EXHIBIT 10
VOTING AGREEMENT
VOTING AGREEMENT, dated as of June 2, 2001 (the "Agreement"), by and
between the shareholders of The Cobalt Group, Inc., a Washington corporation
(the "Company"), whose names appear on Schedule I hereto (each a "Party" and
collectively the "Parties").
W I T N E S S E T H:
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WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Cobalt Acquisition Corporation, a Washington corporation ("Merger
Sub") and the Company are entering into an Agreement and Plan of Merger, dated
as of the date hereof (the "Merger Agreement"), which provides for, upon the
terms and subject to the conditions set forth therein, the merger of Merger Sub
with and into the Company (the "Merger");
WHEREAS, pursuant to the terms of the Merger Agreement, the shares of
common stock, par value $0.01 per share, of the Company (the "Company Common
Stock") held by each Party and designated on Schedule I hereto as rollover
shares (the "Rollover Shares") will remain outstanding after the Merger and will
represent one validly issued, fully paid and nonassessable share of common
stock, par value $0.01 per share, of the Surviving Corporation;
WHEREAS, as of the date hereof, each Party owns beneficially the number of
shares of Company Common Stock set forth opposite such Party's name on Schedule
I hereto (all such shares so owned and which may hereafter be acquired by such
Party prior to the termination of this Agreement, whether upon the exercise of
options or by means of purchase, dividend, distribution or otherwise, being
referred to herein as the "Shares"); and
WHEREAS, in order to induce Merger Sub to enter into the Merger Agreement,
the Parties are willing to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, each
Party hereby agrees as follows:
ARTICLE I.
TRANSFER AND VOTING OF SHARES; AND
OTHER COVENANTS OF THE PARTIES
SECTION 1.1. Voting of Shares. From the date hereof until the termination
of this Agreement pursuant to Section 3.2 hereof (the "Term"), at any meeting of
the shareholders of the Company, however called, each Party agrees to vote its
Shares (i) in favor of the Merger and the Merger Agreement (as amended from time
to time; provided that no Party shall be required to vote in favor of the Merger
Agreement or the Merger if the Merger Agreement has been amended in any manner
that is material and adverse to such Party (without affecting the other Parties
in a similar manner) without such Party's written consent), (ii) against any
Takeover Proposal and against any proposal for action or agreement that would
result in a breach
of any covenant, representation or warranty or any other obligation or agreement
of the Company under the Merger Agreement or which is reasonably likely to
result in any of the conditions of the Company's obligations under the Merger
Agreement not being fulfilled, any change in the directors of the Company, any
change in the present capitalization of the Company or any amendment to the
Company's Amended and Restated Articles of Incorporation or the Company's
Amended and Restated By-Laws, any other material change in the Company's
corporate structure or business, or any other action, which in the case of each
of the matters referred to in this clause (ii) could reasonably be expected to
impede, interfere with, delay, postpone or materially adversely affect the
transactions contemplated by the Merger Agreement or the likelihood of such
transactions being consummated and (iii) in favor of any other matter necessary
for consummation of the transactions contemplated by the Merger Agreement which
is considered at any such meeting of shareholders, and in connection therewith
to execute any documents which are necessary or appropriate in order to
effectuate the foregoing; provided, however, that nothing herein shall prevent
any Party from discharging such Party's fiduciary duties to the Company's
shareholders under the Washington Business Corporation Act, solely as a member
of the Company's Board of Directors.
