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EXHIBIT 1
VOTING AGREEMENT
This VOTING AGREEMENT (this "Agreement") is entered into as of
February 17, 1997 (the "Effective Date") by and among Superior National
Insurance Group, Inc., a California corporation ("Superior"), and the holders
listed on the signature pages hereof (each, a "Security Holder" and
collectively, the "Security Holders") of (1) shares of common stock, par value
$.01 per share (the "Pac Rim Shares"), and (2) Series A Convertible Debentures
(the "Pac Rim Debentures") of Pac Rim Holding Corporation, a Delaware
corporation ("Pac Rim").
WHEREAS, in order to induce Superior to enter into an Amended and
Restated Agreement and Plan of Merger with Pac Rim dated as of the Effective
Date (the "Merger Agreement"), Superior has requested that each of the Security
Holders, and each of the Security Holders has agreed to, enter into this
Agreement.
Capitalized terms used but not defined herein have the respective
meanings set forth in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1.
VOTING COVENANTS
1.1 Agreement to Vote. Each of the Security Holders hereby agrees
that during the time that this Agreement is in effect, at any meeting of the
stockholders of Pac Rim, however called, and in any action by written consent
of the stockholders of Pac Rim, and at any other relevant time, such Security
Holder shall:
(i) vote any Pac Rim Shares or Pac Rim Debentures presently
owned by such Security Holder and any additional Pac Rim Shares
acquired by such Security Holder (whether by purchase or otherwise)
after the Effective Date (collectively, the "Security Holder Shares")
in favor of the Merger, the Merger Agreement, as amended from time to
time, and the transactions contemplated by the Merger Agreement;
(ii) vote any Security Holder Shares against any Acquisition
Proposal (as defined in the Merger Agreement) and any other action or
agreement that would result in a breach in any material respect of any
covenant, representation or warranty or any other obligation of Pac
Rim under the Merger Agreement (including the Exhibits thereto) or
which is reasonably likely to result in any conditions to Pac Rim's
obligations under the Merger Agreement not being fulfilled; and
(ii) Each Security Holder shall, during the time this
Agreement is in force, conduct him, herself or itself, as the case may
be, in accordance with Section 7.1 of the Merger Agreement as if a
party thereto and bound thereby.
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1.2 Competing Transaction. In the event under the terms of Section
10.3 of the Merger Agreement a Breakup Fee (as defined therein) becomes payable
to Superior, whether or not such Breakup Fee has been paid, upon consummation
of the transaction contemplated by the Acquisition Proposal, each Security
Holder, with the exception of Allstate Insurance Company, an Illinois insurance
company ("Allstate"), agrees to pay to Superior, in cash, an amount equal to
the amount by which (x) the aggregate consideration for the Pac Rim Debentures
and the Series 1, 2 and 3 Detachable Warrants of Pac Rim (the "Pac Rim
Warrants") (which, if other than in cash, shall be based on the fair market
value thereof) paid to or received by such Security Holder in respect of the
Competing Transaction exceeds (y) the aggregate consideration for the Pac Rim
Debentures and Pac Rim Warrants payable to such Security Holder under that
certain Amended and Restated Series A Convertible Debenture and Series 1, 2 and
3 Detachable Warrant Purchase Agreement of even date herewith. Such payment
shall be made by wire transfer of immediately available funds within two (2)
business days of such Security Holder's receipt of such consideration to a bank
account designated by Superior.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF EACH SECURITY HOLDER
Each of the Security Holders represents and warrants, severally and
not jointly, to Superior that:
2.1 Authority Relative to this Agreement. Such Security Holder has
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. If the Security Holder is a corporate or trust entity,
the execution and delivery of this Agreement by the Security Holder and the
consummation by the Security Holder of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors or other
governing body of such Security Holder, and no other corporate or other
proceedings on the part of such Security Holder are necessary to authorize this
Agreement or to consummate such transactions. This Agreement has been duly and
validly executed and delivered by such Security Holder and constitutes a legal,
valid and binding obligation of such Security Holder, enforceable against such
Security Holder in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.
2.2 No Conflicts. (a) The execution and delivery of this Agreement
by such Security Holder do not, and the performance of this Agreement by such
Security Holder will not, (i) where such Security Holder is a corporate,
partnership or trust entity, conflict with or violate the organizational
documents of such Security Holder, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to such Security Holder or by
which such Security Holder Shares are bound or
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affected, or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would constitute a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
such Security Holder Shares pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which such Security Holder is a party or by which such Security
Holder or such Security Holder Shares are bound or affected, except, in the
case of clauses (i), (ii) and (iii) of this Section 2.2(a), for any such
conflicts, violations, breaches, defaults or other occurrences which would not
prevent or delay the performance by such Security Holder of its obligations
under this Agreement.
(b) The execution and delivery of this Agreement by such Security
Holder do not, and the performance of this Agreement by such Security Holder
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental entity, except for applicable
requirements, if any, of the Securities Exchange Act of 1934, as amended, and
except where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay
the performance by such Security Holder of its obligations under the Agreement.
