STOCKHOLDER VOTING AGREEMENT
BY AND AMONG
CIMA LABS INC.
AND
XXXXXXXXX X. XXXXXXXX
DATED AS OF AUGUST 5, 2003
STOCKHOLDER VOTING AGREEMENT
This STOCKHOLDER VOTING AGREEMENT (this "Agreement") is entered into as
of August 5, 2003, by and among Cima Labs Inc., a Delaware corporation ("Cima"),
and Xxxxxxxxx X. Xxxxxxxx ("Stockholder"), a stockholder of aaiPharma Inc., a
Delaware corporation ("AAI").
WITNESSETH:
WHEREAS, as of the date hereof, Stockholder "beneficially owns" (as
such term is defined in Rule 13d-3 promulgated under the Securities Exchange Act
of 1934, as amended) and is entitled to dispose of (or to direct the disposition
of) and to vote (or to direct the voting of) 6,253,167 shares of common stock,
par value $0.001 per share (the "Common Stock"), of AAI, as such shares may be
adjusted by stock dividend, stock split, recapitalization, combination, merger,
consolidation, reorganization or other change in the capital structure of AAI
affecting the Common Stock (such shares of Common Stock, together with any other
shares of Common Stock the voting power over which is acquired by Stockholder
during the period from and including the date hereof through and including the
date on which this Agreement is terminated in accordance with its terms, are
collectively referred to herein as the "Subject Shares");
WHEREAS, Cima, AAI, Scarlet Holding Corporation, a Delaware corporation
("Holding Company"), Scarlet MergerCo, Inc., a Delaware corporation and a
direct, wholly owned subsidiary of Holding Company ("S MergerCo"), and Crimson
MergerCo, Inc., a Delaware corporation and a direct, wholly owned subsidiary of
Holding Company ("C MergerCo"), propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (as the same may be amended, the "Merger
Agreement"), pursuant to which Holding Company will acquire all of the capital
stock of each of Cima and AAI through the merger of S MergerCo with and into AAI
(the "AAI Merger") and the merger of C MergerCo with and into Cima (the "Cima
Merger"), with AAI and Cima surviving as wholly owned subsidiaries of Holding
Company; and
WHEREAS, as a condition to the willingness of Cima to enter into the
Merger Agreement, and as an inducement and in consideration therefor, Cima has
required that Stockholder agree, and Stockholder has agreed, to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. For purposes of this Agreement, capitalized
terms used and not defined herein shall have the respective meanings ascribed to
them in the Merger Agreement.
ARTICLE II
VOTING AGREEMENT AND IRREVOCABLE PROXY
SECTION 2.1 AGREEMENT TO VOTE THE SUBJECT SHARES. Stockholder, in his
capacity as such, hereby agrees that, during the period commencing on the date
hereof and continuing until
the termination of this Agreement (such period, the "Voting Period"), at any
meeting (or any adjournment or postponement thereof) of the holders of any class
or classes of the capital stock of AAI, however called, or in connection with
any written consent of the holders of any class or classes of the capital stock
of AAI, Stockholder shall vote (or cause to be voted) the Subject Shares (x) in
favor of adoption of the Merger Agreement and the approval of the AAI Merger and
the other transactions contemplated by the Merger Agreement (and any actions
required in furtherance thereof), (y) against any action, proposal, transaction
or agreement that would result in a breach in any respect of any covenant,
representation or warranty or any other obligation or agreement of AAI or any of
its subsidiaries under the Merger Agreement or of Stockholder under this
Agreement, and (z) except as otherwise agreed to in writing in advance by Cima,
against (i) any Acquisition Proposal; (ii) any change in the Persons who
constitute the board of directors of AAI that is not approved in advance by at
least a majority of the Persons who were directors of AAI as of the date of this
Agreement (or their successors who were so approved); and (iii) any other action
or proposal involving AAI or any of its subsidiaries that is intended, or could
reasonably be expected, to prevent, materially impede, or materially impair or
delay consummation of the AAI Merger or the other transactions contemplated by
the Merger Agreement. Any such vote shall be cast or consent shall be given in
accordance with such procedures relating thereto as shall ensure that it is duly
counted for purposes of determining that a quorum is present and for purposes of
recording the results of such vote or consent. Stockholder agrees not to enter
into any agreement, letter of intent, agreement in principle or understanding
with any Person that violates or conflicts with or could reasonably be expected
to violate or conflict with the provisions and agreements contained in this
Agreement or the Merger Agreement.
