EXHIBIT 2
VOTING
AGREEMENT
THIS VOTING
AGREEMENT, dated as of April 5, 2007 (this Agreement) is made by and
between AVP Holdings, Inc., a Delaware corporation (Parent) and
Leonard Armato (the Stockholder).
RECITALS
Pursuant to the
Agreement and Plan of Merger, dated April 5, 2007 (as amended, modified,
supplemented or waived from time to time in accordance with its terms, the Merger
Agreement), by and among AVP, Inc., a Delaware corporation (the Company),
Parent and AVP Acquisition Corp., a Delaware corporation (Acquisition Corp.),
it is contemplated that Acquisition Corp. shall merge with and into the Company
upon the terms and subject to the conditions set forth therein (the Merger). Capitalized terms used, but not defined,
herein shall have the meanings set forth in the Merger Agreement.
As of the date
hereof, the Stockholder is the record and beneficial owner of the number of
shares of the Companys Common Shares and the Companys Preferred Shares set
forth on Schedule 1 attached hereto (the Existing Shares
and, together with any shares of Company Shares acquired by the Stockholder
after the date hereof, whether upon the exercise of warrants, options or
rights, the conversion or exchange of any Existing Shares or convertible or
exchangeable securities or by means of purchase, dividend, distribution or
otherwise, the Subject Shares).
As a condition to
their willingness to enter into the Merger Agreement, Parent and Acquisition
Corp. have requested that the Stockholder enter into this Agreement.
In order to induce
Parent and Acquisition Corp. to enter into the Merger Agreement, the
Stockholder is willing to enter into this Agreement.
AGREEMENT
To implement the
foregoing and in consideration of the mutual agreements contained herein, the
parties agree as follows:
1. Covenants
of the Stockholder. Until the
termination of this Agreement in accordance with Section 3, the
Stockholder agrees as follows:
(a) Agreement to Vote. At any meeting of stockholders of the Company
called for the approval of the Merger, however called, or at any adjournment or
postponement thereof, or in connection with any action or approval by written
consent of the holders of Company Shares, or in any other circumstances in
which the Stockholder is entitled to vote, consent or give any other approval
with respect to the Merger, the Stockholder shall vote (or cause to be voted)
the Subject Shares under the Stockholders control:
(i) in favor of adoption
and approval of the Merger;
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(ii) in favor of adoption of
the Merger Agreement and the transactions contemplated thereby;
(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 stockholders or in
such consent, and in connection therewith to execute any documents which are
necessary or appropriate in order to effectuate the foregoing, including the
ability for Parent, Acquisition Corp. or any of their respective nominees to
vote such Subject Shares directly;
(iv) against approval of any
proposal made in opposition to or competition with consummation of the Merger
and the Merger Agreement;
(v) against any proposal
that is intended to, or is reasonably likely to, result in a breach of any
covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or the conditions to Parents or
Acquisition Corp.s obligations under the Merger Agreement not being fulfilled;
(vi) against any change in
the directors of the Company, any change in the present capitalization of the
Company, any amendment of the Companys certificate of incorporation or by-laws
or any other material change in the Companys corporate structure or business
that is not requested or expressly approved by Parent;
(vii) against any Acquisition
Proposal by any Person other than Parent or Acquisition Corp.; and
(viii) against any action which
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.
Notwithstanding
the foregoing, and for the avoidance of doubt, nothing in this Section 1
shall restrict the Company from terminating the Merger Agreement in accordance
with Article 7 thereto, and nothing in this Section 1 shall require
the Stockholder to take any action, or restrict the Stockholder from taking any
action, in connection with the Companys termination of the Merger Agreement in
accordance with Article 7 thereto.
(b) Agreement to Cause Vote.
The Stockholder, as the holder of voting stock of the Company, shall be
present, in person or by the proxy contemplated in Section 2 at all
meetings of stockholders of the Company at which the matters referred to in Section
1(a) are to be voted upon so that all Subject Shares are counted for the
purposes of determining the presence of a quorum at such meetings.
