VOTING AGREEMENT
This VOTING AGREEMENT (this "AGREEMENT") is entered into as of June 13, 2007, by
and among Xxxxxx Group Acquisitions, LLC, a Delaware limited liability company
("PARENT"), Xxxxxx Group Acquisitions, Inc., a Delaware corporation ("MERGER
SUB"), and Aquamarine Capital Management, LLC, on behalf of itself, its funds
and managed accounts (the "STOCKHOLDER").
W I T N E S S E T H:
WHEREAS, as of the date of this Agreement, the Stockholder beneficially
owns, in the aggregate, 127,993 shares of Common Stock, par value $0.002 per
share (the "COMMON STOCK"), of Everlast Worldwide Inc., a Delaware corporation
(the "COMPANY");
WHEREAS, the Company, Parent and Merger Sub have entered into an
Agreement and Plan of Merger, dated as of June 1, 2007, as the same may be
amended (the "MERGER AGREEMENT"), pursuant to which Merger Sub will merge with
and into the Company and the Company will continue its existence as the
surviving corporation (the "MERGER"), and each share of Common Stock will be
converted into the right to receive cash in accordance with the terms of the
Merger Agreement; and
WHEREAS, as a condition to the willingness of Parent and Merger Sub to
enter into the Merger Agreement, and as an inducement and in consideration
therefor, Parent and Merger Sub have required that the Stockholder agrees, and
the 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 in
this Agreement, the parties, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms. For purposes of this Agreement, terms used
in this Agreement that are defined in the Merger Agreement but not in this
Agreement shall have the respective meanings ascribed to them in the Merger
Agreement.
SECTION 1.2 Other Definitions. For purposes of this Agreement:
(a) "COMPANY OPTIONS" means options to acquire Common Stock granted to
the Stockholder by the Company.
(b) "NEW SHARES" means any shares of capital stock of the Company
(other than Owned Shares) over which the Stockholder acquires beneficial
ownership at any time from and after the date of this Agreement through the
termination of the Voting Period (including Option Shares).
(c) "OPTION SHARES" means any shares of Common Stock issued or issuable
upon the exercise of Company Options.
(d) "OWNED SHARES" means all of the shares of Common Stock beneficially
owned by the Stockholder as of the date of this Agreement. The Owned Shares
consist of 127,993 shares of Common Stock held by the Stockholder. In the event
of a stock dividend or distribution, or any change in the Common Stock by reason
of any stock dividend or distribution, split-up, recapitalization, combination,
exchange of shares or the like, the "OWNED SHARES" shall be deemed to refer to
and include the Owned Shares (as defined in the first sentence of this
paragraph) as well as all stock dividends and distributions and any securities
into which or for which any or all of those Owned Shares may be changed or
exchanged or which are received in the transaction.
(e) "PERMITTED TRANSFEREE" means, with respect to the Stockholder, any
of the following persons: (i) a trust of which there are no principal
beneficiaries other than the Stockholder, and (ii) any charitable foundation or
similar charitable organization founded and controlled by the Stockholder (and
which remains under the control of the Stockholder).
(f) "REPRESENTATIVE" means, with respect to any particular person, any
director, officer, employee, accountant, consultant, legal counsel, investment
banker, advisor, agent or other representatives of that person.
(g) "TRANSFER" means sell, transfer, tender, pledge, encumber,
hypothecate, assign or otherwise dispose, by operation of law or otherwise. For
purposes of this Agreement, the Transfer of any Company Option shall be deemed a
Transfer of the shares issuable upon the exercise thereof.
(h) "VOTING PERIOD" means the period from and including the date of
this Agreement through and including the earlier to occur of (i) the Effective
Time and (ii) the termination of the Merger Agreement in accordance with the
terms thereof.
ARTICLE II
VOTING AGREEMENT AND IRREVOCABLE PROXY
SECTION 2.1 AGREEMENT TO VOTE.
(a) The Stockholder hereby agrees that, during the Voting Period, it
shall vote or execute consents, as applicable, with respect to the Owned Shares
and any New Shares beneficially owned by the Stockholder as of the applicable
record date (or cause to be voted or a consent to be executed with respect to
the Owned Shares and any New Shares beneficially owned by the Stockholder as of
the applicable record date) in favor of the approval of the Merger Agreement,
the Merger and the Transactions at any meeting (or any adjournment or
postponement thereof) of, or in connection with any proposed action by written
consent of, the holders of any class or classes of capital stock of the Company
at or in connection with which any of such holders vote or execute consents with
respect to any of the foregoing matters.
