VOTING AGREEMENT
Voting Agreement (this "AGREEMENT"), dated as of April 21, 2003, by and
among VBR HOLDING CORPORATION, a Delaware corporation ("PARENT"), and the
stockholder(s) listed on the signature pages hereto (the "STOCKHOLDER").
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Parent, VB Merger Corporation, a Delaware corporation ("MERGER SUB"),
and Varsity Brands, Inc., a Delaware corporation (the "COMPANY"), are entering
into an Agreement and Plan of Merger, dated as of the date hereof (the "MERGER
Agreement"), providing, among other things, for the merger of Merger Sub with
and into the Company with the Company continuing as the surviving corporation
and wholly owned subsidiary of Parent (the "MERGER"); and
WHEREAS, as of the date hereof, the Stockholder is the Beneficial Owner
(as defined below) of, and has the sole right to vote and dispose of that number
of shares of common stock, par value $0.01 per share (the "COMPANY SHARES"), of
the Company set forth beside the Stockholder's name on Schedule A hereto; and
WHEREAS, concurrently with the execution of the Merger Agreement, and
as a condition to Merger Sub and Parent entering into the Merger Agreement and
incurring the obligations set forth therein, Parent has required that the
Stockholder enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used but not defined in this Agreement are used in
this Agreement with the meanings given to such terms in the Merger Agreement. In
addition, for purposes of this Agreement:
"AFFILIATE" means, with respect to any specified Person, any Person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified. For
purposes of this Agreement, with respect to the Stockholder, "AFFILIATE" shall
not include the Company and the Persons that directly, or indirectly through one
or more intermediaries, are controlled by the Company. For the avoidance of
doubt, no officer or director of the Company shall be deemed an Affiliate of
another officer or director of the Company by virtue of his or her status as a
director or officer of the Company.
"ALTERNATIVE TRANSACTION" means (i) any transaction of the type
described in clauses (a) through (d) of the definition of Acquisition Proposal
contained in the Merger Agreement other than the transactions contemplated by
the Merger Agreement and (ii) any other action, agreement or transaction that
would result in a breach of any representation, warranty, covenant or other
obligation or agreement of the Company contained in the Merger Agreement (or of
Stockholder contained in this Agreement) or that might hinder, delay, impede or
frustrate the consummation of the transactions contemplated by the Merger
Agreement.
"BENEFICIALLY OWNED" or "BENEFICIAL OWNERSHIP" with respect to any
securities means having beneficial ownership of such securities (as determined
pursuant to Rule 13d-3 under the Exchange Act, disregarding the phrase "within
60 days" in paragraph (d)(1)(i) thereof), including pursuant to any agreement,
arrangement or understanding, whether or not in writing. Without duplicative
counting of the same securities, securities Beneficially Owned by a Person shall
include securities Beneficially Owned by (i) all Affiliates of such Person, and
(ii) all other Persons with whom such Person would constitute a "Group" within
the meaning of Section 13(d) of the Exchange Act and the rules promulgated
thereunder.
"BENEFICIAL OWNER" with respect to any securities means a Person that
has Beneficial Ownership of such securities.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization, including
any Governmental Entity (as defined in the Merger Agreement).
"SUBJECT SHARES" means, with respect the Stockholder, without
duplication, (i) Company Shares owned by the Stockholder on the date hereof as
described on Schedule A hereto, (ii) any additional Company Shares acquired by
the Stockholder or over which it acquires Beneficial Ownership, whether pursuant
to existing stock option agreements or otherwise, (iii) any Equity Interests of
any Person that the Stockholder is or becomes entitled to receive by reason of
being a holder of any of the Subject Shares, and (iv) any Equity Interests or
other property into which any of such Subject Shares shall have been or shall be
converted or changed, whether by amendment to the certificate of incorporation
of the Company, merger, consolidation, reorganization, reclassification, capital
change or otherwise.
"TRANSFER" means, with respect to a security, the sale, transfer,
pledge, hypothecation, encumbrance, assignment or disposition of such security
or the Beneficial Ownership thereof, the offer to make such a sale, transfer or
other disposition, and each option, agreement, arrangement or understanding,
whether or not in writing, to effect any of the foregoing. As a verb, "TRANSFER"
shall have a correlative meaning.