(c) Transfer
Restrictions. The Stockholder agrees
not to (i) sell, transfer, pledge, encumber, assign or otherwise dispose of
(including by gift or by contribution or distribution to any trust or similar
instrument or to any beneficiaries of the Stockholder (collectively, Transfer))
any of the Subject Shares, (ii) enter into any contract, option or other
arrangement or understanding (including any profit sharing arrangement) with
respect to the Transfer of any of the Subject Shares, unless prior to making
such Transfer, the transferee of the Subject Shares has agreed to be bound by
the terms of this Agreement to the same extent as the Stockholder with
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respect to the Subject Shares so transferred,
(iii) grant any proxy, power-of-attorney or other authorization in or with
respect to the Subject Shares, (iv) deposit the Subject Shares into a voting
trust or enter into a voting agreement or arrangement with respect to the
Subject Shares, or (v) take any other action that would in any way restrict,
limit or interfere with the performance of the Stockholders obligations
hereunder or the transactions contemplated hereby or by the Merger Agreement.
(d) Waiver Of Appraisal
Rights. Stockholder hereby waives
any rights of appraisal or rights to dissent from the Merger.
(e) No Solicitation. The Stockholder shall not, nor shall it
permit or authorize any of its agents or representatives (collectively, the Representatives)
to, (i) solicit or initiate, or encourage, directly or indirectly, any
inquiries regarding or the submission of, any Acquisition 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 Acquisition Proposal or (iii) enter into
any agreement with respect to any Acquisition Proposal or approve or resolve to
approve any Acquisition Proposal. Upon
execution of this Agreement, the Stockholder 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. The Stockholder will promptly
notify Parent of the existence of any proposal, discussion, negotiation or
inquiry received by the Stockholder, and the Stockholder will immediately
communicate to Parent the terms of any proposal, discussion, negotiation or
inquiry which it may receive (and will promptly provide to Parent 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 the forgoing, (i) Parent and
Acquisition Corp. acknowledge that the Stockholder is an officer and director
of the Company, and (ii) none of the provisions of this Section 1(e)
shall restrict Stockholder from taking any actions in the furtherance of the
fulfillment of his duties as an officer and director of the Company, nor shall
Stockholder be restricted in any way from taking any of the actions
contemplated in Section 5.08 of the Merger Agreement in his capacity as an
officer and director of the Company.
(f) Representations and
Warranties of the Stockholder. The
Stockholder hereby represents and warrants to the Buyer as of the date hereof
that:
(i) the Stockholder has
all requisite power and authority to execute, deliver and perform this
Agreement, to appoint Parent and Acquisition Corp. as its Proxy and to
consummate the transactions contemplated hereby;
(ii) this Agreement has been
duly executed and delivered by or on behalf of the Stockholder and constitutes
a legal, valid and binding obligation of the Stockholder, enforceable against
the Stockholder in accordance with its terms;
(iii) the Existing Shares of
the Stockholder constitute all of the shares of Company Stock owned of record
or beneficially by the Stockholder as of the date hereof;
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(iv) the Stockholder has
sole voting power, sole power of disposition, sole power to issue instructions
with respect to the matters set forth in Section 1(a) and sole
power to agree to all of the matters set forth in this Agreement, in each case
with respect to all of the Existing Shares of the Stockholder, and will have
sole voting power, sole power of disposition, sole power to issue instructions
with respect to the matters set forth in Section 1(a) and sole
power to agree to all of the matters set forth in this Agreement, in each case,
with respect to all of the Subject Shares of the Stockholder as of the
Effective Time, in each case with no limitations, qualifications or
restrictions on such rights, subject to applicable federal securities laws and
the terms of this Agreement;
(v) the Stockholder has good and valid title to
the Existing Shares of the Stockholder and at all times during the term hereof
and on the Effective Time will have good and valid title to the Subject Shares
of the Stockholder, in each case, free and clear of all Liens, subject to
applicable federal securities laws and the terms of this Agreement;
(vi) the execution and
delivery of this Agreement by the Stockholder does not, and the performance of
this Agreement by the Stockholder will not, (i) conflict with, violate, result
in breach of, 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 or cancellation, or result in the creation of a lien or encumbrance
on any assets of the Stockholder, including the Subject Shares, pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit or
other instrument or obligation to which the stockholder is a party or by which
the Stockholder or any of the Stockholders assets are bound or (ii) conflict
with or violate any law applicable to the Stockholder;
(vii) the execution and
delivery of this Agreement by the Stockholder does not, and the performance of
this Agreement by the Stockholder 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 filing under the HSR Act or
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 the Stockholder of its
obligations under this Agreement; and
(viii) no broker, investment
banker, financial advisor or other person is entitled to any brokers, finders,
financial advisors or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf
of the Stockholder.