(b) The Stockholder hereby agrees that, during the Voting Period, the
Stockholder shall vote or execute consents, as applicable, with respect to the
Owned Shares and any New Shares beneficially owned by the Stockholder as of the
applicable record date (or cause to be voted or a consent to be executed with
respect to the Owned Shares and any New Shares beneficially owned by the
Stockholder as of the applicable record date) against each of the
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matters set forth in clauses (i) or (ii) below at any meeting (or any
adjournment or postponement thereof) of, or in connection with any proposed
action by written consent of, the holders of any class or classes of capital
stock of the Company at or in connection with which any of such holders vote or
execute consents with respect to any of the following matters:
(i) any action, proposal, transaction or agreement involving the
Company or any of its subsidiaries that would reasonably be expected
to, in any material respect, prevent, impede, frustrate, interfere
with, delay, postpone or adversely affect the Merger or the other
Transactions; or
(ii) any Acquisition Proposal, other than an Acquisition Proposal
made by Parent.
(c) Any vote required to be cast or consent required to be executed
pursuant to this SECTION 2.1 shall be cast or executed in accordance with the
applicable procedures relating thereto so as to ensure that it is duly counted
for purposes of determining that a quorum is present (if applicable) and for
purposes of recording the results of that vote or consent. Nothing contained in
this SECTION 2.1 shall require the Stockholder to vote or execute any consent
with respect to any Option Shares on or not issued upon the exercise of a
Company Option on or prior to the applicable record date for that vote or
consent.
(d) Except as set forth in clauses (a) and (b) of this SECTION 2.1, the
Stockholder shall not be restricted from voting in favor of, against or
abstaining with respect to any matter presented to the stockholders of the
Company. In addition, nothing in this Agreement shall give Parent the right to
vote any Owned Shares at any meeting of the Stockholder other than as provided
in this SECTION 2.1.
SECTION 2.2 GRANT OF IRREVOCABLE PROXY. The Stockholder hereby
irrevocably appoints Parent as the Stockholder's proxy and attorney-in-fact,
with full power of substitution and resubstitution, to vote or execute consents
during the Voting Period, with respect to the Owned Shares and any New Shares
beneficially owned by the Stockholder, solely in respect of the matters
described in, and in accordance with, SECTION 2.1. This proxy is given to secure
the performance of the duties of the Stockholder under this Agreement. The
Stockholder shall not directly or indirectly grant any person any proxy
(revocable or irrevocable), power of attorney or other authorization with
respect to any of the Owned Shares or New Shares that is inconsistent with
SECTIONS 2.1 and 2.2.
SECTION 2.3 NATURE OF IRREVOCABLE PROXY. The proxy and power of
attorney granted pursuant to SECTION 2.2 by the Stockholder shall be irrevocable
during the Voting Period, 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 the Stockholder, and the Stockholder acknowledges that
the proxy constitutes an inducement for Parent and Merger Sub to enter into the
Merger Agreement. The power of attorney granted by each of the Stockholder is a
durable power of attorney and shall survive the bankruptcy, death or incapacity
of the Stockholder. The proxy and power of attorney granted hereunder shall
terminate automatically at the expiration of the Voting Period.
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ARTICLE III
COVENANTS
SECTION 3.1 TRANSFER RESTRICTIONS. The Stockholder agrees that it shall
not, and shall not permit any person, directly or indirectly, to:
(a) Transfer any or all of the Owned Shares or New Shares beneficially
owned by the Stockholder; PROVIDED, that the foregoing shall not prevent (i) the
Transfer of Owned Shares or New Shares to any Permitted Transferee who executes
and delivers to Parent an agreement to be bound by the terms of this Agreement
to the same extent as the Stockholder, or (ii) the conversion of such Owned
Shares and New Shares into the right to receive Merger Consideration pursuant to
the Merger in accordance with the terms of the Merger Agreement; or
(b) deposit any Owned Shares or New Shares beneficially owned by the
Stockholder in a voting trust or subject any of such Owned Shares or New Shares
beneficially owned by the Stockholder to any arrangement or agreement with any
person (other than Parent) with respect to the voting or the execution of
consents with respect to any such Owned Shares or New Shares that would
reasonably be expected to restrict the Stockholder's ability to comply with and
perform the Stockholder' s covenants and obligations under this Agreement.
