-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NY5PkyxoYUcnf9q8jqPFcVkbnXRcIcNeWG4iTcJnLz36Nr+vGjbl1DOMZoETGPm+ Slms9Lod6MhFwfN+gZhEBA== 0000904454-06-000534.txt : 20060712 0000904454-06-000534.hdr.sgml : 20060712 20060712163256 ACCESSION NUMBER: 0000904454-06-000534 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20060712 DATE AS OF CHANGE: 20060712 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ENCORE MEDICAL CORP CENTRAL INDEX KEY: 0000944763 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 650572565 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-50431 FILM NUMBER: 06958688 BUSINESS ADDRESS: STREET 1: 9800 METRIC BOULEVARD CITY: AUSTIN STATE: TX ZIP: 78758 BUSINESS PHONE: 5128329500 MAIL ADDRESS: STREET 1: 9800 METRIC BOULEVARD CITY: AUSTIN STATE: TX ZIP: 78758 FORMER COMPANY: FORMER CONFORMED NAME: HEALTHCARE ACQUISITION CORP DATE OF NAME CHANGE: 19950531 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GALEN PARTNERS III L P CENTRAL INDEX KEY: 0001034486 IRS NUMBER: 133930452 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 610 FIFTH AVE STREET 2: 5TH FL CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2122184990 MAIL ADDRESS: STREET 1: 610 FIFTH AVE STREET 2: 5TH FL CITY: NEW YORK STATE: NY ZIP: 10020 SC 13D/A 1 s13da_07122006encore.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. 2)(1) Encore Medical Corporation -------------------------------------------------------------- (Name of Issuer) Common Stock, $.001 par value -------------------------------------------------------------- (Title of Class of Securities) 29256E 10 9 -------------------------------------------------------------- (CUSIP Number) Bruce F. Wesson Merrill A. Ulmer, Esq. Galen Associates Ropes & Gray LLP 610 Fifth Avenue 45 Rockefeller Plaza New York, New York 10020 New York, New York 10111 Tel. (212) 218-4990 Tel. (212) 841-5700 --------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 30, 2006 ------------------------------------------ (Date of Event Which Requires Filing of This Statement) 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(e), 13d-1(f) or 13d-1(g), check the following box [ ]. - ------------------------- (1)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 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act. CUSIP No. 29256E 10 9 Page 2 of 8 Pages 1) Name of Reporting Person: Galen Partners III, L.P. and I.R.S. Identification No. of Above Person, if an Entity (Voluntary): - ------------------------------------------------------ 2) Check the Appropriate Box (a) [X] if a Member of a Group (b) [ ] - ------------------------------------------------------ 3) SEC Use Only - ------------------------------------------------------ 4) Source of Funds Not Applicable - ------------------------------------------------------ 5) Check if Disclosure of Legal Proceedings Is Not Applicable Required Pursuant to Items 2(d) or 2(e) - ------------------------------------------------------ 6) Citizenship or Place of Organization Delaware - ------------------------------------------------------ Number of 7) Sole Voting 9,216,431 shares of Shares Beneficially Power Common Stock Owned by Reporting Person: --------------------------------------------- 8) Shared Voting Power -0- --------------------------------------------- 9) Sole Disposi- 9,216,431 shares of tive Power Common Stock --------------------------------------------- 10) Shared Dis- positive Power -0- --------------------------------------------- 11) Aggregate Amount Beneficially 9,216,431 shares of Owned by Each Reporting Person Common Stock - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares - -------------------------------------------------------------------------------- 13) Percent of Class Represented by 13.0% Amount in Row (11) - -------------------------------------------------------------------------------- 14) Type of Reporting Person PN CUSIP No. 29256E 10 9 Page 3 of 8 Pages 1) Name of Reporting Person: Galen Partners International III, L.P. and I.R.S. Identification No. of Above Person, if an Entity (Voluntary): - ------------------------------------------------------ 2) Check the Appropriate Box (a) [X] if a Member of a Group (b) [ ] - ------------------------------------------------------ 3) SEC Use Only - ------------------------------------------------------ 4) Source of Funds Not Applicable - ------------------------------------------------------ 5) Check if Disclosure of Legal Proceedings Is Not Applicable Required Pursuant to Items 2(d) or 2(e) - ------------------------------------------------------ 