2
ARTICLE II
COVENANTS OF THE STOCKHOLDER
Section 2.1 AGREEMENT TO VOTE. The Stockholder agrees as follows:
(a) At any meeting of the stockholders of the Company held prior
to the Expiration Date (as defined in Section 5.13), however
called, and at every adjournment or postponement thereof prior
to the Expiration Date, or in connection with any written
consent of, or any other action by, the stockholders of the
Company given or solicited prior to the Expiration Date,
Stockholder shall vote, or provide a consent with respect to,
all of the Subject Shares entitled to vote or to consent
thereon (a) in favor of approval of adoption of the Merger
Agreement and the transactions contemplated thereby, and any
actions required in furtherance thereof and (b) against any
Alternative Transaction.
(b) Stockholder shall not enter into any agreement or
understanding with any Person prior to the Expiration Date
directly or indirectly to vote, grant any proxy or give
instructions with respect to the voting of, the Subject
Shares.
Section 2.2 REVOCATION OF PROXIES; COOPERATION.The Stockholder agrees
as follows:
(a) Stockholder agrees to the duties of the Stockholder under this
Agreement.
(b) Stockholder hereby represents and warrants that any proxies
heretofore given in respect of the Subject Shares are not
irrevocable and Stockholder hereby revokes any and all prior
proxies with respect to such Subject Shares. Prior to the
Expiration Date, Stockholder shall not directly or indirectly
grant any proxies or powers of attorney with respect to the
matters set forth in Section 2.1, deposit any of the Subject
Shares or enter into a voting agreement (other than this
Agreement) with respect to any of the Subject Shares.
(c) At the Company's expense, Stockholder will (a) use all
reasonable efforts to cooperate with the Company and Merger
Sub in connection with the transactions contemplated by the
Merger Agreement, (b) promptly take such actions as are
necessary or appropriate to consummate such transactions, and
(c) provide any information reasonably requested by the
Company and Merger Sub for any regulatory application or
filing made or approval sought for such transactions.
(d) Stockholder will take all action necessary to (i) permit the
Subject Shares to be acquired in the Merger, (ii) vote such
shares in accordance with the terms of this Agreement, and
(iii) prevent creditors in respect of any pledge of such
shares from exercising their rights under such pledge.
3
Section 2.3 NO SOLICITATION. Stockholder agrees that:
(a) Stockholder shall not, and shall cause its Affiliates and its
and their Representatives (as defined in the Merger Agreement)
not to, directly or indirectly, (i) solicit, initiate,
encourage or take any other action to facilitate the
submission of any Acquisition Proposal or other proposal
related to an Alternative Transaction, (ii) participate or
engage in discussions or negotiations with, or disclose or
provide any non-public information relating to the Company or
its Subsidiaries to, any Person with respect to, or take any
other action knowingly to facilitate, any inquiries or the
making of any proposal that constitutes, that would reasonably
be expected to lead to any Acquisition Proposal or any
Alternative Transaction, (iii) approve, endorse or recommend
any Acquisition Proposal or Alternative Transaction or (iv)
enter into any agreement or agreement in principle, letter of
intent or similar document contemplating or otherwise relating
to any Acquisition Proposal or Alternative Transaction.
(b) Stockholder shall not enter into any agreement with any Person
that provides for, or could reasonably be expected to
materially facilitate or is designed to facilitate, an
Acquisition Proposal.
(c) Notwithstanding anything to the contrary contained in this
Agreement: (i) the provisions of this Agreement apply solely
to the Stockholder when acting in his or its capacity as a
Stockholder of the Company and not when acting or purporting
to act as a representative or an officer or director of the
Company (it being understood that the Company has separate and
independent obligations to Parent and Merger Sub under Section
6.2 of the Merger Agreement); (ii) none of the provisions of
this Agreement shall be construed to prohibit, limit or
restrict the Stockholder or any of its representatives (A) who
is a member of the Board of Directors of the Company from
exercising his fiduciary duties to the Company by voting or
taking any other action whatsoever in his capacity as a
director or (B) who is an officer or employee of the Company
from taking any action whatsoever in such capacity; and (iii)
no action taken by the Company in compliance with the
covenants of the Merger Agreement in respect of any
Acquisition Proposal shall serve as the basis of a claim that
the Stockholder is in breach of its obligations hereunder
notwithstanding the fact that the Stockholder or its
representatives have provided advice or assistance to the
Company in connection therewith.
