EXHIBIT 99.5
STOCKHOLDER VOTING AND OPTION AGREEMENT
This STOCKHOLDER AGREEMENT (this "Agreement") dated as of June 7, 2006
between WT Acquisition Holdings, LLC ("Parent"), a Delaware limited liability
company, Warrantech Corporation, a Nevada corporation (the "Company"), and
Xxxxxxx Xxxxx (the "Stockholder").
WHEREAS, Parent, WT Acquisition Corp., a Nevada corporation ("Sub") and
Warrantech Corporation, a Nevada corporation (the "Company"), are entering into
an Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended, modified or supplemented or restated, the "Merger Agreement";
capitalized terms used but not defined herein shall have the meanings set forth
in the Merger Agreement);
WHEREAS, Stockholder owns the number of shares of Company Common Stock
set forth opposite his, her or its name on Schedule A hereto (such shares of
Company Common Stock, together with any other shares of capital stock of the
Company acquired by such Stockholder after the date hereof and during the term
of this Agreement, being collectively referred to herein as the "Subject Shares"
of such Stockholder);
WHEREAS, Stockholder is the maker of that certain promissory note dated
as of July 24, 2002 in the original principal amount of $3,189,674.50 (the
"Stockholder Note");
WHEREAS, the outstanding principal balance of the Stockholder Note as
of May 31, 2006 was $3,615,092;
WHEREAS, Stockholder and the Company are parties to that certain Pledge
Agreement dated as of February 1, 2000 (the "Pledge Agreement") pursuant to
which Stockholder has pledged certain Subject Shares to the Company to secure
his obligations under the Stockholder Note; and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent and Sub have required that Stockholder enter into this
Agreement and the Stockholder desires to enter into this Agreement to induce
Parent and Sub to enter into the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Representations and Warranties of Stockholder. Stockholder
hereby represents and warrants to Parent and the Company as of the date hereof
as follows:
(a) Authority; Execution and Delivery; Enforceability. The
Stockholder has all requisite power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The Stockholder has duly authorized, executed and delivered
this Agreement, and this Agreement constitutes the legal, valid and
binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms, except as such enforceability
may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the
enforcement of creditors' rights and (b) the application of general
principles of equity, whether such enforceability is considered in a
proceeding in equity in law. The execution and delivery by the
Stockholder of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof
will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any
person under, or result in the creation of any lien upon any of the
properties or assets of the Stockholder under (i) if the Stockholder is
a corporation, partnership, limited liability company, trust or other
entity, the organizational documents of the Stockholder; (ii) any
provision of any contract, lease, license, indenture, agreement, note,
bond, permit, license, concession, franchise or other instrument
("Contract") to which the Stockholder is a party or by which any
properties or assets of the Stockholder are bound; or (iii) subject to
the filings and other matters referred to in the next sentence, any
provision of any Judgment or Law applicable to the Stockholder or the
properties or assets of the Stockholder. No Consent of, or
registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by or with respect to the Stockholder
in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby,
other than such reports under Sections 13(d) and 16 of the Exchange Act
as may be required in connection with this Agreement and the
transactions contemplated hereby. If the Stockholder is married and the
Subject Shares of the Stockholder constitute community property or
otherwise need spousal or other approval to be legal, valid and
binding, this Agreement has been duly authorized, executed and
delivered by, and constitutes a valid and binding agreement of, the
Stockholder's spouse, enforceable against such spouse in accordance
with its terms. No trust of which the Stockholder is a trustee requires
the consent of any beneficiary to the execution and delivery of this
Agreement or to the consummation of the transactions contemplated
hereby. The Stockholder hereby acknowledges that it has received and
reviewed a copy of the Merger Agreement.
(b) The Subject Shares. The Stockholder is (i) the beneficial
owner of, and, except for any Subject Shares held in "street name" and
identified on Schedule A, the record owner of, or (ii) the trustee of a
trust that is the record holder of, and whose beneficiaries are the
beneficial owners of, the Subject Shares set forth on Schedule A
attached hereto. The Stockholder has good and marketable title to the
Subject Shares set forth on Schedule A free and clear of any liens,
other than those liens set forth on Schedule A. The Stockholder does
not own, of record or beneficially, any shares of capital stock of the
Company other than the Subject Shares set forth on Schedule A attached
hereto. The Stockholder has the sole right and authority to vote and
dispose of the Subject Shares, and the Stockholder is not a party or
bound by, and neither the Stockholder nor the Subject Shares is subject
to any voting trust or other agreement, option, warrant, proxy,
arrangement or restriction with respect to the voting or disposition of
the Subject Shares, except as contemplated by this Agreement.