6) Citizenship or Place of Organization Delaware - ------------------------------------------------------ Number of 7) Sole Voting 834,204 shares of Shares Beneficially Power Common Stock Owned by Reporting Person: --------------------------------------------- 8) Shared Voting Power -0- --------------------------------------------- 9) Sole Disposi- 834,204 shares of tive Power Common Stock --------------------------------------------- 10) Shared Dis- positive Power -0- --------------------------------------------- 11) Aggregate Amount Beneficially 834,204 shares of Owned by Each Reporting Person Common Stock - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares - -------------------------------------------------------------------------------- 13) Percent of Class Represented by 1.0% Amount in Row (11) - -------------------------------------------------------------------------------- 14) Type of Reporting Person PN CUSIP No. 29256E 10 9 Page 4 of 8 Pages 1) Name of Reporting Person: Galen Employee Fund III, L.P. and I.R.S. Identification No. of Above Person, if an Entity (Voluntary): - ------------------------------------------------------ 2) Check the Appropriate Box (a) [X] if a Member of a Group (b) [ ] - ------------------------------------------------------ 3) SEC Use Only - ------------------------------------------------------ 4) Source of Funds Not Applicable - ------------------------------------------------------ 5) Check if Disclosure of Legal Proceedings Is Not Applicable Required Pursuant to Items 2(d) or 2(e) - ------------------------------------------------------ 6) Citizenship or Place of Organization Delaware - ------------------------------------------------------ Number of 7) Sole Voting 33,089 shares of Shares Beneficially Power Common Stock Owned by Reporting Person: --------------------------------------------- 8) Shared Voting Power -0- --------------------------------------------- 9) Sole Disposi- 33,089 shares of tive Power Common Stock --------------------------------------------- 10) Shared Dis- positive Power -0- --------------------------------------------- 11) Aggregate Amount Beneficially 33,089 shares of Owned by Each Reporting Person Common Stock - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares - -------------------------------------------------------------------------------- 13) Percent of Class Represented by less than 0.1% Amount in Row (11) - -------------------------------------------------------------------------------- 14) Type of Reporting Person PN CUSIP No. 29256E 10 9 Page 5 of 8 Pages 1) Name of Reporting Person: Galen Advisors, LLC and I.R.S. Identification No. of Above Person, if an Entity (Voluntary): - ------------------------------------------------------ 2) Check the Appropriate Box (a) [X] if a Member of a Group (b) [ ] - ------------------------------------------------------ 3) SEC Use Only - ------------------------------------------------------ 4) Source of Funds Not Applicable - ------------------------------------------------------ 5) Check if Disclosure of Legal Proceedings Is Not Applicable Required Pursuant to Items 2(d) or 2(e) - ------------------------------------------------------ 6) Citizenship or Place of Organization Delaware - ------------------------------------------------------ Number of 7) Sole Voting -0- Shares Beneficially Power Owned by Reporting Person: --------------------------------------------- 8) Shared Voting Power -0- --------------------------------------------- 9) Sole Disposi- -0- tive Power --------------------------------------------- 10) Shared Dis- positive Power -0- --------------------------------------------- 11) Aggregate Amount Beneficially -0- Owned by Each Reporting Person - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares - -------------------------------------------------------------------------------- 13) Percent of Class Represented by 0 Amount in Row (11) - -------------------------------------------------------------------------------- 14) Type of Reporting Person CO CUSIP No. 29256E 10 9 Page 6 of 8 Pages Amendment No. 2 to Schedule 13D ------------------------------- Reference is hereby made to the statement on Schedule 13D filed with the Securities and Exchange Commission (the "Commission") on June 20, 2001 and Amendment No. 1 thereto filed on January 13, 2004 (as so amended, the "Schedule 13D"). Terms defined in the Schedule 13D are used herein as so defined. The following items of the Schedule 13D are hereby amended as follows: Item 5. Interest in Securities