Section 2.4 NO TRANSFER OF SUBJECT SHARES; PUBLICITY. Stockholder
agrees that:
(a) During the term of this Agreement, Stockholder shall not (i)
subject any of the Subject Shares to, or suffer to exist on
any of the Subject Shares, any Lien (as defined in the Merger
Agreement) or (ii) Transfer or agree to Transfer any of the
Subject Shares (other than by operation of the Merger) or
4
grant any proxy or power-of-attorney with respect to any of
the Subject shares.
(b) Unless required by applicable law, neither Stockholder nor any
of its Affiliates or Representatives shall make any press
release or public announcement with respect to the business or
affairs of the Company, Parent or Merger Sub, including this
Agreement and the Merger Agreement and the transactions
contemplated hereby and thereby, without the prior written
consent of Parent.
2.5 NO APPRAISAL. Stockholder agrees not to make a written demand for
appraisal in respect of the Subject Shares in accordance with Section 262 of the
Delaware General Corporation Law in connection with the Merger.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS
OF THE STOCKHOLDER
Stockholder represents, warrants and covenants to Merger Sub that:
Section 3.1 OWNERSHIP. Stockholder is the sole Beneficial
Owner and legal owner of the Subject Shares identified on Schedule A hereto and
such shares constitute all of the capital stock of the Company Beneficially
Owned by Stockholder. Stockholder has good and marketable title to all of such
shares, free and clear of all Liens, claims, options, proxies, voting agreements
and security interests and has the sole right to such Subject Shares and there
are no restrictions on rights of disposition or other Liens pertaining to such
Subject Shares, except as described on Schedule A. None of the Subject Shares is
subject to any voting trust or other contract with respect to the voting
thereof, and no proxy, power of attorney or other authorization has been granted
with respect to any of such Subject Shares.
Section 3.2 AUTHORITY AND NON-CONTRAVENTION.
(a) If Stockholder is a corporation, Stockholder is a corporation
duly organized, validly existing and in good standing under
the Laws of its jurisdiction of organization.
(b) Assuming due authorization, execution and delivery of this
Agreement by Parent, this Agreement has been duly and validly
executed and delivered by Stockholder and constitutes the
legal, valid and binding obligation of Stockholder,
enforceable against Stockholder in accordance with its terms
except (i) to the extent limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights and
(ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought. Stockholder has all
necessary power, authority and legal capacity to execute and
deliver this Agreement and to perform its obligations under
5
this Agreement and no other proceedings or actions on the part
of Stockholder are necessary to authorize the execution,
delivery or performance of this Agreement or the consummation
of the transactions contemplated hereby. If Stockholder is a
corporation, such actions have been duly authorized and
approved by all necessary corporate action of Stockholder.
(c) Stockholder is not nor will it be required to make any filing
with or give any notice to, or to obtain any consent from, any
Person in connection with the execution, delivery or
performance of this Agreement or obtain any Permit from any
Governmental Entity for any of the transactions contemplated
hereby, except as may be required by Section 13 or Section 16
of the Securities Exchange Act of 1934, as amended, and the
rules promulgated thereunder.
(d) Neither the execution and delivery of this Agreement by
Stockholder nor the consummation of the transactions
contemplated hereby will directly or indirectly (whether with
notice or lapse of time or both) (i) in the event Stockholder
is a corporation, conflict with, result in any violation of or
require any consent under any provision of the governing
documents of Stockholder, (ii) conflict with, result in any
violation of, require any consent under or constitute a
default by Stockholder under any mortgage, bond, indenture,
agreement, instrument or obligation to which Stockholder is a
party or by which it or any of Stockholder's assets (including
the Subject Shares) are bound, or violate any Permit of any
Governmental Entity, or any Law or order to which such
Stockholder, or any of its assets (including the Subject
Shares), may be subject, or (iii) result in the imposition or
creation of any Lien upon or with respect to any of the assets
owned or used by Stockholder (including the Subject Shares).