SECTION 2.2 GRANT OF IRREVOCABLE PROXY. Stockholder hereby appoints
Cima and any designee of Cima, and each of them individually, as Stockholder's
proxy and attorney-in-fact, with full power of substitution and resubstitution,
to vote or act by written consent during the Voting Period with respect the
Subject Shares in accordance with Section 2.1. This proxy is given to secure the
performance of the duties of Stockholder under this Agreement. The Stockholder
shall promptly cause a copy of this Agreement to be deposited with AAI at its
principal place of business. Stockholder shall take such further action or
execute such other instruments as may be necessary to effectuate the intent of
this proxy.
SECTION 2.3 NATURE OF IRREVOCABLE PROXY. The proxy and power of
attorney granted pursuant to Section 2.2 by Stockholder shall be irrevocable
during the term of this Agreement, 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 Stockholder. The power of attorney granted by
Stockholder herein is a durable power of attorney and shall survive the
dissolution, bankruptcy, death or incapacity of Stockholder. The proxy and power
of attorney granted hereunder shall terminate upon the termination of this
Agreement pursuant to Section 6.1.
SECTION 2.4 LEGEND. Stockholder shall promptly cause the following
legend to be conspicuously noted on each certificate representing its Subject
Shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDER VOTING AGREEMENT DATED AS OF AUGUST 5, 2003. THE
STOCKHOLDER
2
VOTING AGREEMENT RESTRICTS THE TRANSFERABILITY OF THE SHARES
REPRESENTED BY THIS CERTIFICATE AND INCLUDES A VOTING AGREEMENT AND AN
IRREVOCABLE PROXY TO VOTE THE SHARES REPRESENTED BY THIS CERTIFICATE."
SECTION 2.5 CAPACITY. No person executing this Agreement who is or
becomes during the term hereof a director or officer of AAI makes any agreement
or understanding herein in his or her capacity as such a director or officer of
AAI. Stockholder signs solely in his, her or its capacity as the record holder
and beneficial owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, the Subject Shares and nothing herein shall limit or
affect any actions taken by Stockholder or any Affiliate of Stockholder in his
capacity as an officer or director of AAI to the extent permitted by the Merger
Agreement.
ARTICLE III
COVENANTS
SECTION 3.1 GENERALLY. Stockholder agrees that, except as contemplated
by the terms of this Agreement and the Merger Agreement or as set forth on
Schedule I hereto, during the Voting Period, he shall not (a) sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of, or enter into any
contract, option or other agreement with respect to, or consent to, the sale,
transfer, tender, pledge, encumbrance, assignment or other disposition of, any
or all of the Subject Shares, except for transfers by operation of law, by will
or pursuant to the laws of descent or distribution; or (b) take any action that
would have the effect of preventing, impeding, interfering with or adversely
affecting his ability to perform his obligations under this Agreement.
SECTION 3.2 STANDSTILL OBLIGATIONS OF STOCKHOLDER. Stockholder, jointly
and severally, covenants and agrees with Cima that, during the period commencing
on the date hereof and ending on the date this Agreement is terminated under
Section 6.1 hereof:
(a) Stockholder shall not, nor shall Stockholder permit any of his
Affiliates to, nor shall Stockholder act in concert with or permit any Affiliate
to act in concert with any Person to, solicit or participate, directly or
indirectly, in any "solicitation" of "proxies" (as defined by the rules and
regulations of the Securities and Exchange Commission) or powers of attorney or
similar rights to vote from any holder of shares of Common Stock, nor shall they
seek to advise or influence any Person with respect to the voting of any shares
of Common Stock in connection with any vote or other action on any matter, other
than to recommend that stockholders of AAI vote in favor of the AAI Merger and
the Merger Agreement and otherwise as expressly provided by Article II of this
Agreement.