SECTION 1.2. No Inconsistent Arrangements. Except as contemplated by this
Agreement, during the Term, each Party shall not (i) transfer (which term shall
include, without limitation, any sale, assignment, gift, pledge, hypothecation
or other disposition), or consent to any transfer of, any or all of such Party's
Shares or any interest therein, or create or, permit to exist any lien or other
encumbrance on such Shares, (ii) enter into any contract, option or other
agreement or understanding with respect to any transfer of any or all of such
Shares or any interest therein, (iii) grant any proxy, power-of-attorney or
other authorization in or with respect to such Shares, (iv) deposit such Shares
into a voting trust or enter into a voting agreement or arrangement with respect
to such Shares, or (v) take any other action that would in any way restrict,
limit or interfere with the performance of its obligations hereunder or the
transactions contemplated hereby or by the Merger Agreement. Notwithstanding the
foregoing, 44,300 of the Shares owned by one of the Parties, Xxxx X.X. Xxxx, are
currently encumbered by a loan to the Company in the aggregate principal amount
of $80,000 and secured by a Stock Pledge Agreement between the Company and Xxxx
X.X. Xxxx (the "Xxxx Stock Pledge Agreement").
SECTION 1.3. Revocation of Prior Proxy and Grant of Proxy. Each Party
hereby revokes any and all prior proxies or powers of attorney in respect of any
of such Party's Shares and constitutes and appoints Merger Sub, or any nominee
of Merger Sub, with full power of substitution and resubstitution, at any time
during the Term, as its true and lawful attorney and proxy (its "Proxy"), for
and in its name, place and stead, to demand that the Secretary of the Company
call a special meeting of the shareholders of the Company for the purpose of
considering any matter referred to in Section 1.1 and to vote each of such
Shares as its Proxy, at every annual, special, adjourned or postponed meeting of
the shareholders of the Company, including the right to sign its name (as
shareholder) to any consent, certificate or other document relating to the
Company that the Washington Business Corporation Act may permit or require as
provided in Section 1.1. Notwithstanding the foregoing, each Party shall be
entitled to receipt of such notices for any such meeting or the execution of any
such consent as required by applicable law or the Company's governing documents.
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THE FOREGOING PROXY AND POWER OF ATTORNEY ARE
IRREVOCABLE AND COUPLED WITH AN INTEREST THROUGHOUT THE TERM.
SECTION 1.4. Rollover; Waiver of Appraisal Rights. Each Party hereby (i)
consents to have its Rollover Shares remain outstanding pursuant to the Merger,
as provided in the Merger Agreement; (ii) waives any rights of appraisal or
rights to dissent from the Merger and (iii) waives any right to receive the Per
Share Amount in respect of the Rollover Shares as a result of the Merger. Any
Party that exercises any option outstanding on the date hereof prior to the
Merger will cause the shares of Company Common Stock issuable upon exercise of
such option to be treated as Rollover Shares for all purposes of the Merger
Agreement, unless such Party shall have received the prior written consent of
Warburg, Xxxxxx Equity Partners, L.P., a Delaware limited partnership
("Warburg"), to have such shares cancelled in the Merger and converted into the
right to receive the Per Share Amount (which consent shall not be unreasonably
withheld, conditioned or delayed).
SECTION 1.5. Stop Transfer. Each Party shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Party's Shares, unless such
transfer is made in compliance with this Agreement (including the provisions of
Article II hereof).
SECTION 1.6. No Solicitation. During the Term, each Party shall not, nor
shall it permit or authorize any of its officers, directors, employees, agents
or representatives (collectively, the "Representatives") to, (i) solicit or
initiate, or encourage, directly or indirectly, any inquiries regarding or the
submission of, any Takeover Proposal, (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any information or data with
respect to, or take any other action to knowingly facilitate the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Takeover Proposal or (iii) enter into any agreement with respect to any Takeover
Proposal or approve or resolve to approve any Takeover Proposal. Upon execution
of this Agreement, each Party shall, and it shall cause its Representatives to,
immediately cease any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing.
Each Party will promptly notify Warburg of the existence of any proposal,
discussion, negotiation or inquiry received by such Party, and each Party will
immediately communicate to Warburg the terms of any proposal, discussion,
negotiation or inquiry which it may receive (and will promptly provide to
Warburg copies of any written materials received by it in connection with such
proposal, discussion, negotiation or inquiry) and the identity of the Person
making such proposal or inquiry or engaging in such discussion or negotiation.