of the Issuer ------------------------------------ Item 5 is hereby amended and restated to read in its entirety as follows: The following information is based on a total of 71,004,134 shares of Common Stock outstanding as of May 1, 2006, as reported in the Issuer's Report on Form 10-Q filed with the Commission on May 10, 2006. (a) Galen ----- Galen owns 9,216,431 shares of Common Stock, or approximately 13% of the Common Stock outstanding. Claudius, as the general partner of Galen, may be deemed to beneficially own the securities owned by Galen. Galen Intl ---------- Galen Intl owns 834,204 shares of Common Stock, or approximately 1.0% of the Common Stock outstanding. Claudius, as the general partner of Galen Intl, may be deemed to beneficially own the securities owned by Galen Intl. GEF --- GEF owns 38,089 shares of Common Stock, or less than 0.1% of the Common Stock outstanding. Wesson Enterprises, as the general partner of GEF, may be deemed to beneficially own the securities owned by GEF. Other Related Persons --------------------- (i) Bruce F. Wesson directly beneficially owns 175,832 shares of Common Stock (including 60,000 shares issuable upon the exercise of presently- exercisable stock options) and indirectly beneficially owns (through a trust for the benefit of his children)25,500 shares, or in the aggregate less than 0.1% of the Common Stock outstanding. (ii) Zubeen Shroff directly beneficially owns 78,466 shares of Common Stock (including 60,000 shares issuable upon the exercise of presently-exercisable stock options), or less than 0.1% of the Common Stock outstanding. (iii) L. John Wilkerson directly beneficially owns 12,698 shares of Common Stock, or less than 0.1% of the Common Stock outstanding. (iv) David Jahns directly beneficially owns 8,466 shares of Common Stock, or less than 0.1% of the Common Stock outstanding. CUSIP No. 29256E 10 9 Page 7 of 8 Pages (v) William R. Grant directly beneficially owns 12,698 shares of Common Stock, or less than 0.1% of the Common Stock outstanding. (vi) Srini Conjeevaram directly beneficially owns 8,466 shares of Common Stock, or less than 0.1% of the Common Stock outstanding. (b) The members of Claudius may be deemed to share the power to vote or direct the voting of and to dispose or direct the disposition of the securities of the Issuer owned by Galen and Galen Intl. Bruce F. Wesson, the President and sole director of Wesson Enterprises, may be deemed to have sole power to vote or direct the voting of and to dispose or direct the disposition of, the securities of the Issuer held by GEF. The managing members of GA may be deemed to share the power to vote or direct the voting of and to dispose or direct the disposition of the securities of the Issuer held by GA. Each of the members of Claudius, Mr. Wesson and the managing members of GA disclaims beneficial ownership of all securities other than those he owns directly or by virtue of his indirect interest in the securities owned by Galen, Galen Intl, GEF and/or GA. (c) Not applicable. (d) Except as described in this statement, no person has the power to direct the receipt of dividends on or the proceeds of sales of the shares of Common Stock owned by the Reporting Persons. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. --------------------------------------------------------------------- Item 6 is hereby amended by adding the following thereto: On June 30, 2006 the Issuer entered into an Agreement and Plan of Merger (the "Merger Agreement") with Grand Slam Holdings, LLC, a newly formed Delaware limited liability company ("Parent") and Grand Slam Acquisition Corp., a newly formed Delaware corporation and wholly owned subsidiary of Parent ("Merger Sub"), in a going private transaction pursuant to which Merger Sub will merge with and into the Issuer (the "Merger"), with the Issuer continuing as the surviving corporation and a wholly owned subsidiary of Parent. Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding share of Common Stock, other than any shares owned by the Issuer, Parent, Merger Sub, or any wholly owned subsidiary of the Issuer, or by any stockholders who are entitled to and who properly exercise appraisal rights under Delaware law, will be canceled and will be converted automatically into the right to receive $6.55 in cash per share, without interest. The Merger Agreement is incorporated herein as Exhibit 1 by reference to Exhibit 2.1 to the Issuer's Current Report on Form 8-K filed with the Commission on July 3, 2006, and any description thereof is qualified in its entirety by reference thereto. As a condition to the willingness of Parent and Merger Sub to enter into the Merger Agreement, and as an inducement and in consideration therefor, Parent and Merger Sub required that Galen, Galen Intl and GEF (each, a "Stockholder" and together, the "Stockholders") enter into a Voting Agreement dated as of June 30, 2006 (the "Voting Agreement") with Parent and Merger Sub. Pursuant to the Voting Agreement, the Stockholders (i) granted Parent an irrevocable proxy to vote their collective 10,088,724 shares of Common Stock and any subsequently acquired shares of Common Stock in favor of adoption of the Merger Agreement and approval of the Merger and (ii) agreed to certain restrictions on their ability to transfer any such shares. The Voting Agreement is attached hereto as Exhibit 2, and any description thereof is qualified in its entirety by reference thereto. Item 7. Material to be filed as Exhibits. -------------------------------- Exhibit 1 - Merger Agreement (incorporated by reference to Exhibit 2.1 to the Issuer's Current Report on Form 8-K filed with the Commission on July 3, 2006) Exhibit 2 - Voting Agreement (appears at Page 9) CUSIP No. 29256E 10 9 Page 8 of 8 Pages Signature --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. GALEN PARTNERS III, L.P. By: Claudius, LLC, General Partner By: /s/ Bruce F. Wesson -------------------- Member GALEN PARTNERS INTERNATIONAL III, L.P. By: Claudius, LLC, General Partner By: /s/ Bruce F. Wesson -------------------- Member GALEN EMPLOYEE FUND III, L.P. By: Wesson Enterprises, Inc., General Partner By: /s/ Bruce F. Wesson -------------------- President GALEN ADVISORS, LLC By: /s/ Bruce F. Wesson -------------------- Managing Member Dated: July 12, 2006 EX-99 2 exhibit-2.txt GALEN VOTING AGREEMENT GALEN VOTING AGREEMENT This VOTING AGREEMENT (this "Agreement") is entered into as of June 30, 2006, by and among Grand Slam Holdings, LLC, a Delaware limited liability company ("Parent"), Grand Slam Acquisition Corp., a Delaware corporation ("Merger Sub"), Galen Partners III, L.P., a Delaware limited partnership ("GP III"), Galen Partners International III, L.P., a Delaware limited partnership ("GP Intl III"), and Galen Employee Fund III, L.P., a Delaware limited partnership ("GEF III") (each of GP III, GP Intl III and GEF III, a "Stockholder" and, together, the "Stockholders"). W I T N E S S E T H: WHEREAS, as of the date of this Agreement, the Stockholders beneficially own, in the aggregate, 10,088,724 shares of Common Stock, par value $0.001 per share (the "Common Stock"), of Encore Medical Corporation, a Delaware corporation (the "Company"); WHEREAS, concurrently herewith, the Company, Parent and Merger Sub are entering into an Agreement and Plan of Merger, dated as of this date, as the same may be amended (the "Merger Agreement"), pursuant to which Merger Sub will merge with and into the Company and the Company will continue its existence as the surviving corporation (the "Merger"), and each share of Common Stock will be converted into the right to receive cash in accordance with the terms of the Merger Agreement; and WHEREAS, as a condition to the willingness of Parent and Merger Sub to enter into the Merger Agreement, and as an inducement and in consideration therefor, Parent and Merger Sub have required that each of the Stockholders agree, and each of the Stockholders has agreed, to enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual premises, representations, warranties, covenants and agreements contained in this Agreement, the parties, intending to be legally bound, hereby agree as follows: ARTICLE I DEFINITIONS ----------- SECTION 1.1 Defined Terms. For purposes of this Agreement, terms used in this Agreement that are defined in the Merger Agreement but not in this Agreement shall have the respective meanings ascribed to them in the Merger Agreement. SECTION 1.2 Other Definitions. For purposes of this Agreement: (a) "New Shares" means any shares of capital stock of the Company (other than Owned Shares) over which either Stockholder acquires beneficial ownership at any time from and after the date of this Agreement through the termination of the Voting Period. (b) "Owned Shares" means all of the shares of Common Stock beneficially owned by the Stockholders as of the date of this Agreement. The Owned Shares consist of: (i) 9,216,431 shares of Common Stock held by GP III, (ii) 834,204 shares of Common Stock held by GP Intl III and 38,089 shares of Common Stock held by GEF III. In the event of a stock dividend or distribution, or