VOTING AND LOCKUP AGREEMENT
VOTING AND LOCKUP AGREEMENT, dated as of June 3, 2003 (this
"Agreement"), by and between WellPoint Health Networks Inc., a Delaware
corporation ("Purchaser"), and Wisconsin United for Health Foundation, Inc., a
Wisconsin nonstock corporation ("Stockholder"), a stockholder of Cobalt
Corporation, a Wisconsin corporation ("Target").
RECITALS
A. Concurrently with the execution of this Agreement, Purchaser,
Crossroads Acquisition Corp. ("Merger Sub") and Target are entering into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Target
will be merged with and into Merger Sub, Merger Sub will be the surviving
corporation in the merger and will be a wholly owned subsidiary of Purchaser,
all upon the terms and subject to the conditions set forth in the Merger
Agreement (the "Merger"), unless a Reverse Merger Election is made by Purchaser
in accordance with the Merger Agreement, in which case Merger Sub will be merged
with and into Target, Target will be the surviving corporation in the Merger and
will be a wholly owned subsidiary of Purchaser . Unless otherwise indicated,
capitalized terms not defined herein have the meanings given to them in the
Merger Agreement.
B. Stockholder is a beneficial owner of common stock of Target and,
with respect to the Merger, has the power to direct the voting of 25,009,390
shares of the common stock, no par value, of Target which represents all of the
shares of common stock of the Target owned by it (collectively, the "Shares").
C. Stockholder's rights regarding its ownership of common stock of
Target are subject to the Voting Trust and Divestiture Agreement, dated as of
March 23, 2001, among Target, Stockholder, Wisconsin BC Holdings LLC, a
Wisconsin limited liability company and the trustee thereunder (the "2001 Voting
Trust Agreement").
D. As a material inducement to enter into the Merger Agreement and to
consummate the Merger, Purchaser desires Stockholder to agree, and Stockholder
is willing to agree (i) subject to the terms of this Agreement, including,
without limitation, Section 6 of this Agreement, to vote or cause to be voted
the Shares or any New Shares (as hereinafter defined) and any other such shares
of capital stock of Target acquired and beneficially owned by Stockholder in
favor of the Merger and (ii) to comply in all respects with all of the terms of
this Agreement.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. Voting of Shares.
Section 1.1 Voting Agreement. (a) At every meeting of the stockholders of
Target called with respect to any of the following, and at every adjournment or
postponement thereof, Stockholder shall vote or cause to be voted the Shares and
any New Shares in favor of adoption
and approval of the Merger Agreement and the terms thereof and each of the other
transactions contemplated thereby.
(b) At any meeting of Target stockholders or at any adjournment thereof or
in any other circumstances upon which their vote, consent or other approval is
sought, Stockholder shall vote (or cause to be voted), to the extent permitted
by the 2001 Voting Trust Agreement, all of the Shares and any New Shares against
(i) the approval of any Acquisition Proposal or (ii) any amendment of Target's
Amended and Restated Articles of Incorporation or Second Amended and Restated
Bylaws or other proposal or transaction involving Target or any of its
Subsidiaries which amendment or other proposal or transaction would in any
manner impede, frustrate, prevent or nullify the Merger, the Merger Agreement or
any of the other transactions contemplated by the Merger Agreement.
Section 1.2 New Shares. Stockholder agrees that any shares of capital stock
of Target that Stockholder purchases or with respect to which Stockholder
otherwise acquires beneficial ownership ("New Shares") after the execution of
this Agreement and prior to the Expiration Date shall be subject to the terms
and conditions of this Agreement to the same extent as if they constituted
Shares.
Section 1.3 Waiver of Appraisal Rights. Stockholder hereby irrevocably and
unconditionally waives any rights of appraisal, dissenters' rights or similar
rights that Stockholder may have in connection with the Merger.
2. Transfer Restrictions and Obligations.
Section 2.1 Lock-Up. After the execution of this Agreement until the
Expiration Date, Stockholder will not:
(a) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any of the Shares or New Shares or any
securities convertible into or exercisable or exchangeable for Shares
or New Shares or join in any registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to any of the foregoing;
(b) enter into swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of Shares or New Shares; or
(c) create or permit to exist any liens, claims, options, charges or other
encumbrances on or otherwise affecting any of the Shares or New
Shares.