Notwithstanding any provision of this Section 1.6 to the contrary, if any Party
or any of its Representatives is a member of the Board of Directors, such member
of the Board of Directors may take actions in such capacity to the extent
permitted by Section 4.2 of the Merger Agreement.
SECTION 1.7. Disclosure. Each Party hereby authorizes the Company to
publish and disclose in the Proxy Statement (including all documents and
schedules filed with the SEC), its identity and ownership of the Shares and the
nature of its commitments,
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arrangements and understandings under this Agreement as is required or otherwise
mandated by applicable law or regulation.
SECTION 1.8. Post-Merger Arrangements. Each Party agrees to execute and
deliver a Stockholders Agreement, in a mutually agreeable form, and a
Registration Rights Agreement, in a mutually agreeable form, no later than the
date on which the Merger is consummated. Such Stockholders Agreement will
include a right of first refusal and other restrictions on transfer, on terms
mutually agreeable.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF EACH PARTY
Each Party hereby represents and warrants to each other Party as follows:
SECTION 2.1. Due Authorization, etc. Such Party has all requisite power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of such Party. This
Agreement has been duly executed and delivered by or on behalf of such Party and
constitutes a legal, valid and binding obligation of such Party, enforceable
against such Party in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other similar laws and except
that the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding for such
remedy may be brought. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which such Party is trustee whose
consent is required for the execution and delivery of this Agreement or the
consummation by such Party of the transactions contemplated hereby.
SECTION 2.2. No Conflicts; Required Filings and Consents.
(a) The execution and delivery of this Agreement by such Party does not,
and the performance of this Agreement by such Party will not, (i) conflict with
or violate any trust agreement or other similar documents relating to any trust
of which such Party is trustee, (ii) conflict with or violate any law applicable
to such Party or by which such Party or any of such Party's property is bound or
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 become a default) under, or give
to others any rights of termination, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any assets of such Party, including,
without limitation, such Party's Shares, pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Party is a party or by which such Party
or any of such Party's assets is bound or affected, except, in the case of
clauses (ii) and (iii), for any such breaches, defaults or other occurrences
that would not prevent or delay the performance by such Party of such Party's
obligations under this Agreement. Notwithstanding the foregoing, the execution
and delivery of this Agreement by Xxxx X.X. Xxxx is limited by the provisions
contained in the Xxxx Stock Pledge Agreement.
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(b) The execution and delivery of this Agreement by such Party does not,
and the performance of this Agreement by such Party will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority (other than any necessary filings
under the Exchange Act), domestic or foreign, 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 Party of such
Party's obligations under this Agreement. Notwithstanding the foregoing, the
execution and delivery of this Agreement by Xxxx X.X. Xxxx is subject to the
consent of the Company pursuant to the terms of the Xxxx Stock Pledge Agreement.
SECTION 2.3. No Finder's Fees. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of such Party.
Such Party, on behalf of itself and its affiliates, hereby acknowledges that it
is not entitled to receive any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby or by the Merger Agreement.
ARTICLE III.
MISCELLANEOUS
SECTION 3.1. Definitions. Terms used but not otherwise defined in this
Agreement have the meanings ascribed to such terms in the Merger Agreement.
SECTION 3.2. Termination. This Agreement shall terminate and be of no
further force and effect (i) upon the delivery of a written notice by the
holder(s) of Shares representing, in the aggregate, a majority of the Shares set
forth on Schedule I hereto (the "Terminating Party(s)") to each other Party
indicating such Terminating Party(s) decision to terminate this Agreement, (ii)
automatically and without any required action of the Parties upon the Effective
Time or (iii) upon termination of the Merger Agreement in accordance with its
terms. No such termination of this Agreement shall relieve any Party hereto from
any liability for any breach of this Agreement prior to termination.