any change in the Common Stock by reason of any stock dividend or distribution, split-up, recapitalization, combination, exchange of shares or the like, the "Owned Shares" shall be deemed to refer to and include the Owned Shares (as defined in the first sentence of this paragraph) as well as all stock dividends and distributions and any securities into which or for which any or all of those Owned Shares may be changed or exchanged or which are received in the transaction. (c) Representative" means, with respect to any particular person, any director, officer, employee, accountant, consultant, legal counsel, investment banker, advisor, agent or other representatives of that person. (d) "Transfer" means sell, transfer, tender, pledge, encumber, hypothecate, assign or otherwise dispose, by operation of law or otherwise. (e) "Voting Period" means the period from and including the date of this Agreement through and including the earlier to occur of (i) the Effective Time and (ii) the termination of the Merger Agreement by Parent or Merger Sub or the Company pursuant to Section 8.1 of the Merger Agreement. ARTICLE II VOTING AGREEMENT AND IRREVOCABLE PROXY -------------------------------------- SECTION 2.1 Agreement to Vote. (a) Each of the Stockholders hereby agrees that, during the Voting Period, such Stockholder shall vote or execute consents, as applicable, with respect to the Owned Shares and any New Shares beneficially owned by it as of the applicable record date (or cause to be voted or a consent to be executed with respect to the Owned Shares and any New Shares beneficially owned by it as of the applicable record date) in favor of the approval of the Merger Agreement and the transactions contemplated by the Merger Agreement, at any meeting (or any adjournment or postponement thereof) of, or in connection with any proposed action by written consent of, the holders of any class or classes of capital stock of the Company at or in connection with which any of such holders vote or execute consents with respect to any of the foregoing matters. (b) Each of the Stockholders hereby agrees that, during the Voting Period, such Stockholder shall vote or execute consents, as applicable, with respect to the Owned Shares and any New Shares beneficially owned by it as of the applicable record date (or cause to be voted or a consent to be executed with respect to the Owned Shares and any New Shares beneficially owned by it as of the applicable record date) against each of the matters set forth in clauses (i), (ii) or (iii) below at any meeting (or any adjournment or postponement thereof) of, or in connection with any proposed action by written consent of, the holders of any class or classes of capital stock of the Company at or in connection with which any of such holders vote or execute consents with respect to any of the following matters: (i) any action, proposal, transaction or agreement involving the Company or any of its subsidiaries that would reasonably be expected to, in any material respect, prevent, impede, frustrate, interfere with, delay, postpone or adversely affect the Merger or the other transactions contemplated by the Merger Agreement; or (ii) any Acquisition Proposal, other than an Acquisition Proposal made by Parent. (c) Any vote required to be cast or consent required to be executed pursuant to this Section 2.1 shall be cast or executed in accordance with the applicable procedures relating thereto so as to ensure that it is duly counted for purposes of determining that a quorum is present (if applicable) and for purposes of recording the results of that vote or consent (d) Except as set forth in clauses (a) and (b) of this Section 2.1, no Stockholder shall be restricted from voting in favor of, against or abstaining with respect to any matter presented to the stockholders of the Company. In addition, nothing in this Agreement shall give Parent the right to vote any Owned Shares at any meeting of the stockholders other than as provided in this Section 2.1. SECTION 2.2 Grant of Irrevocable Proxy. Each of the Stockholders hereby irrevocably appoints Parent as such Stockholder's proxy and attorney-in-fact, with full power of substitution and resubstitution, to vote or execute consents during the Voting Period, with respect to the Owned Shares and any New Shares beneficially owned by such Stockholder, solely in respect of the matters described in, and in accordance with, Section 2.1. This proxy is given to secure the performance of the duties of such Stockholder under this Agreement. None of the