EXHIBIT 2
VOTING AGREEMENT
AND IRREVOCABLE PROXY
This VOTING AGREEMENT (this "Agreement") is dated March 29, 2004, and
is between WF Holdings, Inc., a Delaware corporation ("WF"), Springhouse
Capital, LP, a Delaware limited partnership ("Springhouse LP"), Springhouse
Capital LLC, a Delaware limited liability company ("Springhouse LLC"), and Xxxxx
Xxxxxx (Xxxxxx, Springhouse LP and Springhouse LLC are collectively referred to
herein as "Holder").
WHEREAS, Workflow Management, Inc., a Delaware corporation
("Workflow"), WF and WFM Acquisition Sub, Inc, a Delaware corporation and a
wholly owned subsidiary of WF ("Acquisition Sub"), have entered into an
Agreement and Plan of Merger, dated as of January 30, 2004 (as amended by the
Amendment (as defined below), the "Merger Agreement"), pursuant to which
Acquisition Sub will be merged with and into Workflow, and the stockholders of
Workflow immediately would receive $4.87 per share;
WHEREAS, it is proposed that the Merger Agreement be amended (the
"Amendment") to increase the consideration payable to the Workflow stockholders
to $5.375 per share; and
WHEREAS, to induce WF to enter into the Amendment, Holder has agreed to
enter into this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES. Holder hereby represents, warrants
and covenants to WF as follows:
(a) TITLE. As of the close of business on February 23, 2004
and as of the date hereof, Holder was and currently is the sole owner, whether
beneficially or of record, of the number of shares of the Company's common
stock, par value $0.001 per share, set forth next to Holder's name on EXHIBIT A
hereto (the "Shares"). The term "beneficial owner" shall have the meaning given
such term in Rules 13d-3 under the Securities Exchange Act of 1934, as amended,
or any successor provision. The Shares are the only shares of Company capital
stock, securities convertible into Company capital stock, or other rights in
respect of Company capital stock owned of record or beneficially by Holder or in
which Holder has any interest. The Shares are owned by Holder, free and clear of
all liens, claims, charges and encumbrances of any kind whatsoever except for
liens, claims or charges arising from margin loans from a bank or brokerage firm
and except as contemplated by this Agreement.
(b) RIGHT TO VOTE. As of the close of business on February 23,
2004 and as of the date hereof, except as set forth in this Agreement, Holder
has full legal power, authority and right to vote all of the Shares without the
consent or approval of, or any other action on the part of, any other Person (as
defined below). Without limiting the generality of the foregoing, Holder has not
entered into any voting agreement (other than this Agreement) with any Person
with
respect to any of the Shares, granted any Person any proxy (revocable or
irrevocable) or power of attorney with respect to any of the Shares, deposited
any of the Shares in a voting trust or entered into any arrangement or agreement
with any Person limiting or affecting Holder's legal power, authority or right
to vote the Shares on any matter. As used herein, the term "Person" shall mean
an individual, corporation, partnership, limited liability company, association,
trust, unincorporated organization or other entity.
(c) AUTHORITY. Holder has full legal power, authority and
right to execute and deliver and to perform its obligations under this
Agreement. This Agreement has been duly and validly executed and delivered by
Holder and constitutes a legal, valid and binding agreement of Holder
enforceable against it in accordance with its terms.
(d) CONFLICTING INSTRUMENTS. The execution and delivery of
this Agreement and the performance by Holder of its obligations hereunder will
not result in any: (i) violation or breach of, or be in conflict with, Holder's
organizational documents or any other contracts or agreement binding on it or
otherwise affecting its assets or properties or (ii) violation of any statutes,
laws, rules, regulations, orders or judgments applicable to Holder, except for
any such breach, violation, conflict or default which, individually or in the
aggregate, would not impair or adversely affect Holder's ability to perform its
obligations under this Agreement or render inaccurate any of the representations
made by Holder herein.
2. COVENANTS. Until the termination of this Agreement in
accordance with Section 3, Holder hereby agrees as follows:
(a) RESTRICTIONS ON TRANSFER. Holder shall not, directly or
indirectly, assign, sell, pledge, encumber, transfer (including transfers by
testamentary or intestate succession or otherwise by operation of law) or
otherwise dispose of (collectively, "Transfer"), or agree to or allow the
Transfer, any of Holder's Shares (or any right, title or interest therein,
including but not limited to any right or power to vote to which the holder
thereof may be entitled, whether such right or power is granted by proxy or
otherwise). From and after the date hereof, Holder will not commit any act that
could restrict or otherwise affect Holder's legal power, authority and right to
vote all of the Shares. Without limiting the generality of the foregoing, except
for this Agreement, from and after the date hereof, Holder shall not enter into
any voting agreement with any Person with respect to any of the Shares, grant
any Person any proxy (revocable or irrevocable) or power of attorney with
respect to any of the Shares, deposit any of the Shares in a voting trust or
otherwise enter into any agreement or arrangement of any kind with any Person
limiting or affecting Holder's legal power, authority or right to vote the
Shares.