Section 3.3 TOTAL SHARES. Except as set forth on Schedule A hereto,
Stockholder, except with respect to stock options disclosed pursuant to the
Merger Agreement, is not the Beneficial Owner of, and does not have (whether
currently, upon lapse of time, following the satisfaction of any conditions,
upon the occurrence of any event or any combination of the foregoing) any right
to acquire, and has no other interest in or voting rights with respect to, any
Company Shares or any securities convertible into or exchangeable or exercisable
for Company Shares.
Section 3.4. RELIANCE. Stockholder understands and acknowledges that
Parent is entering into the Merger Agreement in reliance upon Stockholder's
execution, delivery and performance of this Agreement.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARENT
Parent represents, warrants and covenants to the Stockholder that,
assuming due authorization, execution and delivery of this Agreement by the
Stockholder, this Agreement constitutes the legal, valid and binding obligation
6
of Parent, enforceable against Parent in accordance with its terms except (i) to
the extent limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. Parent has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution
and delivery by Parent of this Agreement and the consummation by Parent of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Parent and no other corporate proceedings on the part of
Parent are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 NO OWNERSHIP INTEREST. Nothing contained in this Agreement
shall be deemed to vest in Parent any direct or indirect ownership or incidents
of ownership of or with respect to the Subject Shares. All rights, ownership and
economic benefits of and relating to the Subject Shares shall remain and belong
to the Stockholder, and Parent shall have no authority to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of the Company or exercise any power or authority to direct the
Stockholder in the voting of any of the Subject Shares, except as otherwise
expressly provided herein or in the Merger Agreement.
Section 5.2 NOTICES. All notices, consents, waivers and other
communications under this Agreement shall be in writing (including facsimile or
similar writing) and shall be given:
(a) If to Parent, to:
Xxxxxxx Xxxxx & Partners, L.P.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx
Facsimile No.: 310-954-0404
With a copy (which will not constitute notice) to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile No.: 000-000-0000
7
(b) If to a Stockholder, to Stockholder's address set forth on Schedule
A hereto.
or such other address or facsimile number as a party may hereafter specify for
the purpose by notice to the other parties hereto. Each notice, consent, waiver
or other communication under this Agreement shall be effective only (a) if given
by facsimile, when the facsimile is transmitted to the facsimile number
specified in this Section and the appropriate facsimile confirmation is received
or (b) if given by overnight courier or personal delivery when delivered at the
address specified in this Section.
Section 5.3 FURTHER ACTIONS. Upon the request of any party to this
Agreement, the other party will (a) furnish to the requesting party any
additional information, (b) execute and deliver, at their own expense, any other
documents and (c) take any other actions as the requesting party may reasonably
require to more effectively carry out the intent of this Agreement.
Section 5.4 ENTIRE AGREEMENT AND MODIFICATION. This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to its subject matter and
constitutes (along with the documents delivered pursuant to this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended,
supplemented or otherwise modified except in a written document executed by the
party against whose interest the modification will operate.
Section 5.5 DRAFTING AND REPRESENTATION. The parties agree that the
terms and language of this Agreement were the result of negotiations between the
parties and, as a result, there shall be no presumption that any ambiguities in
this Agreement shall be resolved against any party. Any controversy over
construction of this Agreement shall be decided without regard to events of
authorship or negotiation.
Section 5.6 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
affecting the validity or enforceability of the remaining provisions hereof. Any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. If any provision
of this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
Section 5.7 NO THIRD-PARTY RIGHTS. Stockholder may not assign any of
its rights or delegate any of its obligations under this Agreement without the
prior written consent of Parent. Parent may not assign any of its rights or
delegate any of its obligations under this Agreement with respect to Stockholder
without the prior written consent of Stockholder; PROVIDED, that Parent may
assign its rights and delegate its obligations hereunder to any Person
wholly-owned, directly or indirectly, by Green Equity Investors III, L.P. This
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of each of respective successors, personal or legal representatives,
heirs, distributes, devisees, legatees, executors, administrators and permitted
assigns of the Stockholder and the successors and permitted assigns of Parent.
8
Nothing expressed or referred to in this Agreement will be construed to give any
Person, other than the parties to this Agreement, any legal or equitable right,
remedy or claim under or with respect to this Agreement or any provision of this
Agreement except such rights as may inure to a successor or permitted assignee
under this Section.