2.3 Title to the Shares. As of the date hereof, such Security Holder
is the record and, except for any Security Holder which is identified as a
trust in Exhibit A hereto (collectively, the "Trust Security Holders"),
beneficial owner of such Security Holder Shares listed opposite the name of
such Security Holder on Exhibit A hereto. Such Security Holder Shares set
forth opposite the name of such Security Holder on Exhibit A hereto are the
only Security Holder Shares owned by such Security Holder. The Security Holder
Shares of such Security Holder are, or, if acquired after the date hereof, will
be, owned free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on such Security
Holder's voting rights, charges and other encumbrances of any nature
whatsoever, except that the Security Holder Shares held by Trust Security
Holders are held subject to the applicable trust documents, which will not
prevent or delay the performance by such Security Holder of its obligations
under this Agreement. Such Security Holder has not appointed or granted any
proxy, which appointment or grant is still effective, with respect to the
Security Holder Shares.
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ARTICLE 3.
COVENANTS OF EACH SECURITY HOLDER
Each of the Security Holders hereby covenants and agrees that:
3.1 No Sales of or Encumbrances on Security Holder Shares. Except
pursuant to the terms of this Agreement or the Merger Agreement, for so long as
such Security Holder is obligated to vote such Security Holder's Security
Holder Shares in accordance with Section 1.1 hereof, each Security Holder shall
not directly or indirectly sell, encumber, suffer a lien to exist upon, convey
or transfer or record beneficial ownership of any such Security Holder Shares
by any means whatsoever to any other person, except with the consent of
Superior; provided, however, that Trust Security Holders may transfer ownership
of Security Holder Shares as required by applicable governing instruments if
the transferee of any Security Holder Shares shall, prior to such transfer,
execute a counterpart to this Agreement and shall have agreed to be bound by
the terms of this Agreement, including, but not limited to, the obligation to
vote the Security Holder Shares in accordance with Section 1.1 hereof. Subject
to the foregoing, the Security Holders shall not (without limitation), directly
or indirectly (i) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the Security Holder Shares or (ii)
sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other disposition
of any Security Holder Shares during the term of this Agreement.
ARTICLE 4.
MISCELLANEOUS
4.1 Expenses. All costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
4.2 Further Assurances. Each of the Security Holders will execute
and deliver or cause to be executed and delivered all further documents and
instruments and use its best efforts to secure such consents and take all such
further action as may be reasonably necessary in order to consummate the
transactions contemplated hereby.
4.3 Additional Agreements. Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations and
which may be required under any agreements, contracts, commitments,
instruments, understandings, arrangements or restrictions of any kind to which
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such party is a party or by which such party is governed or bound, to
consummate and make effective the transactions contemplated by this Agreement,
to obtain all necessary waivers, consents and approvals and effect all
necessary registrations and filings, and submission of information requested by
governmental authorities, and to rectify any event or circumstances which could
impede consummation of the transactions contemplated hereby.
4.4 Specific Performance. The parties hereto agree that Superior
would be irreparably damaged if for any reason the Security Holders failed to
perform any of their obligations under this Agreement, and that Superior would
not have an adequate remedy at law for money damages in such event.
Accordingly, Superior shall be entitled to specific performance and injunctive
and other equitable relief to enforce the performance of this Agreement by the
Security Holders. This provision is without prejudice to any other rights that
Superior may have against the Security Holders for any failure to perform their
obligations under this Agreement.
4.5 Action in Security Holder Capacity Only. Each of the Security
Holders makes no agreement or understanding herein as director or officer of
Pac Rim. Each of the Security Holders signs solely in his, her or its
capacity, as the case may be, as a recordholder and, except for the Trust
Security Holders, beneficial owner of the Security Holder Shares of such
Security Holder, and nothing herein shall limit or affect any action taken in
his, her or its capacity, as the case may be, as an officer or director of Pac
Rim.
4.6 Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by facsimile or by registered or certified mail (postage prepaid,
return receipt requested) to such party at its address set forth on the
signature page hereto.
4.7 Amendments; Termination. This Agreement may not be modified,
amended, altered or supplemented, except upon the execution and delivery of a
written agreement executed by Superior and any Security Holders adversely
affected thereby.
