This Voting
Agreement (this “ Agreement ”) is dated as of
September 15, 2005, among Premium Acquisition, Inc., a Delaware
corporation (“ Merger Co 1 ”), Mulberry
Acquisition, Inc., a Delaware corporation (“ Merger Co
2 ”), DLJMB IV First Merger Co Acquisition Inc., a
Delaware corporation (“ Merger Co 3 ,” and,
together with Merger Co 1 and Merger Co 2, the “ Merger
Cos ” and each, a “ Merger Co ”) and
the Persons executing this Agreement as “Stockholders”
on the signature page hereto (each, a “ Stockholder
” and collectively, the “ Stockholders
”).
A. Simultaneously
with the execution of this Agreement, (1) the Merger Cos and
UICI, a Delaware corporation (the “ Company ”),
have entered into an Agreement and Plan of Merger, as may be
amended from time to time (the “ Merger Agreement
”), which provides, among other things, for the Merger of the
Merger Cos with and into the Company, upon the terms and subject to
the conditions set forth therein and (2) funds affiliated or
managed by each of The Blackstone Group, DLJ Merchant Banking
Partners IV, L.P. and Goldman, Sachs & Co. (collectively, the
“ Guarantors ”) are providing guarantees
(collectively, the “Limited Guarantee”) in favor of the
Company with respect to certain obligations of the Merger Cos, in
furtherance of the transactions contemplated by this
Agreement.
B. Each
Stockholder is the record and Beneficial Owner of, and has the sole
right to vote and dispose of, that number of Common Shares set
forth below such Stockholder’s name on the signature page
hereto.
C. As an
inducement to the Merger Cos entering into the Merger Agreement and
incurring the obligations therein, the Merger Cos have required
that each Stockholder enter into this Agreement.
NOW THEREFORE, the
parties hereto agree as follows:
1.1.
Capitalized Terms . Capitalized terms used in this Agreement
and not defined herein have the meanings ascribed to such terms in
the Merger Agreement.
1.2. Other
Definitions . For the purposes of this Agreement:
“
Beneficial Owner ” 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).
“ Common
Shares ” has the meaning ascribed thereto in the Merger
Agreement, and will also include for purposes of this Agreement all
shares or other voting securities into which Common Shares may be
reclassified, sub-divided, consolidated or converted and any rights
and benefits arising therefrom, including any dividends or
distributions of securities which may be
declared in
respect of the Common Shares and entitled to vote in respect of the
matters contemplated by Article II.
“ Outside
Date ” means the date specified in Section 7.2(a) of
the Merger Agreement, as such date may be extended pursuant to the
Merger Agreement.
“
Knows ” means, with respect to any particular Person,
the actual knowledge of that Person, and for purposes of this
Agreement, no such Person will have any obligation to make or have
made an inquiry in respect of any matter.
“
Representative ” means, with respect to any particular
Person, any officer, director, employee, agent, consultant, advisor
or other representative of such Person (including legal counsel,
accountants and financial advisors).
“
Transfer ” means, with respect to a security, the
sale, grant, assignment, transfer, pledge encumbrance or other
disposition of such security or the Beneficial Ownership thereof
(including by operation of Law), or the entry into any Contract to
effect any of the foregoing.
2.1. Agreement
to Vote . Subject to the terms and conditions hereof, each
Stockholder irrevocably and unconditionally agrees that from and
after the date hereof and until the earliest to occur of
(a) the Effective Time, (b) the termination of the Merger
Agreement, and (c) the Outside Date (the “ Expiration
Time ”), at any meeting (whether annual or special, and
at each adjourned or postponed meeting) of the Company’s
stockholders, however called, or in connection with any written
consent of the Company’s stockholders, each Stockholder will
(x) appear at such meeting or otherwise cause its Owned Shares
to be counted as present thereat for purposes of calculating a
quorum and (y) vote, or cause to be voted (including by
written consent, if applicable), all of such Stockholder’s
Common Shares Beneficially Owned by such Stockholder as of the
relevant time (“ Owned Shares ”) (i) in
favor of the adoption of the Merger Agreement (whether or not
recommended by the Company Board) and the transactions contemplated
thereby, (ii) against any Takeover Proposal (other than the Merger)
or other proposal made in opposition to adoption of the Merger
Agreement or in competition or inconsistent with the Merger,
(iii) against any action or agreement that such Stockholder
Knows is intended to or has the purpose of breaching any
representation, warranty, covenant or agreement of the Company
under the Merger Agreement and (iv) against any action or
agreement that such Stockholder Knows is intended to result in any
condition to the consummation of the Merger set forth in
Article VI of the Merger Agreement not being
fulfilled.