Stockholders shall directly or indirectly grant any person any proxy (revocable or irrevocable), power of attorney or other authorization with respect to any of the Owned Shares or New Shares that is inconsistent with Sections 2.1 and 2.2. SECTION 2.3 Nature of Irrevocable Proxy. The proxy and power of attorney granted pursuant to Section 2.2 by each of the Stockholders shall be irrevocable during the Voting Period, shall be deemed to be coupled with an interest sufficient in law to support an irrevocable proxy and shall revoke any and all prior proxies granted by such Stockholder, and such Stockholder acknowledges that the proxy constitutes an inducement for Parent and Merger Sub to enter into the Merger Agreement. The power of attorney granted by each of the Stockholders is a durable power of attorney and shall survive the bankruptcy, death or incapacity of such Stockholder. The proxy and power of attorney granted hereunder shall terminate automatically at the expiration of the Voting Period. ARTICLE III COVENANTS --------- SECTION 3.1 Transfer Restrictions. Each of the Stockholders agrees that such Stockholder shall not, and shall not permit any person, directly or indirectly, to: (a) Transfer any or all of the Owned Shares or New Shares beneficially owned by such Stockholder; provided that the foregoing shall not prevent the conversion of such Owned Shares and New Shares into the right to receive Merger Consideration pursuant to the Merger in accordance with the terms of the Merger Agreement; or (b) deposit any Owned Shares or New Shares beneficially owned by such Stockholder in a voting trust or subject any of such Owned Shares or New Shares beneficially owned by such Stockholder to any arrangement or agreement with any person (other than Parent) with respect to the voting or the execution of consents with respect to any such Owned Shares or New Shares that would reasonably be expected to restrict such Stockholder's ability to comply with and perform such Stockholder's covenants and obligations under this Agreement. SECTION 3.2 No Shop Obligations of the Stockholder. Each Stockholder covenants and agrees with Parent that, during the Voting Period, such Stockholder shall not and shall not authorize any of such Stockholder's Representatives to, directly or indirectly, (i) initiate, solicit, encourage, or knowingly facilitate any inquiry, proposal or offer, or the making, submission or reaffirmation of any inquiry, proposal or offer (including any proposal or offer to the Company's stockholders), that constitutes or would reasonably be expected to lead to any Acquisition Proposal, or (ii) engage in any discussions or negotiations concerning an Acquisition Proposal. Notwithstanding the foregoing, nothing in this Agreement shall limit, restrict or otherwise affect the actions taken in compliance with the Merger Agreement by any Affiliate of any Stockholder in his capacity as a member of the Board of Directors of the Company or any committee thereof. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS -------------------------------------------------- Each of the Stockholders hereby, severally but not jointly, represents and warrants to Parent and Merger Sub as follows: SECTION 4.1 Authorization. Such Stockholder has all legal capacity, power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly executed and delivered by such Stockholder and constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms. SECTION 4.2 Ownership of Shares. Such Stockholder is the sole beneficial owner of all of such Stockholder's Owned Shares and has, or will have at the time of any vote with respect to the matters contemplated by Article II, the sole power to vote (or cause to be voted or consents to be executed) and to dispose of (or cause to be disposed of) all of such Owned Shares. Such Stockholder does not own or hold any right to acquire any additional shares of any class of capital stock of the Company or other securities of the Company or any interest therein or any voting rights with respect to any securities of the Company. None of such Stockholder's Owned Shares are subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding to which such Stockholder is a party restricting or otherwise relating to the voting or Transfer of such Stockholder's Owned Shares. Such Stockholder has good and valid title to such Stockholder's Owned Shares, free and clear of any and all Liens. SECTION 4.3 No Conflicts. Except (a) for a filing of an amendment to a Schedule 13D or Schedule 13G, and (b) for a filing of a Form 4 or Form 5 as