SECTION 3.2 NO SHOP OBLIGATIONS OF THE STOCKHOLDER. Subject to SECTION
3.3, the Stockholder covenants and agrees with Parent that, during the Voting
Period, it shall not and shall not authorize any of its Representatives to,
directly or indirectly, (i) initiate, solicit, encourage, or knowingly
facilitate any inquiry, proposal or offer, or the making, submission or
reaffirmation of any inquiry, proposal or offer (including any proposal or offer
to the Company's stockholders), that constitutes or would reasonably be expected
to lead to any Acquisition Proposal, or (ii) engage in any discussions or
negotiations concerning an Acquisition Proposal.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Parent and Merger Sub
as follows:
SECTION 4.1 AUTHORIZATION. The Stockholder has all legal capacity,
power and authority to execute and deliver this Agreement and to perform the
Stockholder's obligations hereunder. This Agreement has been duly executed and
delivered by the Stockholder and constitutes a legal, valid and binding
obligation of the Stockholder, enforceable against the Stockholder in accordance
with its terms.
SECTION 4.2 OWNERSHIP OF SHARES. The Stockholder is the sole beneficial
owner of all of the Stockholder's Owned Shares and Option Shares and has, or
will have at the time of any vote with respect to the matters contemplated by
ARTICLE II, the sole power to vote (or cause to be voted or consents to be
executed) and to dispose of (or cause to be disposed of) all of such Owned
Shares and, upon their issuance, Option Shares. The Stockholder does not own or
hold any right to acquire any additional shares of any class of capital stock of
the Company or other securities of the Company or any interest therein or any
voting rights with respect to any securities of the Company. None of the
Stockholder's Owned Shares and Option Shares are
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subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding to which the Stockholder is a party restricting or
otherwise relating to the voting or Transfer of the Stockholder's Owned Shares
or Option Shares. The Stockholder has good and valid title to the Stockholder's
Owned Shares and Company Options, free and clear of any and all Encumbrances.
SECTION 4.3 NO CONFLICTS. Except (a) for a filing of a Schedule 13D or
Schedule 13G or an amendment thereto, and (b) for a filing of a Form 4 or Form 5
as required by the Exchange Act, (i) 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 the Stockholder or the performance by the
Stockholder of its obligations hereunder and (ii) none of the execution and
delivery of this Agreement by the Stockholder or the performance by the
Stockholder of its obligations hereunder shall (A) result in, give rise to or
constitute a violation or breach of or a default (or any event which with notice
or lapse of time or both would become a violation, breach or default) under any
of the terms of any agreement or other instrument to which the Stockholder is a
party or by which the Stockholder or any of the Stockholder's Owned Shares is
bound, or (B) violate any Law or Order applicable to the Stockholder, except for
any of the foregoing as could not reasonably be expected to impair the
Stockholder's ability to perform his obligations under this Agreement in any
material respect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Each of Parent and Merger Sub hereby represent and warrant to the
Stockholder that (a) it has all legal capacity, power and authority to execute
and deliver this Agreement and to perform his obligations hereunder and (b) this
Agreement has been duly executed and delivered by it and constitutes a legal,
valid and binding obligation of the party, enforceable against it in accordance
with the terms of this Agreement.
ARTICLE VI
TERMINATION
This Agreement shall terminate upon the expiration of the Voting
Period; PROVIDED, that SECTIONS 7.5, 7.6, 7.7, 7.8, 7.9, 7.10, 7.12 and 7.13
shall survive termination of this Agreement. Notwithstanding the foregoing,
termination of this Agreement shall not prevent any party from seeking any
remedies (at law or in equity) against any other party for that party's breach
of any of the terms of this Agreement prior to the date of termination.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 APPRAISAL RIGHTS. The Stockholder hereby waives any rights
of appraisal or rights to dissent from the Merger or the approval of the Merger
Agreement that the Stockholder may have under applicable Law and shall not
permit any such rights of appraisal or rights of dissent to be exercised with
respect to any Owned Shares or any New Shares.
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SECTION 7.2 FURTHER ACTIONS. The Stockholder agrees that the
Stockholder shall take any further action and execute any other documents or
instruments as may be reasonably necessary to effectuate the intent of this
Agreement.
SECTION 7.3 FEES AND EXPENSES. Except as otherwise expressly set forth
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 the cost or expense whether or not the Merger is consummated.
SECTION 7.4 AMENDMENTS, WAIVERS, ETC. This Agreement may be amended by
the parties at any time. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties. Any party hereto
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 contained herein or in any document delivered
pursuant hereto and (c) subject to the requirements of applicable Law, waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby. The failure of any party to
assert any rights or remedies shall not constitute a waiver of such rights or
remedies.