(c) Reliance. The Stockholder understands and acknowledges
that the Parent and Sub are entering into the Merger Agreement in
reliance upon Stockholder's execution and delivery of this Agreement.
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SECTION 2. Representations and Warranties of Parent. Parent hereby
represents and warrants to Stockholder and the Company as follows: Parent has
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery by Parent of this Agreement and consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent. Parent has duly executed and delivered this Agreement,
and this Agreement constitutes the legal, valid and binding obligation of
Parent, enforceable against Parent in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement of
creditors' rights and (b) the application of general principles of equity,
whether such enforceability is considered in a proceeding in equity or at law.
The execution and delivery by Parent of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with the
terms hereof will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to loss
of a material benefit under, or result in the creation of any lien upon any of
the properties or assets of Parent under (i) the certificate of incorporation or
bylaws of Parent, (ii) any provision of any Contract to which Parent is a party
or by which any properties or assets of Parent are bound or (iii) subject to the
reports under Sections 13(d) and 16 of the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby, any
provision of any Judgment or Law applicable to Parent or the properties or
assets of Parent.
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SECTION 3. Representations and Warranties of the Company. The Company
hereby represents and warrants to Parent and Stockholder as follows: The Company
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery by the Company of this Agreement and consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. The Company has duly executed and
delivered this Agreement, and this Agreement constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity, whether such enforceability is considered in a
proceeding in equity or at law. The execution and delivery by the Company of
this Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any lien upon any of the properties or assets of the Company
under (i) the certificate of incorporation or bylaws of the Company, (ii) any
provision of any Contract to which the Company is a party or by which any
properties or assets of the Company are bound or (iii) subject to the reports
under Sections 13(d) and 16 of the Exchange Act as may be required in connection
with this Agreement and the transactions contemplated hereby, any provision of
any Judgment or Law applicable to the Company or the properties or assets of the
Company.
SECTION 4. Covenants of Stockholder. Stockholder covenants and agrees
as follows:
(a) At any meeting of the stockholders of the Company called to
vote on the Merger, the Merger Agreement or the other transactions
contemplated thereby or at any adjournment thereof, or in any other
circumstances upon which a vote, consent or other approval (including
by written consent) with respect to the Merger, the Merger Agreement or
the other transactions contemplated by the Merger Agreement is sought,
the Stockholder shall, (i) when a meeting is held, appear at such
meeting or otherwise cause all Subject Shares to be counted or present
thereat for purposes of establishing a quorum, and (ii) vote (or cause
to be voted), including by executing a written consent, the Subject
Shares in favor of the adoption and approval of the Merger and all of
the Merger Agreement and all of the transactions contemplated thereby.
(b) The Stockholder hereby irrevocably grants to, and appoints,
Parent and Sub, or any of them, and any individual designated in
writing by any of them, and each of them individually, as the
Stockholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of the Stockholder,
to vote the Subject Shares of the Stockholder, or grant a consent or
approval in respect of the Subject Shares of the Stockholder in a
manner consistent with this Section 4 and to perform all other actions
as are required, authorized or contemplated to be taken by Stockholder
pursuant to this Agreement. The Stockholder understands and
acknowledges that Parent is entering into the Merger Agreement in
reliance upon the Stockholder's execution and delivery of this
Agreement. The Stockholder hereby affirms that the irrevocable proxy
and power of attorney set forth in this Section 4(b) is given in
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connection with the execution of the Merger Agreement, and that such
irrevocable proxy and power of attorney is given to secure the
performance of the duties of the Stockholder under this Agreement. The
Stockholder hereby further affirms that the irrevocable proxy and power
of attorney is coupled with an interest and may under no circumstances
be revoked. The Stockholder hereby ratifies and confirms all that such
irrevocable proxy and attorney-in-fact may lawfully do or cause to be
done by virtue hereof. Such irrevocable proxy is executed and intended
to be irrevocable in accordance with the provisions of Section
78.355(5) of the Nevada Revised Statutes. The irrevocable proxy and
power of attorney granted hereunder shall automatically terminate upon
the termination of Sections 4(a) and 4(c).