required by the Exchange Act, (i) no filing with any Governmental Entity, and no authorization, consent or approval of any other person is necessary for the execution of this Agreement by such Stockholder or the performance by such Stockholder of its obligations hereunder and (ii) none of the execution and delivery of this Agreement by such Stockholder or the performance by such Stockholder of its obligations hereunder shall (A) result in, give rise to or constitute a violation or breach of or a default (or any event which with notice or lapse of time or both would become a violation, breach or default) under any of the terms of any agreement or other instrument to which such Stockholder is a party or by which such Stockholder or any of such Stockholder's Owned Shares is bound, or (B) violate any applicable law, rule, regulation, order, judgment, or decree applicable to such Stockholder, except for any of the foregoing as could not reasonably be expected to impair such Stockholder's ability to perform its obligations under this Agreement in any material respect. SECTION 4.4 Reliance by Parent and Merger Sub. Such Stockholder understands and acknowledges that Parent and Merger Sub are entering into the Merger Agreement in reliance upon the execution and delivery of this Agreement by such Stockholder and the agreement by such Stockholder herein to perform such Stockholder's obligations hereunder and comply with the terms hereof. ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB ------------------------------------------------------- Each of Parent and Merger Sub hereby represent and warrant to each of the Stockholders that (i) it has all legal capacity, power and authority to execute and deliver this Agreement and to perform its obligations hereunder and (ii) this Agreement has been duly executed and delivered by it and constitutes a legal, valid and binding obligation of the party, enforceable against it in accordance with the terms of this Agreement. ARTICLE VI TERMINATION ----------- This Agreement shall terminate upon the expiration of the Voting Period; provided that Sections 7.6 through 7.11 and Sections 7.13 through 7.15 shall survive termination of this Agreement. Notwithstanding the foregoing, termination of this Agreement shall not prevent any party from seeking any remedies (at law or in equity) against any other party for that party's breach of any of the terms of this Agreement prior to the date of termination. ARTICLE VII MISCELLANEOUS ------------- SECTION 7.1 Appraisal Rights. Each of the Stockholders hereby waives any rights of appraisal or rights to dissent from the Merger or the approval of the Merger Agreement that such Stockholder may have under applicable law and shall not permit any such rights of appraisal or rights of dissent to be exercised with respect to any Owned Shares or any New Shares. SECTION 7.2 Non-Survival of Representations and Warranties. The respective representations and warranties of the Stockholders, Parent and Merger Sub shall not survive the closing of the transactions contemplated hereby and by the Merger Agreement. SECTION 7.3 Further Actions. Each of the Stockholders agrees that such Stockholder shall take any further action and execute any other documents or instruments as may be necessary to effectuate the intent of this Agreement. SECTION 7.4 Fees and Expenses. Except as otherwise expressly set forth in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring the cost or expense whether or not the Merger is consummated. SECTION 7.5 Amendments, Waivers, etc. This Agreement may be amended by the parties at any time. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. Any party hereto may (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) subject to the requirements of applicable law, waive compliance with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby. The failure of any party to assert any rights or remedies shall not constitute a waiver of such rights or remedies. SECTION 7.6 Notices. All notices, requests, claims, instructions, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile (provided that the facsimile is promptly confirmed by telephone confirmation thereof) or by overnight courier to the respective parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) If to the Stockholders, addressed to: c/o Galen Partners III, L.P. 610 Fifth Avenue New York, New York 10020 Attention: Zubeen Shroff Telecopy: (212) 218-4999 with a copy (which shall not constitute notice) to: Ropes & Gray LLP 45 Rockefeller Plaza New York, New York 10111 