(g) Consent to the
Management Rollover Transaction. The
Stockholder acknowledges that (i) Leonard Armato, the Companys chairman and
Chief Executive Officer will, in connection with the Merger (A) become a
director and officer of Parent, (B) contribute to parent the Company Shares he
owns, in exchange for shares of preferred and common stock of Parent, (C) invest
a portion of the proceeds he receives from the cash-out of his Options in the
Merger into Parent in exchange for shares of preferred and common stock of
Parent, (D) become a party to an employment agreement with Parent (entitling
him to cash and non-cash compensation, including bonuses and benefits), and
(ii) the foregoing rights in Parent that are being made available to Mr. Armato
will not be available to the Stockholder (and likely will not
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be made available to any other stockholders
of the Company on these or any other terms).
The Stockholder hereby consents to the foregoing transactions and waives
any rights in connection with the foregoing transactions.
2. Grant
of Irrevocable Proxy Coupled with an Interest.
(a) Proxy. Solely in the event of a failure by the
Stockholder to act in accordance with its obligations as to voting or executing
a written consent pursuant to Section 1(a) of this Agreement, the
Stockholder hereby revokes any and all other proxies or powers of attorney in
respect of any Subject Shares and agrees that during the period commencing on
the date hereof and ending on the date this Agreement terminates in accordance
with Section 3, the Stockholder hereby irrevocably appoints Parent,
Acquisition Corp. or any individual designated by Parent or Acquisition Corp.
as the Stockholders agent, attorney-in-fact and proxy (with full power of
substitution), for and in the name, place and stead of the Stockholder, to vote
(or cause to be voted) the Subject Shares held of record by the Stockholder, in
the manner set forth in Section 1(a), at any meeting of the shareholders
of the Company, however called, or in connection with any written consent of
the shareholders of the Company, in each case, solely at the time the
Stockholders fails to act in accordance with its obligations as to voting or
executing a written consent pursuant to Section 1(a) of this Agreement.
(b) Termination of Proxy. The Stockholder hereby affirms that the proxy
set forth in this Section 2 is irrevocable, is coupled with an interest,
and is granted in consideration of Parent and Acquisition Corp. entering into
the Merger Agreement; provided that, for the avoidance of doubt, the
proxy set forth in this Section 2 shall terminate automatically upon
termination of this Agreement.
(c) Conflict. The vote of the proxyholder shall control in
any conflict between the vote by the proxyholder of the Stockholders Subject
Shares and a vote by the Stockholder of its Subject Shares.
3. Termination. This Agreement shall terminate, and no party
shall have any rights or obligations hereunder and this Agreement shall become
null and void and have no further effect upon the earlier to occur of (a)
the written mutual consent of the parties hereto, (b) the Effective Time and
(c) 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.
4. General
Provisions.
(a) Further Assurance. From time to time, at another partys 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.
(b) Amendment. This
Agreement may not be amended except by an instrument signed by Parent and the
Stockholder.