(c) So long as this Agreement is in effect, and for twelve (12)
months thereafter, at any meeting of stockholders of the Company or at
any adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the
Stockholder shall: (i) when a meeting is held, appear at such meeting
or otherwise cause all subject Shares to be counted or present thereat
for purposes of establishing a quorum, and (ii) vote (or cause to be
voted) the Subject Shares against (x) any merger agreement or merger
(other than the Merger Agreement and the Merger), consolidation,
combination, sale or transfer of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the
Company, (y) any Company Takeover Proposal and (z) any amendment of the
Company Charter or the Company By-laws or other proposal or transaction
involving the Company or any Company Subsidiary, which amendment or
other proposal or transaction would in any manner impede, delay,
frustrate, prevent or nullify the Merger or any provision of the Merger
Agreement or any of the transactions contemplated thereby (the
"Transactions") or change in any manner the voting rights of any class
of Company Capital Stock. The Stockholder shall not commit or agree to
take any action inconsistent with the foregoing. The Stockholder agrees
that, as a condition to the transfer, whether by operation of law or
otherwise, of legal or beneficial ownership of the Subject Shares by
the Stockholder to any person or entity which is an Affiliate of the
Stockholder or member of the Stockholder's family (an "Affiliated
Person"), the Stockholder shall obtain such person's or entity's
agreement in writing to be bound by the terms of this Section 4(c) and
Section 5.
(d) Other than pursuant to this Agreement, the Stockholder
shall not directly or indirectly (A) sell, transfer, pledge, encumber,
assign or otherwise dispose of (including by gift) (collectively,
"Transfer"), or enter into any Contract, option or other arrangement
(including any profit sharing arrangement) with respect to the Transfer
of, any Subject Shares to any Person other than in accordance with the
Merger or (B) grant any proxy, deposit any Subject Shares into any
voting trust or enter into any other agreement or arrangement related
to the voting of the Subject Shares, whether by proxy, voting agreement
or otherwise, with respect to any Subject Shares or (C) commit or agree
to take any of the foregoing actions.
(e) The Stockholder shall, and shall cause his, her or its
advisors, agents and representatives to, immediately cease any
discussions or negotiations that may be ongoing with respect to a
Company Takeover Proposal and request the prompt return or destruction
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of all confidential information previously furnished to any third
party. The Stockholder shall not, nor shall it authorize or permit any
officer, director or employee of, or any investment banker, attorney or
other adviser or representative of, the Stockholder to, (i) directly or
indirectly solicit, initiate or encourage the submission of any Company
Takeover Proposal, or take any action designed to facilitate any
inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Company Takeover Proposal, (ii)
enter into any agreement with respect to any Company Takeover Proposal
or that may reasonably be expected to lead to any Company Takeover
Proposal, (iii) directly or indirectly enter into, participate in or
continue any discussions or negotiations regarding, or furnish to any
Person any information with respect to, or otherwise cooperate with or
take any action to facilitate any Company Takeover Proposal or (iv)
make a Company Takeover Proposal. The Stockholder shall as promptly as
practical advise Parent orally and in writing of any Company Takeover
Proposal or any inquiry with respect to or that could reasonably be
expected to lead to any Company Takeover Proposal, and the identity of
the person making any such Company Takeover Proposal or inquiry and the
material terms of any such Company Takeover Proposal or inquiry. The
Stockholder shall keep Parent fully informed on a current basis of the
status of any such Company Takeover Proposal or inquiry and shall as
promptly as practical notify Parent orally and in writing of any
modification to the financial or other terms of such Company Takeover
Proposal or inquiry and shall as promptly as practical provide to
Parent a copy of all written material or correspondence (including
e-mail) subsequently provided to or by the Company in connection with
such Company Takeover Proposal or inquiry. Notwithstanding the
foregoing, if the Board of Directors of the Company determines pursuant
to and in accordance with Section 5.02 of the Merger Agreement to enter
into discussions with a third party or any of its representatives (the
"New Bidder") with respect to a Company Takeover Proposal, the
Stockholder may also enter into discussions or negotiations with such
New Bidder with respect to such Company Takeover Proposal, provided
that the restrictions set forth in this Section 4(e) will continue to
apply with respect to any other Person that makes an inquiry or
proposal that constitutes or would reasonably be expected to lead to a
Company Takeover Proposal, and will apply with respect to the New
Bidder as soon as the Company ceases its discussions and negotiations
with such New Bidder. Nothing contained in this Section 4(e) shall
prohibit the Stockholder from responding to any unsolicited proposal or
inquiry solely by advising the Person making such proposal or inquiry
of the terms of this Section 4(e).