(b) Stockholder shall not, nor shall Stockholder permit any of his
Affiliates to, nor shall Stockholder act in concert with or permit any Affiliate
to act in concert with any Person to, deposit any shares of Common Stock in a
voting trust or subject any shares of Common Stock to any arrangement or
agreement with any Person with respect to the voting of such shares of Common
Stock, except as provided by Article II and Schedule I of this Agreement.
3
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder hereby represents and warrants, jointly and severally, to
Cima as follows:
SECTION 4.1 CAPACITY. Stockholder has all legal capacity and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Stockholder and constitutes a valid and binding obligation of Stockholder
enforceable in accordance with its terms (except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles).
SECTION 4.2 OWNERSHIP OF SHARES. As of the date hereof, Stockholder is
the lawful owner of 6,113,167 shares of Common Stock (the "Owned Shares") and
has the sole power to vote (or cause to be voted) such shares of Common Stock.
Except as set forth on Schedule II hereto, neither Stockholder nor any Affiliate
of Stockholder owns or holds any right to acquire any additional shares of any
class of capital stock of AAI or other securities of AAI or any interest therein
or any voting rights with respect to any securities of AAI. Except as set forth
on Schedule III hereto, Stockholder has good and valid title to the Owned
Shares, free and clear of any and all pledges, mortgages, liens, charges,
proxies, voting agreements, encumbrances, adverse claims, options, security
interests and demands of any nature or kind whatsoever, other than those created
by this Agreement.
SECTION 4.3 NO CONFLICTS. (a) 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 Stockholder and the consummation by
Stockholder of the transactions contemplated hereby and (b) none of the
execution and delivery of this Agreement by the Stockholder, the consummation by
Stockholder of the transactions contemplated hereby or compliance by Stockholder
with any of the provisions hereof shall (i) result in, or give rise to, a
violation or breach of or a default under any of the terms of any material
contract, understanding, agreement or other instrument or obligation to which
Stockholder is a party or by which Stockholder or any of the Subject Shares or
assets may be bound or (ii) violate any applicable order, writ, injunction,
decree, judgment, statute, rule or regulation which could reasonably be expected
to adversely affect Stockholder's ability to perform his obligations under this
Agreement.
SECTION 4.4 RELIANCE BY CIMA. Stockholder understands and acknowledges
that Cima is entering into the Merger Agreement in reliance upon the execution
and delivery of this Agreement by Stockholder.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CIMA
Cima hereby represents and warrants to the Stockholder as follows:
SECTION 5.1 DUE ORGANIZATION, ETC. Cima is a company duly organized and
validly existing under the Laws of the jurisdiction of its incorporation. Cima
has all necessary corporate
4
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Cima and constitutes a valid and binding obligation of Cima
enforceable in accordance with its terms (except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles).
SECTION 5.2 CONFLICTS. (a) 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 Cima and the consummation by Cima of the
transactions contemplated hereby and (b) none of the execution and delivery of
this Agreement by Cima or the consummation by Cima of the transactions
contemplated hereby shall (i) conflict with or result in any breach of the
organizational documents of Cima, (ii) result in a violation or breach of or a
default under any of the terms of any material contract, understanding,
agreement or other instrument or obligation to which Cima is a party or by which
Cima or any of its assets may be bound or (iii) violate any applicable order,
writ, injunction, decree, judgment, statute, rule or regulation which could
reasonably be expected to adversely affect Cima's ability to perform its
obligations under this Agreement.
ARTICLE VI
TERMINATION
SECTION 6.1 TERMINATION. This Agreement shall terminate, and neither
Cima nor Stockholder shall have any rights or obligations hereunder and this
Agreement shall become null and void and have no effect upon the earliest to
occur of (a) the mutual consent of Cima and Stockholder to terminate this
Agreement, (b) the Effective Time, (c) the date of termination of the Merger
Agreement in accordance with its terms, (d) the Termination Date or (e) the date
of any amendment to the Merger Agreement in a manner that reduces the AAI
Exchange Ratio, increases the Cima Exchange Ratio or amends or alters Section
6.04 therein in a manner adverse to Stockholder, unless consented to by
Stockholder; provided, however, that (1) the termination of this Agreement shall
not prevent any party hereunder from seeking any remedies (at Law or in equity)
against any other party hereto for such party's breach of any of the terms of
this Agreement. Notwithstanding the foregoing, Sections 7.2 through 7.13,
inclusive, of this Agreement shall survive the termination of this Agreement.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 PUBLICATION. Stockholder hereby permits Cima to publish and
disclose in the Proxy Statement (and all related documents and schedules filed
with the Securities and Exchange Commission) his identity and ownership of
shares of Common Stock and the nature of its commitments, arrangements and
understandings pursuant to this Agreement.