Section 2.2 Voting Trust Agreement. Stockholder covenants and agrees to
enter into a Voting Trust Agreement with Purchaser and a qualified trustee
providing for the deposit with the voting trustee of the number of shares of the
Purchaser then owned by Stockholder which are in excess of the Ownership Limit
(as defined in Purchaser's Restated Certificate of Incorporation). The Voting
Trust Agreement shall contain limitations only to the extent required
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by the Blue Cross Blue Shield Association. The Voting Trust Agreement, when
executed by the Purchaser, Stockholder and such trustee, shall replace and
supercede the 2001 Voting Trust Agreement. If at Closing the number of shares of
the Purchaser then owned by Stockholder is less than the Ownership Limit, then
Purchaser and Stockholder shall immediately jointly notify, in writing, the
Trustee under the 2001 Voting Trust Agreement that the Stockholder owns less
than five percent (5%) of the issued and outstanding shares of Common Stock (as
defined in the 2001 Voting Trust Agreement) and less than five percent (5%) of
the issued and outstanding shares of every other class of Capital Stock (as
defined in the 2001 Voting Trust Agreement) of the Purchaser.
3. Representations and Warranties of the Stockholder.
Section 3.1 Ownership of Shares. Stockholder represents and warrants that
Stockholder (i) is the beneficial owner of and has the sole right to vote or
direct the voting of the Shares with respect to the adoption and approval of the
Merger Agreement and the terms thereof, which Shares at the date hereof are free
and clear of any liens, claims, options, charges or other encumbrances (other
than the 2001 Voting Trust Agreement) and (ii) does not own, either beneficially
or of record, any shares of capital stock of Target other than the Shares.
Section 3.2 No Conflict. The execution and delivery of this Agreement by
Stockholder do not, and the performance of this Agreement by Stockholder will
not: (i) conflict with or violate any legal requirement, order, decree or
judgment applicable to Stockholder or by which Stockholder or any of
Stockholder's properties is bound or affected; or (ii) result in any breach of
or constitute a default (with notice or lapse of time, or both) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of an encumbrance on or otherwise affecting any of the
Shares pursuant to, any contract to which Stockholder is a party or by which
Stockholder or any of Stockholder's properties is bound or affected. The
execution and delivery of this Agreement by Stockholder do not, and the
performance of its obligations under this Agreement by Stockholder will not,
require any consent of any person.
Section 3.3 Enforceability. Stockholder has all requisite power and
capacity to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by Stockholder
and, assuming the due authorization, execution and delivery of this Agreement by
Purchaser, constitutes the legal, valid and binding obligations of Stockholder,
enforceable against Stockholder in accordance with its terms, subject to (i)
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
Section 3.4 Consent and Waiver. No consents or waivers are reasonably
required for the consummation of the Merger under the terms of (a) any
agreements between Stockholder (or any of its affiliates) and Target, or any
Target Subsidiary or (b) other rights that Stockholder may have.
Section 3.5 Continuous Warranty. The representations and warranties
contained in this Agreement are accurate in all respects as of the date of this
Agreement, will be accurate in
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all material respects at all times through the Expiration Date and will be
accurate in all material respects as of the date of the consummation of the
Merger as if made on that date.
4. Representations and Warranties of Purchaser.
Section 4.1 Enforceability. Purchaser has all requisite power and capacity
to execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly executed and delivered by Purchaser and, assuming
the due authorization, execution and delivery of this Agreement by Stockholder,
constitutes the legal, valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with its terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies.
5. Covenants of Stockholder. Stockholder hereby covenants and agrees to
cooperate fully with Purchaser and to execute and deliver any additional
documents necessary or desirable and to take such further actions, in the
reasonable opinion of Purchaser, necessary or desirable to carry out the intent
of this Agreement.
6. Termination. This Agreement shall terminate upon and shall have no further
force or effect after the earliest to occur of (a) the termination of the Merger
Agreement, (b) the Effective Time, (c) the Merger Agreement is amended in any
manner materially adverse to the Stockholder without the consent of the
Stockholder or (d) the Board of Directors of Target shall, pursuant to and in
accordance with Section 5.1(b) of the Merger Agreement, withhold, withdraw,
amend or modify in a manner adverse to Purchaser its recommendation with respect
to the approval and adoption of the Merger Agreement and the transactions
contemplated thereby (such earliest to occur shall be the "Expiration Date").
