VOTING AGREEMENT
EXHIBIT 99.1
This Voting Agreement (the “Agreement”) is made and entered into as of August 27,
2007, between NWC (US) Holdings, Inc., a Delaware corporation (“Acquiror”), and the
undersigned shareholder (“Holder”) of Cost-U-Less, Inc., a Washington corporation
(“Target”).
Pursuant to an Agreement and Plan of Merger dated as of August 27, 2007 (the “Merger
Agreement”) by and among Acquiror, Cougar Acquisition Corporation, a Washington corporation and
wholly owned subsidiary of Acquiror (“Sub”), and Target, Sub is merging with and into
Target (the “Acquisition”) and Target, as the surviving corporation of the Acquisition,
will thereby become a wholly owned subsidiary of Acquiror. In the Acquisition, Target shareholders
will receive $11.75 per share in cash. In order to induce Acquiror to enter into the Merger
Agreement, Target has agreed to use its best efforts to solicit the proxy of certain significant
shareholders of Target on behalf of Acquiror, and to cause certain significant shareholders of
Target to execute and deliver to Acquiror Voting Agreements in the form hereof. The Holder is the
beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) of such number of shares of the outstanding Common Stock, $.001 par
value per share, of Target as is indicated on Schedule A to this Agreement.
In consideration of the execution of the Merger Agreement by Acquiror, Holder agrees not to
transfer or otherwise dispose of any of shares of Common Stock of Target, or any other shares of
capital stock of Target acquired by Holder hereafter and prior to the Expiration Date (as defined
below), and agrees to vote its shares of Common Stock of Target and any other such shares of
capital stock of Target so as to facilitate consummation of the Acquisition.
The parties agree as follows:
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 Holder,
“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 an officer or
director of the Company.
“Alternative Transaction” means (i) any transaction of the type described in 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 reasonably
be expected to hinder, delay, impede, interfere, postpone, discourage, adversely affect or
frustrate the consummation of the transaction 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 controlled 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.
“Subject Shares” means, with respect to Holder, without duplication, (i) the shares of the
outstanding Common Stock, $.001 par value per share, of Target on the date hereof held by Holder as
described on Schedule A, and (ii) any additional shares of Target Common Stock acquired by
Holder or over which Holder acquires Beneficial Ownership from and after the date hereof, whether
pursuant to existing stock option agreements 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 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.
4. Irrevocable Proxy. Concurrently with the execution of this Agreement, Holder agrees
to deliver to Acquiror a proxy in the form attached hereto as Exhibit A (the
“Proxy”), which shall be irrevocable to the extent provided in Section 23B.07.220(4) of the
Washington Business Corporation Act covering the total number of Subject Shares beneficially owned
by Holder set forth therein.
(a) Holder hereby represents, warrants and covenants to Acquiror that Holder (i) is the
beneficial owner of the Subject Shares reflected on Schedule A, which at the date of this
Agreement and at all times up until the Expiration Date will be free and clear of any liens,
claims, options, charges or other encumbrances; (ii) does not beneficially own any shares of
capital stock of Target other than the Subject Shares reflected on Schedule A (excluding
shares as to which Holder currently disclaims beneficial ownership in accordance with applicable
law); and (iii) has full power and authority to make, enter into and carry out the terms of this
Agreement and the Proxy.
(b) Holder hereby represents and warrants that any proxies heretofore given in respect of the
Subject Shares with respect to the matters described in Section 3 hereof are not irrevocable, and
Holder hereby revokes any and all prior proxies with respect to such Subject Shares as they relate
to such matters. Prior to the Expiration Date, Holder shall not directly or indirectly grant any
proxies or powers of attorney with respect to the matters set forth in Section 3 hereof (other than
to Parent), deposit any of the Subject Shares or enter into a voting agreement (other than this
Agreement) with respect to any of the Subject Shares relating to any matter described in Section 3.
(c) Holder shall not, and shall cause its Affiliates and its and their authorized
representatives not to, directly or indirectly, (i) solicit, initiate or knowingly encourage any
proposal that constitutes, or could reasonably be expected to lead
to, an Alternative Transaction, (ii) participate or engage in discussions or negotiations with, or
disclose or provide any non-public information relating to Holder, Target, Target’s subsidiaries,
Parent or Merger Sub or this Agreement or the Merger Agreement and the transactions contemplated
hereby and thereby to, or afford access to any of the
properties, books or records of Holder,
Target or Target’s subsidiaries to, any Person with respect to any Alternative Transaction, (iii)
approve, endorse, recommend or vote for (or consent to) any Alternative Transaction or (iv) enter
into any agreement or agreement in principle with any Person with respect to an Alternative
Transaction. Notwithstanding anything to the contrary contained in this Agreement, (i) the
provisions of this Agreement apply solely to Holder when acting in his or its capacity as a
shareholder of Target and not when acting or purporting to act as a representative or an officer or
director of Target (it being understood that Target has separate and independent obligations to
Parent and Merger Sub under the Merger Agreement, including, without limitation, Section 5.2
thereof); and (ii) none of the provisions of this Agreement shall be construed to prohibit, limit
or restrict Holder from exercising Holder’s fiduciary duties to Target and/or its shareholders by
voting or taking any other action whatsoever in Holder’s capacity as a director or officer of
Target.
