporation, (x)
this Agreement shall be assigned to and shall inure to the benefit of and be
binding upon such surviving corporation and (y) any reference herein to
Paracelsus shall be deemed to be a reference to such surviving corporation;
provided, further, that the rights and obligations under this Agreement
(excluding Section 7) may be assigned by an Investor to a Permitted Transferee
in accordance with the terms of the Transfer to such Permitted Transferee, which
assignment shall not terminate any portion of this Agreement with respect to
such assignor except in accordance with Section 15(e).
28. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement shall supersede
all prior agreements, written or oral, among the parties hereto with respect to
the subject matter hereof and contains the entire agreement among the parties
with respect to the subject matter hereof. This Agreement may not be amended,
supplemented or modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by Paracelsus and approved by the
unanimous vote of the Independent Directors and, with respect to each Investor,
by such Investor. No waiver of any provisions hereof by any party shall be
deemed a waiver of any other provisions hereof by any such party, nor shall any
such waiver be deemed a continuing waiver of any provision hereof by such party.
29. MISCELLANEOUS.
(a) GOVERNING LAW AND VENUE. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH AND SUBJECT TO THE LAWS OF THE STATE OF INCORPORATION OF
PARACELSUS, WITHOUT REFERENCE TO CONFLICTS OF LAWS PRINCIPLES. The parties
hereby irrevocably submit to the jurisdiction of the courts of the state
of incorporation of Paracelsus and the Federal courts of the United States
of America located in the state of incorporation of Paracelsus solely in
respect of the interpretation and enforcement of the provisions of this
Agreement, and in respect of the transactions contemplated hereby, and
hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such
document, that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or
that the venue thereof may not be appropriate or that this Agreement or
any such document may not be enforced in or by such courts, and the
parties hereto irrevocably agree that all claims with respect to such
action or proceeding shall be heard and determined in such a State or
Federal court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter
of such dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in
Section 15 (b), shall be valid and sufficient service thereof.
(Page 42 of 47 Pages)
<PAGE> 18
(b) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given (i)
on the first business day following the date received, if delivered
personally or by telecopy (with telephonic confirmation of receipt by the
addressee), (ii) on the business day following timely deposit with an
overnight courier service, if sent by overnight courier specifying next
day delivery and (iii) on the first business day that is at least five
days following deposit in the mails, if sent by first class mail, to the
parties at the following addresses (or at such other address for a party
as shall be specified by like notice).
If to the Shareholder, to:
Dr. Manfred George Krukemeyer
Am Natruper Holz 69
D-49076 Osnabruck
Federal Republic of Germany
Facsimile: (011) 49-541-966-4006
with copies to:
R.J. Messenger
155 North Lake Avenue, Suite 1100
Pasadena, California 91101
Facsimile: (818) 578-6387
and to:
Dr. Mayer zu Losebeck
Sozietat Dr. H. Mertens
Hasemauer 9
49074 Osnabruck, Germany
Facsimile: (011) 49-541-331-1616
If to Paracelsus, to:
Paracelsus Healthcare Corporation
515 West Greens Road
Suite 800
Houston, Texas 77067
Facsimile: (713) 873-6686
Attention: Robert C. Joyner
Vice President
and General Counsel
(Page 43 of 47 Pages)
<PAGE> 19
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Suite 3400
Los Angeles, California 90071
Attention: Thomas C. Janson, Jr.
Facsimile: (213) 687-5600
(c) SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (ii) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
(d) COUNTERPARTS. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which shall together constitute the same
agreement.
(e) TERMINATION. With respect to a particular Investor (but not with
respect to any other Person who may at such time be bound by the terms hereof),
this Agreement shall terminate automatically without any action by any party
upon the earliest to occur of (i) the Investor, together with all Affiliates and
Associates of such Investor, ceasing to Beneficially Own at least 25% of the
Total Voting Power of Paracelsus (but Sections 9 (c), (d) and (f) shall not,
with respect to the Shareholder, terminate until the Shareholder, together with
all Affiliates and Associates of the Shareholder, ceases to Beneficially Own at
least 10% of the Total Voting Power of Paracelsus) and (ii) the Investor,
together with all Affiliates and Associates of such Investor, Beneficially
Owning at least 90% of the Total Voting Power of Paracelsus; provided that in
the event of a termination pursuant to clause (ii) of this subsection, the
Investor shall remain obligated to and shall promptly acquire all of the
remaining Voting Securities of Paracelsus (other than any such Voting Securities
properly exercising any appraisal or dissenters rights) at a price equal to or
in excess of any price paid by the Investor or Affiliates or Associates of such
Investor for such Voting Securities in the 90-day period preceding such
acquisition; provided, further, that in the event of a termination pursuant to
clause (i) of this subsection, the Investor shall remain subject to the
obligations of Sections 9(c), 9(d) and 9(f).