7. Controlling Person Liability. Purchaser hereby agrees to indemnify
Stockholder, and its directors, officers and employees ("Indemnified Persons")
against any and all losses, claims, damages or liabilities, joint or several,
actions or proceedings (whether commenced or threatened) in respect thereof
("Claims") and expenses (including reasonable attorneys fees and reasonable
expenses of investigation) to which such Indemnified Person may become subject
under the Securities Act, the Securities Exchange Act of 1934, as amended,
common law or otherwise, arising out of the Form S-4 or the proxy
statement/prospectus contained therein; provided that Purchaser shall not be
liable to any Indemnified Person to the extent such Claim or expense arises out
of, or is based upon information furnished by such Indemnified Person or the
Stockholder in writing for use in the Form S-4 or proxy statement/prospectus.
8. Miscellaneous.
Section 8.1 Fees and Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such
expenses.
Section 8.2 Amendments and Modification. Subject to applicable law, this
Agreement may not be amended, modified, or supplemented except upon the
execution and delivery of a written agreement executed by the parties hereto.
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Section 8.3 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Expiration Date; provided, however that the termination of this Agreement shall
not relieve any party from any liability for any breach of this Agreement.
Section 8.4 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed) or sent by an internationally recognized overnight courier
service, such as Federal Express, to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice):
if to Purchaser, to:
WellPoint Health Networks Inc.
0 XxxxXxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Attn: General Counsel
Telecopy No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
And
if to Stockholder, to:
Wisconsin United for Health Foundation, Inc.
Xxx Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attn: Chairman
Telecopy No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Kuelthau, sc
000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxxxx
Telecopy No: (000) 000-0000
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Section 8.5 Counterparts. This Agreement may be executed in one or more
counterparts (whether delivered by facsimile or otherwise), each of which shall
be considered one and the same agreement.
Section 8.6 Entire Agreement. This Agreement and the documents and the
instruments referred to herein constitute the entire agreement and supersede all
prior agreements, negotiations, arrangements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 8.7 Severability. Any term or provision of this Agreement that is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the invalid, void or unenforceable term or
provision in any other situation or in any other jurisdiction. If the final
judgment of a court of competent jurisdiction or other authority declares that
any term or provision hereof is invalid, void or unenforceable, the parties
agree that the court making such determination shall have the power to and
shall, subject to the discretion of such court, reduce the scope, duration, area
or applicability of the term or provision, to delete specific words or phrases,
or to replace any invalid, void or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.
Section 8.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Wisconsin.
Section 8.9 Enforcement. 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 the parties 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 any court of the United States
sitting in the Borough of Manhattan, The City of New York, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties (a) consents to submit itself to the personal
jurisdiction of any Federal court sitting in the Borough of Manhattan, The City
of New York in the event any dispute arises out of this Agreement or any of the
Transactions and (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court.
PURCHASER AND STOCKHOLDER EACH IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT
THEY MAY HAVE TO TRIAL BY JURY IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.10 Extension, Waiver. At any time prior to the Expiration Date,
the parties to this Agreement may (a) extend the time for the performance of any
of the obligations or other
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acts of the other party to this Agreement, (b) waive any inaccuracies in the
representations and warranties of the other party contained in this Agreement or
in any document delivered pursuant to this Agreement or (c) waive compliance by
the other party with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
Section 8.11 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties to
this Agreement (whether by operation of law or otherwise) without the prior
written consent of the other party to this Agreement. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns. Without
limiting any of the restrictions set forth in Section 2 or elsewhere in this
Agreement, this Agreement shall be binding upon any person to whom any Shares or
any New Shares are transferred.
Section 8.12 Legal Counsel. Stockholder acknowledges that it has been
advised to, and has had the opportunity to, consult with its attorney prior to
entering into this Agreement. Stockholder acknowledges that attorneys for Target
represent Target and do not represent any of the stockholders of Target in
connection with the Merger Agreement, this Agreement or any of the transactions
contemplated hereby or thereby.
Section 8.13 Agreement Negotiated. The form of this Agreement has been
negotiated by or on behalf of Purchaser and Stockholder, each of which was
represented by attorneys who have carefully negotiated the provisions hereof. No
law or rule relating to the construction or interpretation of contracts against
the drafter of any particular clause should be applied with respect to this
Agreement.
Section 8.14 Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the date and year first above written.
WELLPOINT HEALTH NETWORKS INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
WISCONSIN UNITED FOR HEALTH
FOUNDATION, INC.
By: /s/ Xxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
Title: President