(f) The Stockholder shall use its commercially reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, the Merger, the Merger Agreement and
the other Transactions. The Stockholder shall not issue any press
release or make any other public statement with respect to the Merger,
the Merger Agreement or any other Transaction without the prior consent
of Parent, except as may be required by applicable Law (including,
without limitation, making filings required by Sections 13(d) and 16 of
the Exchange Act).
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(g) The Stockholder hereby consents to and approves the actions
taken by the Company Board in approving the Merger, the Merger
Agreement and the other Transactions. The Stockholder hereby waives,
and agrees not to exercise or assert, any dissenter's rights under
Sections 92A.300 to 92A.500 of the Nevada Revised Statutes in
connection with the Merger.
(h) The Stockholder agrees to promptly notify Parent of the
number of any Subject Shares acquired by the Stockholder after the date
hereof.
(i) The Stockholder hereby covenants and agrees that the
Stockholder (a) except for any existing liens identified on Schedule A,
has not entered into and shall not enter into any agreement that would
restrict, limit or interfere with the performance of the Stockholder's
obligations hereunder and (b) shall not knowingly take any action that
would reasonably be expected to make any of his, her or its
representations or warranties contained herein untrue or incorrect or
have the effect of preventing or disabling him, her or it from
performing his, her or its obligations under this Agreement.
SECTION 5. Option.
(a) Stockholder hereby grants to Parent an irrevocable option
(the "Option") to purchase all the Subject Shares of such Stockholder
at a purchase price per share (the "Purchase Price") equal to $0.75.
The Option may be exercised in whole or in part, at any time after the
date hereof and prior to the date which is twelve (12) months after
termination of the Merger Agreement (such period, the "Exercise
Period"), so long as there shall not be in effect any preliminary
injunction or other order issued by any Governmental Entity prohibiting
the exercise of the Option pursuant to this Agreement; provided,
however, that if there shall be in effect any such injunction or order
on the expiration of the Exercise Period, the Exercise Period shall be
extended until five (5) business days after the date of removal or
lifting of such injunction or order; provided, further, that no such
extension shall extend the Exercise Period for more than eighteen (18)
months following the termination of the Merger Agreement.
(b) If Parent wishes to exercise the Option, it may do so by
giving written notice (the date of such notice being herein called the
"Notice Date") to Stockholder specifying that the Subject Shares are to
be purchased the number of Subject Shares that are to be purchased (the
"Purchased Shares") and specifying the place, time and date (not
earlier than one trading day, nor later than 10 trading days, from the
Notice Date) for the closing of the purchase by Parent pursuant to such
exercise. Upon exercise of the Option, Parent will pay the Purchase
Price for the Purchased Shares in cash; provided, however, that if
Parent exercises the Option prior to the Effective Time, the Parent may
at its option pay the Purchase Price for the Purchased Shares by
delivering a Note with a principal amount equal to the Purchase Price,
which accrues interest at the prime rate of interest per annum (as
reported in The Wall Street Journal) and that is due and payable on the
earlier of (i) one year from the date of issuance or (ii) the Effective
Time (the "Note"). If the Merger is not consummated within five (5)
months after the date of the Merger Agreement, the Parent may elect to
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sell the Purchased Shares back to the Stockholder in exchange for the
Note. If the Parent so elects the Stockholder shall surrender such Note
to Parent in exchange for the Purchased Shares.
