Exhibit 7.2
ANNEX B
VOTING AGREEMENT
This Voting Agreement (this "Agreement") is entered into as of August 11, 1998
among some or all of the individuals and other parties listed on Schedule A
hereto (each, a "Stockholder" and, collectively the "Stockholders"), KINGSWAY
FINANCIAL SERVICES INC. ("Kingsway Financial"), KINGSWAY AMERICA, INC. (the
"Buyer") and W ACQUISITION CORPORATION (the "Buyer Sub"), as acknowledged by
XXXXXXXX ASSURANCE COMPANY, a Pennsylvania corporation (the "Company").
Simultaneously with the execution and delivery of this Agreement, the Company,
Kingsway Financial, the Buyer and the Buyer Sub have executed and delivered an
Agreement and Plan of Merger dated as of the date of this Agreement (as in
effect from time to time, the "Merger Agreement"). The Stockholders are entering
into this Agreement as a material inducement and condition to Kingsway
Financial, Buyer and Buyer Sub entering into the Merger Agreement. Each term is
used and not otherwise defined in this Agreement has the meaning which the
Merger Agreement assigns to that term.
The parties to this Agreement hereby agree as follows:
1. LIMITATIONS ON TRANSFER AND OTHER ACTIONS. During the period (the
"Agreement Period") beginning on the date of this Agreement and ending on
the earlier of (i) the Effective Time, and (ii) the termination of the
Merger Agreement in accordance with Article XI thereof, each Stockholder
hereby agrees that he or it will not, and will not enter into any contract,
option or other undertaking to, sell, transfer, assign or otherwise dispose
of any shares of capital stock or other securities of the Company or any
options or other securities which are directly or indirectly convertible
into or exercisable or exchangeable for capital stock or other securities
of the Company (collectively, "Company Stock or Equivalents"), or any
interest therein, or grant any right or proxy to vote or grant consent in
lieu of a vote with respect to any Company Stock or Equivalent, now owned
or hereafter acquired by the Stockholder, other than pursuant to the terms
of the Merger or of Section 6 hereof, unless the Person to which such
Company Stock or Equivalents, or interest therein, is or may be sold,
transferred, assigned, otherwise disposed of, or to which such right or
proxy is or may be granted, executes a counterpart of this Agreement and
agrees to be bound by the terms and conditions hereof as a Stockholder.
2. AGREEMENT TO VOTE. During the Agreement Period, unless otherwise
directed in writing by the Buyer:
(a) Each Stockholder hereby agrees to vote (or cause to be voted) all
Company Stock or Equivalents which the Stockholder is entitled to vote to
approve and adopt the Merger, the Merger Agreement and all other matters
contemplated by the Merger Agreement or this Agreement, in connection with
any meeting or meetings of, or solicitations of consents from, the
securityholders of the Company, and at any adjournment thereof, at which or
in connection with which the Merger, the Merger Agreement or any such
related matter is submitted for the consideration and vote of
securityholders of the Company.
(b) Each Stockholder hereby agrees to vote (or cause to be voted) all
Company Stock or Equivalents which the Stockholder is entitled to vote
against (i) any Acquisition Proposal or (ii) any amendment of the Company's
certificate of incorporation or by-laws or other proposal or transaction
involving the Company, which amendment or other proposal or transaction
would be reasonably likely to impede, frustrate, prevent or nullify the
Merger, the Merger Agreement or any of the other transactions contemplated
by the Merger Agreement or change in any manner the voting rights of Common
Stock. Each Stockholder further agrees not to enter into any agreement
inconsistent with the foregoing.
3. OTHER AGREEMENTS.
(a) Each Stockholder shall not (and shall cause each affiliate, employee,
officer, director, shareholder or agent of such Stockholder or trustee or
other person acting on (or purporting to act on) his, her or its behalf,
not to) solicit, discuss or negotiate with any other person (other than
Buyer and its officers, directors, affiliates and representatives) any
Acquisition Proposal, or provide any information to any other person
concerning the Company or any Company Subsidiary (other as may be required
by applicable legal requirements). No Stockholder nor any affiliate,
employee, officer, director, shareholder or agent , trustee or other person
acting on his, her or its behalf has entered into any agreement,
arrangement or understanding with respect to any Acquisition Proposal, and
each Stockholder shall (and shall cause each affiliate, employee, officer,
director, shareholder or agent of such Stockholder or trustee or other
person acting on (or purporting to act on) his, her or its behalf, to) (a)
cease and cause to be terminated any and all discussions regarding any
Acquisition Proposal and (b) notify Buyer if any Acquisition Proposal, or
any inquiry or contact with any person with respect thereto, is made and
disclose to Buyer the substance thereof.
(b) Until after the Merger is consummated or the Merger Agreement is
terminated, each Stockholder shall use his or its 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 Merger and the other transactions
contemplated by the Merger Agreement.