2.2. Additional
Shares . Each Stockholder hereby agrees, while this Agreement
is in effect, to promptly notify the Merger Cos of the number of
any new Common Shares with respect to which Beneficial Ownership is
acquired by such Stockholder, if any, after the date hereof and
before the Expiration Time. Any such Common Shares shall
automatically become subject to the terms of this
Agreement.
2.3.
Restrictions on Transfer, Etc. Except as provided for
herein, each Stockholder agrees, from the date hereof until the
Expiration Time, not to (a) tender into any tender or exchange
offer or otherwise directly or indirectly Transfer any Owned Shares
other than (i) any
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Transfer to
members of such Stockholder’s immediate family, a family
trust of such Stockholder or a charitable institution (each a
“ Permitted Transferee ”), but only if, in each
case, prior to the effectiveness of the Transfer, the Permitted
Transferee of such Owned Shares agrees in writing to be bound by
the terms hereof and notice of such Transfer, including the name
and address of the Permitted Transferee, is delivered to the Merger
Cos pursuant to Section 6.1 hereof or (ii) pursuant to open
market regular way sales effected on the principal securities
exchange on which Common Shares are then listed or admitted to
trade in an amount not to exceed the number of Transferable Owned
Shares specified on the signature page hereto; provided that with
respect to Transfers pursuant to Section 2.3(a)(i), Transfers
to minor children shall be to their legal custodians who have the
capacity and authority to be bound by the terms hereof on behalf of
such minor children; and provided, further, that with respect to
Transfers pursuant to Section 2.3(a)(i), the assigning Stockholder
shall remain jointly and severally liable for the breaches of any
Permitted Transferees of the terms hereof or (b) grant any
proxies with respect to such Stockholder’s Owned Shares,
deposit such Stockholder’s Owned Shares into a voting trust,
enter into a voting agreement with respect to any of such
Stockholder’s Owned Shares or otherwise restrict the ability
of such Stockholder freely to exercise all voting rights with
respect thereto. Any action attempted to be taken in violation of
the preceding sentence will be null and void. Each Stockholder
further agrees to authorize and request each of the Merger Cos and
the Company to notify the Company’s transfer agent that there
is a stop transfer order with respect to all of the Owned Shares
other than the Owned Shares subject to transfer under
Sections 2.3(a)(i) and 2.3(a)(ii) and that this Agreement
places limits on the voting of the Owned Shares. If so requested by
the Merger Cos, each Stockholder agrees that the certificates
representing Owned Shares shall bear a legend stating that they are
subject to this Agreement and to the irrevocable proxy granted in
Section 2.4 of this Agreement, provided that the cost of
placing such a legend on the certificates shall not be borne by any
of the Stockholders.
2.4.
Proxies . Each Stockholder hereby revokes any and all
previous proxies granted with respect to its Owned Shares. By
entering into this Agreement, subject to the last sentence of this
Section 2.4, each Stockholder hereby grants a proxy appointing
the Merger Cos and each of its designees, and each of them
individually, as such Stockholder’s attorney-in-fact and
proxy, with full power of substitution, for and in such
Stockholder’s name, to be counted as present, vote, express
consent or dissent, or otherwise to act on behalf of the
Stockholder with respect to its Owned Shares in the manner
contemplated by Section 2.1 as the Merger Cos or its proxy or
substitute shall, in the Merger Cos’ sole discretion, deem
proper with respect to its Owned Shares. The proxy granted by each
Stockholder pursuant to this Section 2.4 is, subject to the
last sentence of this Section 2.4, irrevocable and is coupled
with an interest, in accordance with Section 212(e) of the DGCL,
and is granted in order to secure such Stockholder’s
performance under this Agreement and also in consideration of the
Merger Cos entering into this Agreement and the Merger Agreement.