(f) HEADINGS. All Section headings and the recitals herein are for
convenience of reference only and are not part of this Agreement, and no
construction or reference shall be derived therefrom.
(g) OTHER AGREEMENTS. The parties hereto agree that there is not and has
not been any other agreement, arrangement or understanding between the parties
hereto with respect to the matters set forth herein.
(Page 44 of 47 Pages)
<PAGE> 20
(h) THIRD PARTY BENEFICIARIES. NOTHING IN THIS AGREEMENT, EXPRESS OR
IMPLIED, IS INTENDED TO CONFER UPON ANY THIRD PARTY (INCLUDING ANY HOLDER OF
VOTING SECURITIES OF PARACELSUS) ANY RIGHTS OR REMEDIES OF ANY NATURE WHATSOEVER
UNDER OR BY REASON OF THIS AGREEMENT; PROVIDED, THAT THE FOREGOING SHALL NOT IN
ANY WAY RESTRICT OR LIMIT ANY HOLDER OF VOTING SECURITIES OF PARACELSUS FROM
BRINGING A SHAREHOLDER DERIVATIVE ACTION TO SEEK OR COMPEL THE DIRECTORS OF
PARACELSUS TO CAUSE PARACELSUS TO ENFORCE ANY OBLIGATIONS OF AN INVESTOR
HEREUNDER OR TO EXERCISE ANY RIGHTS OR REMEDIES OF PARACELSUS HEREUNDER.
(Page 45 of 47 Pages)
<PAGE> 21
IN WITNESS WHEREOF, Paracelsus and each Investor have executed and
delivered this Agreement, or a counterpart hereof, as of the date first written
above or, where applicable, across from the Investor's signature on such
counterpart hereof.
PARACELSUS HEALTHCARE CORPORATION
By: /s/ Robert C. Joyner
--------------------------------------
Name: Robert C. Joyner
Title: Vice President and Secretary
PARK HOSPITAL GmbH
By: /s/ Dr. Manfred Georg Krukemeyer
--------------------------------------
Name: Dr. Manfred Georg Krukemeyer
Title: Chairman
As Guarantor of the obligations
of the Shareholder:
/s/ Dr. Manfred Georg Krukemeyer
- ---------------------------------
Dr. Manfred Georg Krukemeyer
(Page 46 of 47 Pages)
<PAGE> 1
EXHIBIT D
JOINT FILING AGREEMENT REQUIRED UNDER RULE 13d-1(f)(1)
This Joint Filing Agreement, dated as of December 15, 1997, is executed
and delivered by Park-Hospital GmbH, a German limited liability company,
Paracelsus-Kliniken-Deutschland GmbH, a German limited liability company, Dr.
Heiner Meyer zu Losebeck and Mr. Peter Frommhold.
This agreement sets forth our mutual understanding and agreement that the
Statement on Schedule 13D under the Securities Exchange Act of 1934 for the
common stock of Paracelsus Healthcare Corporation is filed on behalf of each
person and entity set forth below and that this agreement may be attached as an
exhibit to such statement. The signatures of each of the parties hereto
indicates the acceptance and agreement of each such party hereto to the terms
set forth herein.
This Joint Filing Agreement is executed as of the day and year first above
written.
PARK-HOSPITAL GmbH
By: /s/ Armin Sulberg
--------------------------------
Armin Sulberg
PARACELSUS-KLINIKEN-DEUTSCHLAND GmbH
By: /s/ Armin Sulberg
--------------------------------
Armin Sulberg
/s/ Dr. Heiner Meyer zu Losebeck
-------------------------------------------
Dr. Heiner Meyer zu Losebeck
/s/ Peter Frommhold
-------------------------------------------
Peter Frommhold
(Page 47 of 47 Pages)