(b) AGREEMENT TO VOTE. Holder hereby agrees to vote or to
cause to be voted all of Holder's Shares: (A) in favor of the Merger Agreement;
and (B) against any other Acquisition Proposal (as defined in the Merger
Agreement) by a Person other than WF or its affiliates and against any other
action that may reasonably be expected to (i) impede, interfere with, delay,
postpone or attempt to discourage the consummation of the transactions
contemplated by the Merger Agreement (unless otherwise directed by WF with
respect to any action to postpone or adjourn any Stockholders' Meeting), or (ii)
result in a breach of any of the covenants, representations, warranties or other
obligations or agreements of Workflow under the
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Merger Agreement which would materially and adversely affect Workflow or WF or
their respective abilities to consummate the transactions contemplated by the
Merger Agreement.
(c) GRANTING OF PROXY. Holder understands and acknowledges
that WF is entering into the Amendment in reliance upon Holder's execution and
delivery of this Agreement. Holder hereby affirms that the irrevocable proxy set
forth in this Section 2(c) is given in connection with and as an inducement for
the execution by WF of the Amendment and to secure the performance of the duties
of Holder under this Agreement. In furtherance of the terms and provisions of
this Agreement, and to secure the performance of obligations hereunder, Holder
hereby grants an irrevocable proxy, coupled with an interest, to WF and any
authorized representative or agent of WF to vote all of the Shares in accordance
with the provisions of this Section 2. Holder hereby ratifies and approves of
each and every action taken by WF and any authorized representative or agent of
WF pursuant to the foregoing proxy. Notwithstanding the foregoing, if requested
by WF, Holder shall execute and deliver applicable proxy materials in
furtherance of the provisions of this Section 2.
(d) NO SOLICITATION. Holder hereby agrees that it shall not,
and shall not permit or authorize any of its affiliates, representatives or
agents to directly or indirectly, encourage, solicit, explore, participate in or
initiate discussions or negotiations with, or provide or disclose any
information to, any Person (other than WF or any of its affiliates or
representatives) concerning any Acquisition Proposal (as defined in the Merger
Agreement) or enter into any agreement, arrangement or understanding requiring
Workflow to abandon, terminate or fail to consummate the Merger or any other
transactions contemplated by the Merger Agreement. Holder will immediately cease
any existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal or other recapitalization or
refinancing of the Company with a party other than WF or Acquisition Sub. From
and after the execution of this Agreement, Holder shall immediately advise WF in
writing of the receipt, directly or indirectly, of any inquiries, discussions,
negotiations or proposals relating to an Acquisition Proposal or other
recapitalization or refinancing of the Company with a party other than WF or
Acquisition Sub, identify the offeror and furnish to WF a copy of any such
proposal or inquiry, if it is in writing, or a written summary of any oral
proposal or inquiry relating to an acquisition transaction with a party other
than WF or Acquisition Sub. Holder shall promptly advise WF in writing of any
development relating to such proposal, including the results of any discussions
or negotiations with respect thereto.
(e) FILINGS. Holder shall promptly make all filings required
under applicable law, rule or regulation as a result of the execution of this
Agreement. Without limiting the foregoing, Holder shall amend its Schedule 13D
currently on file with respect to Workflow within one business day of the date
hereof.
3. AMENDMENTS; TERMINATION; MODIFICATION.
(a) Except as otherwise provided herein, this Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties.
(b) This Agreement will terminate upon the earlier to occur of
(i) the consummation of the Merger, and (ii) July 31, 2004.
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4. ADDITIONAL SHARES. If, after the date hereof, Holder
acquires beneficial or record ownership of any additional shares of capital
stock of the Company (any such shares, "Additional Shares"), including, without
limitation, upon exercise of any option, warrant or right to acquire shares of
capital stock of the Company or through any stock dividend or stock split, the
provisions of this Agreement applicable to the Shares will thereafter be
applicable to such Additional Shares as if such Additional Shares had been
Shares as of the date hereof. The provisions of the immediately preceding
sentence will be effective with respect to Additional Shares without action by
any person or entity immediately upon the acquisition by Holder of beneficial or
record ownership of such Additional Shares.