(c) Notwithstanding anything to the contrary in this Section 3 or elsewhere
in this Agreement, during the Agreement Period, each Stockholder may, to
the extent such Stockholder shall determine that the proper exercise of his
fiduciary duties, if any, to the Company as a director or officer of the
Company require him to do so, (i) engage in negotiations or discussions
concerning, and provide nonpublic information to a Person who makes or who
indicates a desire to make, an Acquisition Proposal, and (ii) agree to,
approve or recommend, and enter into an agreement, arrangement or
understanding with respect to, an Acquisition Proposal.
4. QUANTITY OF STOCK HELD.
(a) Each Stockholder represents and warrants to Buyer and Buyer Sub that it
is the record and beneficial owner of, or is trustee of a trust that is the
record holder of, and whose beneficiaries are the beneficial owners of, and
has good and marketable title to, the number of shares of Company Stock or
Equivalents set forth opposite his or its name on Schedule A attached
hereto, free and clear of any claims, liens, encumbrances and security
interests whatsoever. No Stockholder owns, on record or beneficially, any
shares of capital stock of the Company other than the Company Stock or
Equivalents set forth opposite his or its name on Schedule A attached
hereto.
5. OTHER REPRESENTATIONS AND WARRANTIES. Each Stockholder, severally and
not jointly, represents and warrants in respect of itself to the Buyer and
the Buyer Sub that:
(a) Each Stockholder has the necessary power and authority to enter into
this Agreement and to perform their respective obligations under this
Agreement. The execution and delivery of this Agreement by each Stockholder
who is not an individual and the performance of their respective
obligations under this Agreement have been duly and validly authorized by
all necessary action and no other proceedings on the part of any such
Stockholder are necessary to authorize such execution, delivery or
performance.
(b) The execution and delivery of this Agreement by each Stockholder does
not, and the performance by the Stockholders of their respective
obligations under this Agreement will not, (i) conflict with or violate the
certificate or articles of incorporation, bylaws, partnership agreement,
trust instrument or other organizational document (if any) of any such
person, (ii) conflict with or violate any legal requirement applicable to
any such person or by which any of its properties or assets (including any
Company Stock or Equivalents held by it) is bound or affected, or (iii)
result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of any Encumbrance on any Company Stock or
Equivalents held by it pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument
or obligation to which the such person is a party or by which such person
or any of its properties or assets (including any Company Stock or
Equivalents held by it) is bound or affected.
(c) The execution and delivery of this Agreement by the Stockholders does
not, and the performance of this Agreement by the Stockholders will not,
require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Body, except for any filing which may
be required by the rules promulgated pursuant to the Exchange Act.
6. GRANT OF IRREVOCABLE PROXY; APPOINTMENT OF PROXY.
(a) Each Stockholder hereby irrevocably grants to, and appoints, Buyer and
Xxxxxxx X. Star and Xxxxx Xxxxxxx, in their respective capacities as
officers of Buyer, and any individual who shall hereafter succeed to any
such office of Buyer, and each of them individually, his or its proxy and
attorney-in-fact (with full power of substitution), for and in the name,
place and stead of the Stockholder, to vote his or its Company Stock or
Equivalents or grant a consent of approval in respect of such Company Stock
or Equivalents (i) to approve and adopt the Merger, the Merger Agreement
and all other matters contemplated by the Merger Agreement or this
Agreement, (ii) against any Acquisition Proposal and (iii) against any
amendment of the Company's Articles of Incorporation or By-Laws, or other
proposal or transaction (including any consent solicitation to remove or
elect any directors of the Company) involving the Company which amendment
or other proposal or transaction would be reasonably likely to impede,
frustrate, prevent or nullify, or result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the
Company under or with respect to the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement.
(b) Each Stockholder represents that any proxies heretofore given in
respect of Company Stock or Equivalents are not irrevocable, and that any
such proxies are hereby revoked.
(c) Each Stockholder hereby affirms that the irrevocable proxy set forth in
this Section 6 is given in connection with and as a condition to the
execution of the Merger Agreement by the Buyer and the Buyer Sub, and that
such irrevocable proxy is given to secure the performance of the duties of
the Stockholder under this Agreement. Each Stockholder hereby further
affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked. Such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of Section
1759 of the Pennsylvania Statutes.
(d) The proxy granted hereby shall terminate upon the earlier of the
Effective Time or the termination of the Merger Agreement in accordance
with Article XI thereof.
7. ACCEPTANCE BY THE STOCKHOLDERS. Each Stockholder, by its execution of
this Agreement, accepts delivery of this Agreement, and agrees to make note
of same in its corporate books and records, if any, and to take such steps
as are necessary and in compliance with applicable law to give effect to
the intent and purpose of this Agreement.
8. FURTHER ASSURANCES. Each Stockholder will, at the Buyer's expense, from
time to time, execute and deliver, or cause to be executed and delivered,
such additional or further consents, documents and other instruments as the
Buyer may reasonably request for the purpose of effectively carrying out
the transactions contemplated by this Agreement.