(c) In addition, if the Merger Agreement is terminated pursuant
to Sections 8.01(c), 8.01(d) or 8.01(e) of the Merger Agreement or by
the Parent pursuant to Section 8.01(b)(i) of the Merger Agreement,
Stockholder shall pay to Parent on demand an amount equal to all Profit
(as defined below) realized by Stockholder or any Affiliated Person, in
connection with the consummation of any Company Takeover Proposal that
is consummated within twelve (12) months of such termination. Any
payment of Profit under this Section 5(c) shall be paid by wire
transfer of same day funds to an account designated by Parent.
For purposes of this Section 5, the Profit of Stockholder or an
Affiliated Person from any Company Takeover Proposal shall equal (A)
the aggregate consideration received by Stockholder or such Affiliated
Person with respect to the Subject Shares pursuant to such Company
Takeover Proposal (including but not limited to the face amount of any
debt of Stockholder which is forgiven or otherwise satisfied in
connection herewith), valuing any non-cash consideration (including any
residual interest in the Company) at its Fair Market Value on the date
of such consummation plus (B) the Fair Market Value, on the date of
disposition, of all Subject Shares of such Stockholder or Affiliated
Person disposed of after the termination of the Merger Agreement and
prior to the date of such consummation less (C) the Merger
Consideration that would have been received by the Stockholder or
Affiliated Person with respect to the Subject Shares pursuant to the
Merger Agreement as originally executed. For purposes of this Section
5, the Fair Market Value of any non-cash consideration consisting of:
(i) securities listed on a national securities exchange
or traded on the Nasdaq National Market shall be equal to the
average closing price per share of such security as reported on
such exchange or Nasdaq National Market for the five trading days
after the date of determination; and
(ii) debt of such Stockholder or Affiliated Person owed to
the Company shall be equal to the face amount of such debt, plus
all accrued and unpaid interest.
(iii) consideration which is other than cash or securities
of the form specified in clause (i) above or Stockholder or
Affiliated Person debt described in clause (ii) above shall be
determined in good faith the Board of Directors of the Company;
provided, that if Parent objects to the valuation as determined by
the Board of Directors of the Company (A) Parent shall notify the
Company of its objection, (B) Parent shall deliver to the Company
its good faith determination of the Fair Market Value of the
non-cash consideration and (C) Parent and the Company shall engage
a nationally recognized independent investment banking firm
mutually agreed upon by the parties within 10 business days of the
Company's receipt of Parent's notice of objection; provided,
further, that if the parties are unable to agree within two
business days after the date of such event as to the investment
banking firm, then the parties shall each select one firm, and
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those firms shall select a third investment banking firm, which
third firm shall make such determination; provided, further that
the fees and expenses of the investment banking firm shall be
borne by the person whose estimate of Fair Market Value is
furthest from the amount as finally determined by the investment
banking firm.
SECTION 6. Agreements of the Parties.
(a) Proceeds from Shares . At the Effective Time of the Merger
(i) Stockholder agrees that he will not directly receive any cash
proceeds in connection with his ownership of the Subject Shares, but
instead the parties agree (and Stockholder hereby directs) that all
Merger Consideration otherwise payable in respect of the Subject Shares
shall instead be delivered to the Surviving Corporation and applied to
reduce the outstanding principal balance of the Stockholder Note, (ii)
all Subject Shares shall automatically be canceled and retired and
cease to exist pursuant to the terms of the Merger Agreement, and (iii)
the Company will extend the maturity of the remaining amounts under the
Stockholder Note to December 31, 2013.
(b) The Company hereby consents to the grant of the Option by
the Stockholder to Parent and the other transactions and agreements
contained herein. Upon exercise by Parent of the Option, (i) all of the
Subject Shares with respect to which the Option is being exercised
which have been pledged by the Stockholder pursuant to the Pledge
Agreement (the "Pledged Subject Shares") shall automatically, and
without any further action of the parties, be released from the
security interest in favor of the Company created pursuant to the
Pledge Agreement and (ii) the Company shall immediately deliver the
certificate or certificates representing the Pledged Subject Shares to
Parent.