5. CERTAIN REMEDIES. Without intending to limit the remedies
available to any of the parties, each party agrees that damages at law will be
an insufficient remedy in the event such party violates the terms hereof or the
powers granted hereunder. Each party agrees that each of the other parties
hereto may apply for and have injunctive or other equitable relief in any court
of competent jurisdiction to restrain the breach or threatened breach of, or
otherwise specifically to enforce, any of such party's rights or powers granted
hereunder. If Holder fails to comply with any of its obligations contained
herein, Holder shall pay any costs and expenses incurred by WF in connection
with a legal action related to such non-compliance.
6. BINDING EFFECT. This Agreement and the powers granted hereunder
will be binding upon, and inure to the benefit of, the parties hereto, their
successors and permitted assigns.
7. NOTICES. All notices, demands or other communications
given hereunder must be in writing and transmitted by facsimile or delivered
either personally or by a nationally recognized courier service marked for next
business day delivery or sent in a sealed envelope by first class mail, postage
prepaid and either registered or certified, return receipt requested, to the
address for each party as provided on the signature pages hereto or to such
other address as any such party may designate in writing. Any such notice,
demand or communication will be deemed to have been given (a) on the date of
delivery, if delivered personally, (b) on the date of facsimile transmission,
receipt confirmed, (c) one business day after delivery to a nationally
recognized overnight courier service, if marked for next day delivery or (d)
five business days after the date of mailing, if mailed.
8. MISCELLANEOUS. The section headings herein are inserted
for convenience of reference only and do not affect the meaning or
interpretation hereof. This Agreement constitutes the entire agreement of the
parties pertaining to the subject matter of this Agreement. It supersedes all
prior agreements of the parties, whether oral or written, pertaining to the
subject matter of this Agreement. If any provision of this Agreement is held
unenforceable by a court of competent jurisdiction, all other provisions of this
Agreement will remain effective. If any provision of this Agreement is held to
be unenforceable only in part or degree, it will remain effective to the extent
not held unenforceable. This Agreement may be executed in counterparts, each of
which is an original and all of which together constitute one and the same
instrument. This Agreement is governed by the laws of the State of Delaware
without giving effect to principles of conflict of laws. EACH PARTY TO THIS
AGREEMENT HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER AGREEMENTS OR
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TRANSACTIONS CONTEMPLATED HEREBY SHALL BE BROUGHT IN EITHER THE CHANCERY COURT
OF THE STATE OF DELAWARE OR FEDERAL DISTRICT COURT OF THE UNITED STATES OF
AMERICA FOR THE DISTRICT OF DELAWARE AND HEREBY EXPRESSLY SUBMITS TO THE
PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND
EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE
AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY HAND DELIVERY OF COPIES TO ITS ADDRESS SET FORTH BELOW SUCH
PARTY'S NAME ON THE SIGNATURE PAGE, SUCH SERVICE TO BECOME EFFECTIVE IMMEDIATELY
UPON DELIVERY. EACH PARTY TO THIS AGREEMENT WAIVES ITS RIGHTS TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT OR ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS, EXCEPT AS PROHIBITED BY LAW
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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The undersigned are executing this Agreement on the date stated in the
introductory clause.
WF HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Secretary
c/o Perseus, L.L.C.
000 Xxxxxxx Xxxxxx 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxx, III
SPRINGHOUSE CAPITAL, LP
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Member of
Springhouse Capital, LLC,
General Partner
SPRINGHOUSE CAPITAL, LLC
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Member
/s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
X/x Xxxxxxxxxxx Xxxxxxx
000 Xxxxxxx Xxxxxx. 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO VOTING AGREEMENT AND IRREVOCABLE PROXY]
EXHIBIT A
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Holder Number of Shares
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Springhouse Capital, LP 1,466,857
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Springhouse Capital, LLC 1,466,857
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Xxxxx Xxxxxx 1,538,757
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* THIS TABLE REPRESENTS SHARED VOTING AND DISPOSITIVE POWER AMONG THE PARTIES
LISTED HEREIN WITH RESPECT TO 1,466,857 SHARES. XXXXX XXXXXX HAS SOLE VOTING AND
DISPOSITIVE POWER OVER AN ADDITIONAL 71,900 SHARES.