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(c) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, telecopied (which is confirmed) or sent by overnight courier
(providing proof of delivery) to the parties at the following addresses (or at
such other addresses for a party as shall be specified by like notice):
(i) if to Parent or
Acquisition Corp.:
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AVP Holdings, Inc.
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c/o Shamrock
Capital Advisors
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4444 Lakeside
Drive
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Burbank, CA
91505
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Attention:
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Robert Perille
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Michael LaSalle
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Facsimile No.:
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(818) 973-1499
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with a copy to (which shall not constitute notice):
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Kirkland &
Ellis LLP
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777 South
Figueroa Street
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Los Angeles, CA
90017
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Attention:
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John A.
Weissenbach, Esq.
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Damon R. Fisher,
Esq.
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Facsimile No.:
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(213) 680-8500
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(ii) if to the Stockholder:
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Leonard Armato
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c/o AVP Holdings, Inc.
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6100 Center Drive, Suite 900
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Los
Angeles, CA 90045
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Facsimile No.: (310) 426-8010
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with a copy to (which
shall not constitute notice):
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Dreier Stein & Kahan LLP
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The Water Garden
1620 26th Street Sixth Floor North Tower
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Santa Monica, CA 90404
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Attention:
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Robert Kahan
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Facsimile No.:
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(310) 828-9101
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(d) Interpretation. Whenever the words include, includes or including
are used in this Agreement they shall be deemed to be followed by the words without
limitation.
(e) Counterparts. This Agreement may be executed in two or more
counterparts (including by facsimile or electronic transmission), all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by
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each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
(f) Entire Agreement;
No Third Party Beneficiaries. This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter hereof, and is not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
(g) 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 are not affected in any
manner materially 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 a mutually acceptable manner in order that the
transactions contemplated hereby may be consummated as originally contemplated
to the fullest extent possible.
(h) No Waiver. 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, or 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.
(i) Expenses. Except as otherwise expressly set forth
herein, all fees, costs and expenses incurred in connection with this Agreement
or the Merger Agreement and the transactions contemplated hereby shall be paid
by the party incurring such fees, costs and expenses.
(j) Attorneys Fees. In the event that any action or proceeding,
including without limitation arbitration, is commenced by any party hereto for
the purpose of enforcing any provision of this Agreement, the parties to such
action, proceeding or arbitration shall receive as part of any award, judgment,
decision or other resolution of such action, proceeding or arbitration their
costs and reasonable attorneys fees as determined by the person or body making
such award, judgment, decision or resolution.
Should any claim hereunder be settled short of the commencement of any
such action or proceeding, including arbitration, the parties in such
settlement shall be entitled to include as part of the damages alleged to have
been incurred reasonable costs of attorneys or other professionals in
investigation or counseling on such claim.
(k) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors,
heirs, agents, representatives, trust beneficiaries, attorneys, affiliates and
associates and all of their respective predecessors, successors, permitted
assigns, heirs, executors and administrators.
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(l) Enforcement;
Governing Law; Waiver of Jury Trial.
(i) The parties hereto
agree that irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to specific performance of the terms hereof, in addition
to any other remedy at law or in equity.
(ii) The provisions of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware (excluding any conflict of law rule or principle that would
refer to the laws of another jurisdiction).
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING ARISING HEREUNDER.
* * * * *
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IN WITNESS
WHEREOF, the Buyer and the Stockholder have caused this Voting Agreement to be
executed as of the date first written above.
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PARENT:
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AVP HOLDINGS, INC.
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/s/ ROBERT F. PERILLE
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By:
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Robert F. Perille
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Its:
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President
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ACQUISITION CORP.:
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AVP ACQUISITION CORP.
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/s/ ROBERT F. PERILLE
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By:
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Robert F. Perille
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Its:
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President
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STOCKHOLDER:
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/S/ LEONARD ARMATO
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Leonard Armato
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Signature Page - Armato
Voting Agreement
Schedule 1
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Stockholder
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Shares of Company
Common Stock
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Shares of Company
Preferred Stock
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Leonard Armato
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1,795,798
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