(c) The Company acknowledges and agrees that any rights it may
have to vote or give or withhold consents with respect to the Pledged
Shares upon the occurrence of an Event of Default (as defined in the
Pledge Agreement) shall be subject to the obligations of the
Stockholder to vote the Subject Shares in the manner set forth in
Sections 4(a) and 4(c) hereof and the proxy and power of attorney
granted by the Stockholder to Parent and Sub pursuant to Section 4(b)
hereof. The Stockholder hereby grants to the Company a first priority
security interest in all of the proceeds of the Option, including but
not limited to, the Note and all proceeds of the Note. Stockholder
shall from time to time, at the request of the Company, execute such
further instruments and agreements required to evidence such security
interest and the Company may file UCC-1 financing statements necessary
or desirable to perfect such security interest.
(d) Withholding. The Company shall be entitled to deduct and
withhold from any payments due hereunder such amounts as the Company is
required to deduct and withhold with respect to the making of such
payments under any provision of Federal, state or local income tax law.
If the amounts payable hereunder are insufficient to satisfy the
withholding obligations of the Company with respect to the transactions
contemplated hereby, Stockholder shall immediately pay to the Company,
by check or wire transfer of immediately available funds, an amount
equal to the deficiency.
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SECTION 7. Termination. This Agreement shall terminate upon the
earlier of (a) the Effective Time and (b) the termination of the Merger
Agreement; provided that, except as set forth in the next sentence, Sections
4(c), 5, 7, 8 and 9 shall survive any termination of this Agreement pursuant to
Section 5(b). Notwithstanding the foregoing, if
(i) the conditions set forth in Sections 7.01 and 7.02 of
the Merger Agreement are satisfied or would be satisfied upon the
Company's performance of its obligations at Closing and Parent and
Sub fail to close notwithstanding the Company's confirmation that
it remains ready, willing and able to proceed with the Closing, or
(ii) Parent and Sub willfully breach a material obligation
contained in the Merger Agreement and the Company gives written
notice to Parent and Sub of such breach, and Parent and Sub fail
to cure such breach within fifteen (15) business days of the
receipt of such notice,
then Stockholder shall be entitled to give notice to Parent and Sub that it is
terminating Sections 4(c) and 5(a) of this Agreement. No party hereto shall be
relieved from any liability for breach of this Agreement by reason of any such
termination.
SECTION 8. Additional Matters.
(a) Stockholder and the Company shall, from time to time,
execute and deliver, or cause to be executed and delivered, such
additional or further consents, documents and other instruments as
Parent may reasonably request, including any amendments to the Pledge
Agreement, for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
(b) No person executing this Agreement who is or becomes during
the term hereof a director or officer of the Company makes any
agreement or understanding herein in his or her capacity as a director
or officer of the Company. Stockholder is entering into this Agreement
solely in his, her or its capacity as the record holder and beneficial
owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, the Subject Shares and nothing herein shall limit
or affect any actions taken by Stockholder in his or her capacity as an
officer or director of the Company to the extent specifically permitted
by the Merger Agreement.
(c) The Stockholder agrees that this Agreement and the
obligations hereunder shall attach to the Subject Shares and shall be
binding upon any person or entity to which legal or beneficial
ownership of such Subject Shares shall pass, whether by operation of
law or otherwise, including the Stockholder's successors. In the event
of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of the
Company affecting the Company Common Stock, or the acquisition of
additional shares of Company Common Stock or other voting securities of
the Company by the Stockholder (whether by purchase, conversion or
otherwise), the number of Subject Shares listed on Schedule A set forth
opposite the name of such Stockholder shall be adjusted appropriately
and this Agreement and the obligations hereunder shall attach to any
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additional or decreased shares of Company Common Stock or other voting
securities of the Company issued to or acquired or disposed of by such
Stockholder.
SECTION 9. General Provisions.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to Parent in
accordance with Section 9.02 of the Merger Agreement and to the
Stockholder at its address set forth on Schedule A hereto (or at such
other address for a party as shall be specified by like notice).