If any Stockholder fails for any reason to be counted as present,
consent or vote such Stockholder’s Owned Shares in accordance
with the requirements of Section 2.1 above (or anticipatorily
breaches such section), then the Merger Cos shall have the right to
cause to be present, consent or vote such Stockholder’s Owned
Shares in accordance with the provisions of Section 2.1. The
proxy granted by each Stockholder shall be revoked upon termination
of this Agreement in accordance with its terms.
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III. REPRESENTATIONS AND
WARRANTIES
3.1.
Representations and Warranties of Stockholders . Each
Stockholder, severally and not jointly, represents and warrants to
the Merger Cos as of the date of this Agreement (or, in the case of
a Permitted Transferee, as of the date of the relevant Transfer)
and as of the date of any meeting of the Company’s
stockholders and as of the date of the execution of any written
Stockholder consent or any proxy permitted under this Agreement or
consented to by the Merger Cos, as follows:
(a) Such
Stockholder has the requisite capacity and authority to execute and
deliver this Agreement and to consummate the transaction
contemplated hereby. This Agreement has been duly and validly
executed and delivered by such Stockholder and constitutes a legal,
valid and binding agreement of such Stockholder enforceable by the
Merger Cos against such Stockholder in accordance with its terms,
subject to the effect of any applicable bankruptcy, insolvency
(including all Laws related to fraudulent transfers),
reorganization, moratorium or similar Laws affecting
creditors’ rights generally or equitable principles relating
to enforceability.
(b) Such
Stockholder is the record and Beneficial Owner, free and clear of
any Liens (other than those arising under this Agreement or those
set forth on Schedule 3.1 ) of the Owned Shares, which,
as of the date hereof, are set forth below such Stockholder’s
name on the signature page hereto and, except as provided in this
Agreement, has full and unrestricted power to dispose of and vote
all of, and has not granted any proxy inconsistent with this
Agreement that is still effective or entered into any voting or
similar agreement with respect to, such Stockholder’s Owned
Shares. The Owned Shares set forth below such Stockholder’s
name on the signature page hereto constitute all of the capital
stock of the Company that is Beneficially Owned by such Stockholder
as of the date hereof other than Common Shares owned by charitable
trusts and foundations of which such Stockholder is an Affiliate
(the “ Trusts ”), which Common Shares owned by
the Trusts shall not be considered Common Shares Beneficially Owned
by such Stockholder for purposes of this Agreement, and, except for
such Stockholder’s Owned Shares, the Owned Shares owned by
the other Stockholders who are parties to this Agreement and Common
Shares owned by the Trusts, such Stockholder and such
Stockholder’s Affiliates do not Beneficially Own or have any
right to acquire (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 Common Shares or
any securities convertible into Common Shares (including Company
Stock Options).
(c) Other
than the filing by such Stockholder of any reports with the SEC
required by Sections 13(d) or 16(a) of the Exchange Act, none of
the execution and delivery of this Agreement by such Stockholder,
the consummation by such Stockholder of the transactions
contemplated hereby or compliance by such Stockholder with any of
the provisions hereof (i) requires any consent or other Permit
of, or filing with or notification to, any Governmental Entity or
any other Person by such Stockholder, (ii) results in a
violation or breach of, or constitutes (with or without notice or
lapse of time or both) a default (or gives rise to any third party
right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of
any Contract to which such Stockholder is a party or by which such
Stockholder or any of such Stockholder’s properties or assets
(including such Stockholder’s
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Owned Shares)
may be bound, (iii) violates any Order or Law
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