SECTION 7.2 FURTHER ACTIONS. Each of the parties hereto agrees that it
will use its reasonable best efforts to do all things necessary to effectuate
this Agreement.
5
SECTION 7.3 AMENDMENTS, WAIVERS, ETC. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by each
of the parties hereto. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at Law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof shall not constitute a waiver by such party of
its right to exercise any such or other right, power or remedy or to demand such
compliance.
SECTION 7.4 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not to be performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms hereof in
addition to any other remedies at Law or in equity.
SECTION 7.5 NOTICES. Any notices or other communications required or
permitted under, or otherwise in connection with this Agreement shall be in
writing and shall be deemed to have been duly given when delivered in Person or
upon confirmation of receipt when transmitted by facsimile transmission (but
only if followed by transmittal by national overnight courier or hand for
delivery on the next Business Day) or on receipt after dispatch by registered or
certified mail, postage prepaid, addressed, or on the next Business Day if
transmitted by national overnight courier, in each case as follows:
If to Cima, addressed to it at:
Cima Labs, Inc.
00000 Xxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Chief Executive Officer
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxx
R. Xxxxx Xxxxx
Facsimile: (000) 000-0000
6
If to the Stockholder, addressed to it at:
Xxxxxxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxx, Xxxxx 0
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxxxx X. Xxxxxxxx
with a copy to:
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
SECTION 7.6 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 7.7 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 economic or legal
substance of the transactions contemplated hereby 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
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 transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 7.8 ENTIRE AGREEMENT. This Agreement (together with the Merger
Agreement, to the extent referred to herein) constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
agreements and undertakings, both written and oral, between the parties, or any
of them, with respect to the subject matter hereof.
SECTION 7.9 ASSIGNMENT. This Agreement shall not be assigned by
operation of Law or otherwise without the prior written consent of each of the
parties.
SECTION 7.10 PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and their respective
successors and assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.
SECTION 7.11 MUTUAL DRAFTING. Each party hereto has participated in the
drafting of this Agreement, which each party acknowledges is the result of
extensive negotiations between the parties.
7
SECTION 7.12 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL BY
JURY.
(a) This Agreement and the transactions contemplated hereby, and all
disputes between the parties under or related to the Agreement or the facts and
circumstances leading to its execution, whether in contract, tort or otherwise,
shall be governed by and construed in accordance with the Laws of the State of
Delaware, without regard to the application of Delaware principles of conflicts
of laws.
(b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any
Delaware State court, or Federal court of the United States of America, sitting
in Delaware, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby or for recognition or enforcement of any judgment relating thereto, and
each of the parties hereby irrevocably and unconditionally (i) agrees not to
commence any such action or proceeding except in such courts, (ii) agrees that
any claim in respect of any such action or proceeding may be heard and
determined in such Delaware State court or, to the extent permitted by Law, in
such Federal court, (iii) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in any such Delaware State or
Federal court, and (iv) waives, to the fullest extent permitted by Law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such Delaware State or Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by Law. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 7.5. Nothing in
this Agreement shall affect the right of any party to this Agreement to serve
process in any other manner permitted by Law.
(c) 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 OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV)
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.12(c).
SECTION 7.13 COUNTERPARTS. 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.
8
IN WITNESS WHEREOF, Cima and Stockholder have caused this Agreement to
be duly executed as of the day and year first above written.
CIMA LABS INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx
Interim Chief Executive Officer
STOCKHOLDER
By: /s/ Xxxxxxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxxxxx X. Xxxxxxxx, Ph.D.
SIGNATURE PAGE TO XXXXXXXX VOTING AGREEMENT