SECTION 3.3. Further Assurance. From time to time, at another Party's
request and without consideration, each Party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
SECTION 3.4. Certain Events. Each Party agrees that this Agreement and such
Party's obligations hereunder shall attach to such Party's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise, including, without
limitation, such Party's heirs, guardians, administrators, or successors.
Notwithstanding any transfer of such Shares, the transferor shall remain liable
for the performance of all its obligations under this Agreement.
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SECTION 3.5. No Waiver. Any Party may (a) extend the time for the
performance of any of the obligations or other acts of the other Parties hereto,
(b) waive any inaccuracies in the representations and warranties of the other
Parties contained herein or in any document delivered pursuant hereto and (c)
waive compliance by the other Parties with any of their agreements or conditions
contained herein. Any agreement on the part of a Party to any such extension or
waiver shall be valid only as against such Party and only if set forth in an
instrument in writing signed by such Party. 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, 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 3.6. Specific Performance. Each Party acknowledges that if such
Party fails to perform any of its obligations under this Agreement immediate and
irreparable harm or injury would be caused to each other Party for which money
damages would not be an adequate remedy. In such event, each Party agrees that
each other Party shall have the right, in addition to any other rights it may
have, to specific performance of this Agreement. Accordingly, if any Party
should institute an action or proceeding seeking specific enforcement of the
provisions hereof, each Party hereby waives the claim or defense that such other
Party has an adequate remedy at law and hereby agrees not to assert in any such
action or proceeding the claim or defense that such a remedy at law exists. Each
Party further agrees to waive any requirements for the securing or posting of
any bond in connection with obtaining any such equitable relief.
SECTION 3.7. Notice. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile, and (ii) on the third business day after deposit in
the U.S. mail, if mailed by registered or certified mail (postage prepaid,
return receipt requested), in each case to the relevant Party at the address or
facsimile number set forth below such Party's name on Schedule I (or at such
other address for a Party as shall be specified by like notice, except that
notices of changes of address shall be effective upon receipt).
SECTION 3.8. Expenses. Except as otherwise expressly set forth herein or in
the Merger Agreement, all fees, costs and expenses incurred in connection with
this Agreement or the Merger Agreement and the transactions contemplated hereby
and thereby shall be paid by the Party incurring such fees, costs and expenses.
SECTION 3.9. 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 3.10. 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
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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
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 maximum
extent possible.
SECTION 3.11. Entire Agreement; Third-Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes any and all other prior
agreements and undertakings, both written and oral, among the Parties, or any of
them, with respect to the subject matter hereof. This Agreement is not intended
to confer upon any other person any rights or remedies hereunder, except that
each Party acknowledges that the Board of Directors of the Company has relied on
the commitments made by the Parties herein in connection with its approval of
the Merger Agreement and that the Company is intended to be a third party
beneficiary of this Agreement.
SECTION 3.12. Assignment. This Agreement shall not be assigned by operation
of law or otherwise.
SECTION 3.13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed entirely within that State.
SECTION 3.14. Amendment. This Agreement may not be amended except by an
instrument in writing signed by each Party.
SECTION 3.15. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different Parties in separate counterparts, each of
which when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
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IN WITNESS WHEREOF, each Party has caused this Agreement to be executed as
of the date first written above.
WARBURG, XXXXXX EQUITY PARTNERS, L.P.
By: Warburg, Xxxxxx & Co., General Partner
By:
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Name:
Title:
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Xxxx X. X. Xxxx
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Schedule I
Name and Address of Party Number of Number of
Shares Rollover Shares
Beneficially
Owned
Warburg, Xxxxxx Equity Partners, L.P. 9,808,458 9,808,458
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxx
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Xxxx X.X. Xxxx 997,132
0000 Xxxxx Xxxxxx Xxxxx (xxxxxxxxx
Xxxxxxx, XX 00000 options)
Facsimile: 000-000-0000