(b) Allstate's obligation under this Agreement shall terminate on the
earlier to occur of (i) the date of the termination of the Merger Agreement in
accordance with its terms, (ii) the Effective Time (as defined in the Merger
Agreement) of the Merger, or (iii) September 30, 1997, provided, that if the
parties to this Agreement have been notified that the Termination Date (as
defined in the Merger Agreement) has been extended in accordance with the terms
thereof, such September 30, 1997 date shall be extended to the Termination
Date, if later. Other than Allstate, the obligations of the Security Holders
(and this Agreement as it pertains to such Security Holders other than
Allstate) shall terminate on the earlier to occur of (w) the Effective Time of
the Merger; (x) if the Merger Agreement is terminated pursuant to subsections
9.2(b) (as it applies to Pac Rim's stockholders only) or 9.3(i) thereof, on
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September 30, 1997, (y) if the Merger Agreement is terminated pursuant to
subsections 9.1, 9.3(ii) or 9.3(iii) thereof, immediately upon such
termination, or (z) if the Merger Agreement is terminated pursuant to any other
provision therein, on June 15, 1997, except that if the Termination Date has
been extended and such Security Holders are so notified, such June 15, 1997
date shall be extended by like amount. Notwithstanding the foregoing, the
Security Holders' obligation under Section 1.2 hereof shall survive the
termination of this Agreement.
4.8 Successors and Assigns; Third Party Beneficiary. The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. No party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of Superior and the transferring Security Holder,
provided that Trust Security Holders may assign, delegate or otherwise transfer
such rights or obligations in connection with any transfer pursuant to Section
3.1 hereof as required under applicable governing instruments, provided that
the assignee, delegatee, or transferee shall be required to execute a
counterpart to this Agreement, and shall agree to be bound by the terms of this
Agreement, including, but not limited to, the obligation to vote the Security
Holder Shares in accordance with Section 1.1.
4.9 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to its
principles of conflict of law.
4.10 Venue. Any action concerning a dispute arising out of or
concerning this Agreement, regarding the interpretation of this Agreement, or
regarding the relationships among the parties created pursuant to this
Agreement shall be filed only in the United States District Court for the
Central District of California or in the Superior Court of the State of
California for the County of Los Angeles.
4.11 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
4.12 Entire Agreement. This Agreement constitutes the entire
agreement between Superior and each Security Holder with respect to the subject
matter hereto.
4.13 Severability. If any term, condition or provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto
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shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in a mutually acceptable manner in order that the
terms of this Agreement remain as originally contemplated to the fullest extent
possible; provided, however, that any such determination will not relieve any
of the parties hereto of liability for breach of any warranty or representation
set forth herein.
4.14 Legal Action. In the event of any litigation between or among
the parties hereto respecting or arising out of this Agreement, the prevailing
party or parties shall be entitled to recover reasonable attorneys' fees and
costs, whether or not such litigation proceeds to final judgment or
determination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
SUPERIOR NATIONAL INSURANCE GROUP, INC.
By: /s/ J. XXXXX XXXXXX
---------------------------------
Name: J. Xxxxx Xxxxxx
Title: Executive Vice President and Chief Financial Officer
Address for Notice: Superior National Insurance
Group, Inc.
00000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
ALLSTATE INSURANCE COMPANY
By: /s/ J. XXXXX XXXX
---------------------------------
Name: J. Xxxxx Xxxx
Title: Authorized Signatory
By: /s/ XXXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
Address for Notice: Allstate Insurance Company
0000 Xxxxxxx Xxxx, Xxxxx X0
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxx, Strategic
Development Manager
with a copy to
Allstate Insurance Company
Investment Law Department
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
DITO-DEVCAR CORPORATION, DITO CAREE LIMITED PARTNERSHIP,
a Nevada corporation a Nevada limited partnership
By: GAMEBUSTERS, INC.
a Nevada corporation
Its:General Partner
By: /s/ XXXXX X. XXXX By: /s/ XXXXX X. XXXX
------------------------- -------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: President Title: President
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PRAC LIMITED PARTNERSHIP,
a Nevada limited partnership
By: Somme, Inc.
a Nevada corporation
Its: General Partner
By: /s/ XXXXX X. XXXX
-------------------------
Name: Xxxxx X. Xxxx
Title: President
/s/ XXXXXXX X. PICKUP
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Xxxxxxx X. Pickup, in his capacity as
Trustee of: Pickup Family Trust,
TMP Charitable Unitrust, and
DRP Charitable Unitrust
Address for Notices for: Dito-Devcar Corporation,
Dito Caree Limited Partnership
Prac Limited Partnership
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Address for Notices for: Pickup Family Trust
TMP Charitable Unitrust
DRP Charitable Unitrust
c/o Wedbush Xxxxxx Securities
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Pickup
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EXHIBIT A
SECURITY HOLDER SECURITY HOLDER SHARES AMOUNT
--------------- ---------------------- ------
Dito-Devcar Corporation Pac Rim Shares 1,421,550
Dito Caree Limited
Partnership Pac Rim Shares 896,000
Pickup Family Trust Pac Rim Shares 92,000
TMP Charitable Unitrust Pac Rim Shares 29,000
Xxxxxxx X. Pickup Trustee
DRP Charitable Unitrust Pac Rim Shares 30,000
Xxxxxxx X. Pickup Trustee
Prac Limited Partnership Pac Rim Debentures $18,000,000
Allstate Insurance Company Pac Rim Debentures $2,000,000
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