SECTION 7.5 NOTICES. All notices, requests, claims, instructions,
demands and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by facsimile (provided that the facsimile is promptly confirmed by
telephone confirmation thereof) or by overnight courier to the respective
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to the Stockholder, addressed to:
Aquamarine Capital Management, LLC
000 Xxxx 00xx Xx, 00xx xxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxx
Facsimile: 000-000-0000
with a copy to (which shall not constitute notice):
Xxxxxxxxxx Helpern Syracuse & Hirschtritt LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Facsimile: 000-000-0000
(b) if to Parent or Merger Sub, addressed to:
Xxxxxx Group Acquisitions, LLC
00 Xxxx 00xx Xx., 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxx X. Xxxxxx
Facsimile: 000-000-0000
with a copy to (which shall not constitute notice):
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: 000-000-0000
or to such other address as any party shall specify by written notice so given,
and notice shall be deemed to have been delivered as of the date so
telecommunicated or personally delivered.
SECTION 7.6 HEADINGS; TITLES. Headings and titles of the Articles and
Sections of this Agreement are for the convenience of the parties only, and
shall be given no substantive or interpretative effect whatsoever.
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 substance of the
transactions contemplated hereby is not affected 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 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 the
transactions contemplated hereby are fulfilled to the fullest extent possible.
SECTION 7.8 ENTIRE AGREEMENT. This Agreement (together with the Merger
Agreement, to the extent referred to in this Agreement) and any documents
delivered by the parties in connection herewith constitute the entire agreement
among the parties with respect to the subject matter of this Agreement and
supersede all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof.
SECTION 7.9 ASSIGNMENT; BINDING EFFECT; NO THIRD PARTY BENEFICIARIES;
FURTHER ACTION. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties (whether by
operation of law or otherwise) without the prior written consent of the other
parties and assignment without such consent shall be void, except that each of
Parent and/or Merger Sub may assign, in its sole discretion, any or all of its
rights, interests and obligations under this Agreement to any of their
respective Affiliates. This Agreement shall be binding upon and shall inure to
the benefit of Parent and Merger Sub and their respective successors and assigns
and shall be binding upon the Stockholder and its successors and permitted
assigns. This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person (other than, in the case of
Parent and Merger Sub, their respective successors and assigns and, in the case
of the Stockholder, its successors and
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permitted assigns) any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
SECTION 7.10 GOVERNING LAW. This Agreement shall be governed by,
construed and enforced in accordance with, the laws of the State of New York,
without regard to principles of conflict of laws thereof. Each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of the United
States District Court for the Southern District of New York or any court of the
State of New York located in such district in the event any dispute arises out
of this Agreement or any of the transactions contemplated by this Agreement, (b)
agrees that it will not attempt to deny or defeat such personal jurisdiction or
venue by motion or other request for leave from any such court and (c) agrees
that it will not bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than such courts
sitting in the State of New York.
SECTION 7.11 ENFORCEMENT OF AGREEMENT; SPECIFIC PERFORMANCE. The
parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed by the Stockholder in accordance
with their specific terms or were otherwise breached by the Stockholder. It is
accordingly agreed that Parent and Merger Sub shall be entitled to an injunction
or injunctions, without the requirement of posting any bond or furnishing other
security, to prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement in the state courts of the State of New
York sitting in the City of New York or any court of the United States located
in the City of New York, this being in addition to any other remedy to which
such party is entitled at law or in equity.
SECTION 7.12 COUNTERPARTS; FACSIMILES. 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. This
Agreement or any counterpart may be executed and delivered by facsimile copies,
each of which shall be deemed an original.
SECTION 7.13 WAIVER OF JURY TRIAL. 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 AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
[Signature page follows.]
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IN WITNESS WHEREOF, Parent, Merger Sub and the Stockholder have caused
this Agreement to be duly executed as of the day and year first above written.
XXXXXX GROUP ACQUISITIONS, LLC
XXXXXX GROUP ACQUISITIONS, LLC
By: The Xxxxxx Group LLC,
its member
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Member
XXXXXX GROUP ACQUISITIONS, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: President & Chief
Executive Officer
AQUAMARINE CAPITAL MANAGEMENT, LLC
By: /s/ Xxx Xxxxx
--------------------------------------------
Name: Xxx Xxxxx
Title: Managing Member
[Signature Page to Voting Agreement]