(c) Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Wherever the words
"include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
(d) Severability. If any provision of this Agreement is held to
be invalid or unenforceable for any reason, it shall be adjusted rather
than voided, if possible, in order to achieve the intent of the parties
hereto to the maximum extent possible. In any event, the invalidity or
unenforceability of any provision of this Agreement in any jurisdiction
shall not affect the validity or enforceability of the remainder of
this Agreement in that jurisdiction or the validity or enforceability
of this Agreement, including that provision, in any other jurisdiction.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement. This Agreement shall become effective against Parent when
one or more counterparts have been signed by Parent and delivered to
Stockholder. This Agreement shall become effective against Stockholder
when one or more counterparts have been executed by Stockholder and
delivered to Parent. Each party need not sign the same counterpart. Any
counterpart may be executed by facsimile signature and such facsimile
signature shall be deemed an original.
(f) Entire Agreement; No Third-Party Beneficiaries. This
Agreement and the Merger 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. This
Agreement is not intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
(g) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Nevada
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.
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(h) Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise, by Parent without
the prior written consent of Stockholder or by Stockholder without the
prior written consent of Parent, and any purported assignment without
such consent shall be void; provided that notwithstanding the foregoing
Parent may assign or transfer its rights, interests and obligations
under this Agreement to any Person to which Parent assigns or transfers
its rights, interests and obligation under the Merger Agreement in
accordance with the Merger Agreement. Subject to the preceding
sentences, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors
and assigns.
(i) Remedies. No failure or delay by any party in exercising
any right, power or privilege under this Agreement shall operate as a
waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies provided
herein shall be cumulative and not exclusive of any rights or remedies
provided by law or in equity. Parent shall be entitled to recover its
reasonable attorney's fees and expenses in enforcing its rights under
this Agreement.
(j) Jurisdiction; Waiver of Jury Trial.
(i) Each of the parties hereto irrevocably and
unconditionally (x) agrees that any legal suit, action or
proceeding brought by any party hereto arising out of or based
upon this Agreement or the transactions contemplated hereby may be
brought in any Florida state court or any Federal court located in
the state of Florida (in each case, located in Miami-Dade county)
or any Nevada state court or any Federal court located in the
state of Nevada (in each case, located in Xxxxx county) (each, a
"Designated Court"), (y) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter
have to the laying of venue of any such proceeding brought in any
Designated Court, and any claim that any such action or proceeding
brought in any Designated Court has been brought in an
inconvenient forum, and (z) submits to the non-exclusive
jurisdiction of Designated Courts in any such suit, action or
proceeding. Each of the parties agrees that a judgment in any
suit, action or proceeding brought in a Designated Court shall be
conclusive and binding upon it and may be enforced in any other
courts to whose jurisdiction it is or may be subject, by suit upon
such judgment.
(ii) EACH OF THE PARTIES AGREES AND ACKNOWLEDGES THAT ANY
CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELOCATING TO THIS
AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS
AGREEMENT.
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(k) Specific Performance. Each Stockholder acknowledges and
agrees that (a) the covenants, obligations and agreements of
Stockholder contained in this Agreement relate to special, unique and
extraordinary matters, (b) Parent is and will be relying on such
covenants in connection with entering into the Merger Agreement and the
performance of its obligations under the Merger Agreement and (c) a
violation of any of the terms of such covenants, obligations or
agreements will cause Parent irreparable injury for which adequate
remedies are not available at law. Therefore, Stockholder agrees that
Parent shall be entitled to an injunction, restraining order or such
other equitable relief (without the requirement to post bond) as a
court of competent jurisdiction may deem necessary or appropriate to
restrain Stockholder from committing any violation of such covenants,
obligations or agreements. These injunctive remedies are cumulative and
in addition to any other rights and remedies Parent may have.
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IN WITNESS WHEREOF, each party has duly executed this Agreement, all as
of the date first written above.
WT ACQUISITION HOLDINGS, LLC
By: /s/ XXXX XXXXXX
--------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
WARRANTECH CORPORATION
By: /s/ XXXX SAN XXXXXXX
--------------------------------
Name: Xxxx San Antonio
Title: Chief Executive Officer
/s/ XXXXXXX XXXXX
-----------------------------
Xxxxxxx Xxxxx
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SCHEDULE A
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Number of Shares
Number of Shares of of Company
Name and Address Company Common Stock
of Stockholder Common Stock Beneficially Owned held in "Street name"
-------------- ------------------------------- ---------------------
Xxxxxxx Xxxxx 1,629,000 None
Liens on Subject Shares:
963,775 shares pledged to Warrantech
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