Attention: Merrill A. Ulmer Telecopy: (212) 841-5725 (b) if to Parent or Merger Sub, addressed to: Blackstone Capital Partners V L.P. c/o The Blackstone Group 345 Park Avenue New York, New York 10154 Attention: Chinh E. Chu Telecopy: 212-583-5712 with a copy to (which shall not constitute notice): Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017 Attention: William R. Dougherty, Esq. Telecopy: 212-455-2502 or to that other address as any party shall specify by written notice so given, and notice shall be deemed to have been delivered as of the date so telecommunicated or personally delivered. SECTION 7.7 Headings; Titles. Headings and titles of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive or interpretative effect whatsoever. SECTION 7.8 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 7.9 Entire Agreement. This Agreement (together with the Merger Agreement, to the extent referred to in this Agreement) and any documents delivered by the parties in connection herewith constitute the entire agreement among the parties with respect to the subject matter of this Agreement and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. SECTION 7.10 Assignment; Binding Effect; No Third Party Beneficiaries; Further Action. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties (whether by operation of law or otherwise) without the prior written consent of the other parties, except that each of Parent and/or Merger Sub may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to any Affiliate of Blackstone Capital Partners V. L.P. This Agreement shall be binding upon and shall inure to the benefit of Parent and Merger Sub and their respective successors and assigns and shall be binding upon the Stockholders and their respective heirs, executors and administrators. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person (other than, in the case of Parent and Merger Sub, their respective successors and assigns and, in the case of the Stockholders, their respective heirs, executors and administrators) any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. SECTION 7.11 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of the United States District Court for the Southern District of New York or any court of the State of New York located in such district in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than such courts sitting in the State of New York. SECTION 7.12 Enforcement of Agreement; Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that Parent and Merger Sub shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the state courts of the State of New York sitting in the City of New York or any court of the United States located in the City of New York, this being in addition to any other remedy to which such party is entitled at law or in equity. The parties agree that the Stockholders shall not be entitled to an injunction or injunctions to prevent any breach of this Agreement by any of Parent or Merger Sub or to enforce specifically any term or any provision of this Agreement. SECTION 7.13 Counterparts; Facsimiles. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. This Agreement or any counterpart may be executed and delivered by facsimile copies, each of which shall be deemed an original. SECTION 7.14 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. SECTION 7.15 Merger Agreement. The obligations of the Stockholders hereunder are subject to the absence of any change (by amendment or waiver) to the Merger Agreement which is materially adverse, directly or indirectly, to the Stockholders, including but not limited to: (i) any change which decreases the Merger Consideration; or (ii) any change to the form of Merger Consideration (other than the addition of consideration payable in any form). [Signature page follows] IN WITNESS WHEREOF, Parent, Merger Sub and the Stockholders have caused this Agreement to be duly executed as of the day and year first above written. GRAND SLAM HOLDINGS, LLC By: ___________________________ Name: Title: GRAND SLAM ACQUISITION CORP. By: ___________________________ Name: Title: GALEN PARTNERS III, L.P. By: Claudius, L.L.C., its General Partner By: ___________________________ Name: Bruce F. Wesson Title: Member GALEN PARTNERS INTERNATIONAL III, L.P. By: Claudius, L.L.C., its General Partner By: ___________________________ Name: Bruce F. Wesson Title: Member GALEN EMPLOYEE FUND III, L.P. By: Wesson Enterprises, Inc., its General Partner By: ___________________________ Name: Bruce F. Wesson Title: President -----END PRIVACY-ENHANCED MESSAGE-----