(d) Holder understands and acknowledges that Parent is entering into the Merger Agreement in
reliance upon Holder’s execution, delivery and performance of this Agreement.
(a) Amendments and Waivers. Any term of this Agreement may be amended or waived with
the written consent of the parties or their respective successors and assigns. Any amendment or
waiver effected in accordance with this Section 9(a) shall be binding upon the parties and their
respective successors and assigns.
(b) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of Washington, without
giving effect to principles of conflicts of law.
(c) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.
(d) Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
(e) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight
delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the
regular mail as certified or registered mail (airmail if sent internationally) with postage
prepaid, if such notice is addressed to the party to be notified at such party’s address or
facsimile number as set forth below, or as subsequently modified by written notice.
(f) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith,
in order to maintain the economic position enjoyed by each party as close as possible to that under
the provision rendered unenforceable. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded
from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision
were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its
terms.
(g) Covenants of Acquiror. In order to induce Holder to enter into this Voting
Agreement and the Proxy, Acquiror agrees that:
(i) it will not acquire any shares of Target unless it acquires all of the shares of
Holder; and
(ii) Holder will receive the highest price per share that Acquiror pays for any shares
in the Acquisition.
The parties have caused this Agreement to be duly executed on the date first above written.
ACQUIROR | ||||
NWC (US) Holdings, Inc. | ||||
By: | ||||
Name: | ||||
(print) | ||||
Title: | ||||
Address: | ||||
[NAME] | ||||
By: | ||||
Name: | ||||
(print) | ||||
Title: | ||||
Holder’s Address for Notice: | ||||
SCHEDULE A
Shares beneficially owned
Class of Shares | Number | |
EXHIBIT A
IRREVOCABLE PROXY
TO VOTE STOCK OF
COST-U-LESS, INC.
The undersigned shareholder of Cost-U-Less, Inc., a Washington corporation (“Target”),
hereby irrevocably (to the full extent permitted by Section 23B.07.220(4) of the Washington
Business Corporation Act) appoints the members of the Board of Directors of NWC (US) Holdings,
Inc., a Delaware corporation (“Acquiror”), and each of them, as the sole and exclusive
attorneys and proxies of the undersigned, with full power of substitution and resubstitution, to
vote and exercise all voting and related rights (to the full extent that the undersigned is
entitled to do so) with respect to all of the shares of capital stock of Target that now are or
hereafter may be beneficially owned by the undersigned, and any and all other shares or securities
of Target issued or issuable in respect thereof on or after the date hereof (collectively, the
“Shares”) in accordance with the terms of this Proxy. The Shares beneficially owned by the
undersigned shareholder of Target as of the date of this Proxy are listed on the final page of this
Proxy. Upon the undersigned’s execution of this Proxy, any and all prior proxies given by the
undersigned with respect to any Shares are hereby revoked and the undersigned agrees not to grant
any subsequent proxies with respect to the Shares until after the expiration Date (as defined
below).
This Proxy is granted pursuant to that certain Voting Agreement of even date herewith, by and
among Acquiror and the undersigned shareholder (the “Voting Agreement”), and is granted in
consideration of Acquiror entering into that certain Agreement and Plan of Merger, of even date
herewith, by and among Target, Acquiror and Cougar Acquisition Corporation, a Washington
corporation (“Sub”) and wholly owned subsidiary of Acquiror (the “Merger
Agreement”). The Agreement provides for the merger of Sub with and into Target (the
“Acquisition”). As used herein, the term “Expiration Date” shall have the meaning
set forth in Section 8 of the Voting Agreement.
The attorneys and proxies named above, and each of them, are hereby authorized and empowered
by the undersigned, at any time prior to the Expiration Date, to act as the undersigned’s attorney
and proxy to vote the Shares, and to exercise all voting and other rights of the undersigned with
respect to the Shares, at every annual, special or adjourned meeting of the shareholders of Target
and in every written consent in lieu of such meeting (i) in favor of approval of the Acquisition
and the Merger Agreement and in favor of any matter that could reasonably be expected to facilitate
the Acquisition, and (ii) against any proposal for any recapitalization, merger, sale of assets or
other business combination (other than the Acquisition) between Target and any person or entity other
than Acquiror or any other action or agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of Target under the Merger Agreement or which could
result in any of the conditions to Target’s obligations under the Merger Agreement not being
fulfilled. The attorneys and proxies named above may not exercise this Proxy on any other matter
except as provided above. The undersigned shareholder may vote the Shares on all other matters.
Any obligation of the undersigned hereunder shall be binding upon the successors and assigns
of the undersigned.
This Proxy is irrevocable (to the extent provided in Section 23B.07.220(4) of the Washington
Business Corporation Act).
Dated: August , 2007
(Signature of Holder) | ||
(Print Name of Holder) |
Shares beneficially owned: | ||||
Class of Shares | Number | |||