Section 5.8 ENFORCEMENT OF AGREEMENT. Stockholder acknowledges and
agrees that Parent could be damaged irreparably if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that any
breach of this Agreement by Stockholder could not be adequately compensated by
monetary damages. Accordingly, Stockholder agrees that, (a) it will waive, in
any action for specific performance, the defense of adequacy of a remedy at Law,
and (b) in addition to any other right or remedy to which Parent may be
entitled, at Law or in equity, Parent will be entitled to enforce any provision
of this Agreement by a decree of specific performance and to temporary,
preliminary and permanent injunctive relief to prevent breaches or threatened
breaches of any of the provisions of this Agreement, without posting any bond or
other undertaking.
Section 5.9 WAIVER. The rights and remedies of the parties to this
agreement are cumulative and not alternative. Neither any failure nor any delay
by a party in exercising any right, power or privilege under this Agreement or
any of the documents referred to in this Agreement will operate as a waiver of
such right, power or privilege, and no single or partial exercise of any such
right, power or privilege will preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power or
privilege. To the maximum extent permitted by applicable Law, (a) no claim or
right arising out of this Agreement or any of the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in a written document signed by the
other party, (b) no waiver that may be given by a party will be applicable
except in the specific instance for which it is given, and (c) no notice to or
demand on one party will be deemed to be a waiver of any obligation of that
party or of the right of the party giving such notice or demand to take further
action without notice or demand as provided in this Agreement or the documents
referred to in this Agreement.
Section 5.10 GOVERNING LAW. This Agreement will be governed by and
construed under the Laws of the State of Delaware applicable to contracts made
and to be performed entirely in such State.
Section 5.11 CONSENT TO JURISDICTION. Except as otherwise expressly
provided in this Agreement, the parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought exclusively in the Court of Chancery of the State of
Delaware, County of New Castle or, if such court does not have jurisdiction over
the subject matter of such proceeding or if such jurisdiction is not available,
in the United States District Court for the District of Delaware, and each of
the parties hereby consents to the exclusive jurisdiction of those courts (and
of the appropriate appellate courts therefrom) in any suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by Law, any objection
9
which it may now or hereafter have to the laying of the venue of any suit,
action or proceeding in any of those courts or that any suit, action or
proceeding which is brought in any of those courts has been brought in an
inconvenient forum. Process in any suit, action or proceeding may be served on
any party anywhere in the world, whether within or without the jurisdiction of
any of the named courts. Without limiting the foregoing, each party agrees that
service of process on it by notice as provided in Section 5.2 shall be deemed
effective service of process. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 5.12 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same instrument.
Section 5.13 TERMINATION. This Agreement shall terminate upon the
earliest of (a) the Effective Time (as defined in the Merger Agreement), (b) the
termination of the Merger Agreement in accordance with Section 10.1 thereof, or
(c) written notice by Parent to the Stockholder of the termination of this
Agreement (the earliest of the events described in clauses (a), (b) and (c), the
"EXPIRATION DATE").
Section 5.14 EXPENSES. Except as otherwise provided 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 such
expenses. Nothing in this Agreement shall be deemed to limit the obligations of
the Company pursuant to Section 10.2 of the Merger Agreement.
Section 5.15 HEADINGS; CONSTRUCTION. 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. In this Agreement (a) words
denoting the singular include the plural and vice versa, (b) "it" or "its" or
words denoting any gender include all genders, (c) the word "including" shall
mean "including without limitation," whether or not expressed, (d) any reference
herein to a Section, Article, Paragraph, Clause or Schedule refers to a Section,
Article, Paragraph or Clause of or a Schedule to this Agreement, unless
otherwise stated, and (e) when calculating the period of time within or
following which any act is to be done or steps taken, the date which is the
reference day in calculating such period shall be excluded and if the last day
of such period is not a Business Day (as defined in the Merger Agreement), then
the period shall end on the next day which is a Business Day.
[Signature Page Follows]
10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
VBR HOLDING CORPORATION
By:________________________
Name: __________________
Title:__________________
Stockholder
By:________________________
11
SCHEDULE A
NAME AND
ADDRESS OF STOCKHOLDER COMPANY SHARES OTHER COMPANY SECURITIES
---------------------- -------------- ------------------------
12