9. CERTAIN EVENTS. Each Stockholder agrees that this Agreement and the
obligations hereunder shall attach to such person's Company Stock or
Equivalents and shall be binding upon any person to which legal or
beneficial ownership of such person's Company Stock or Equivalents shall
pass, whether by operation of law or otherwise, including without
limitation such person's heirs, guardians, administrators or successors. In
the event of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of the Company or
the acquisition of additional Company Stock or Equivalents by any
Stockholder the number of Company Stock or Equivalents listed in Schedule A
beside the name of such Stockholder shall be adjusted appropriately and
this Agreement and the obligations hereunder shall attach to such
additional Company Stock or Equivalents.
10. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and,
except as otherwise provided in this Agreement, shall be deemed to have
been duly given if so given) if delivered in person, or sent by overnight
courier service or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties as follows:
If to the Company or any Stockholder at the address set forth next to such
Stockholder's name on Schedule A attached hereto.
with a copy (which shall not constitute notice) to:
Blank Rome Comisky & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esquire
If to Buyer or Buyer Sub:
Kingsway Financial Services Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx X0X 0XX
Attention: Xxxxxxx X. Star
with a copy to:
Xxxxxxx, Xxxxx & Xxxxxxxxx
00 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxx XX0 0X0
Attention: J. Xxxxx Xxxxx, Esq.
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall only be
effective upon receipt.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but each of
which together shall constitute one and the same document.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Pennsylvania,
without giving effect to the principles of conflicts of laws thereof.
13. SPECIFIC PERFORMANCE. The parties hereto agree that if any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur,
no adequate remedy at law would exist and damages would be difficult to
determine, and that the parties shall (without the posting of bond or other
security), be entitled to obtain from any court of competent jurisdiction
specific performance of the terms hereof, in addition to any other remedy
at law or equity.
14. BINDING EFFECT. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the successors and assigns of the parties
hereto. Nothing expressed or referred to in this Agreement is intended or
shall be construed to give any person other than the parties to this
Agreement, or their respective successors or assigns, any legal or
equitable right, remedy or claim under or in respect of this Agreement or
any provision contained herein.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof.
16. SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
17. 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 party; provided, however, that without obtaining such
consent the Buyer or the Buyer Sub may assign all of its rights hereunder
to any person to whom the Buyer Sub would be permitted to assign its rights
under the Merger Agreement. No such assignment shall relieve any party
hereto of its obligations hereunder if such transferee does not perform
such obligations.
18. MISCELLANEOUS. 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. References to Sections, subsections and
clauses referred to Sections, subsections and clauses of this Agreement
unless otherwise stated.
IN WITNESS WHEREOF, the parties hereto have executed this Voting Agreement as of
the date first set forth above.
KINGSWAY FINANCIAL SERVICES INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President & CEO
KINGSWAY AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President & CEO
STOCKHOLDERS:
/s/ Xxxxx X. Xxxxxxx
---------------------------------
(Xxxxx X. Xxxxxxx)
/s/ Xxxx X. Xxxxxx, Xx.
---------------------------------
(Xxxx X. Xxxxxx, Xx.)
INTERSTATE INSURANCE
MANAGEMENT, INC.
/s/ Xxxx X. Xxxxxx, Xx.
----------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: President
/s/ Xxxxxxx X. Xxxx, Xx.
----------------------------------
(Xxxxxxx X. Xxxx, Xx.)
MEMORIAL SURGICAL ASSOCIATES
RETIREMENT
By:/s/ Xxxxxxx X. Xxxx, Xx.
-------------------------------
Xxxxxxx X. Xxxx, Xx.
Title: President
/s/ Xxxx X. Xxxxxxxx
----------------------------------
(Xxxx X. Xxxxxxxx)
/s/ Xxxxxxx Xxxxxxx
----------------------------------
(Xxxxxxx Xxxxxxx)
/s/ L. Xxxxxx Xxxxxxx, Xx.
----------------------------------
(L. Xxxxxx Xxxxxxx, Xx.)
/s/ Xxx X. Xxxxxxx, Xx.
----------------------------------
(Xxx X. Xxxxxxx, Xx.)
/s/ Xxxxxxx X. Xxxxxx
----------------------------------
(Xxxxxxx X. Xxxxxx)
XXXXXX & XXXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
/s/ Xxxxxxx X. Xxxxxxx, Xx.
----------------------------------
(Xxxxxxx X. Xxxxxxx, Xx.)
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
(Xxxxxx Xxxxxxx)
TRUSTEE UNDER IRREVOCABLE
AGREEMENT WITH XXXXX XXXXXXX,
XXXXXXX X. XXXXXXX, XX.,
XXXXX XXXXXXX, XXXXXX XXXXXXX OF
XXXXXXX X. XXXXXXX-- FAMILY TRUST
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.,
Title: Trustee
TRUSTEE UNDER IRREVOCABLE
AGREEMENT WITH XXXXX XXXXXXX,
XXXXXXX X. XXXXXXX, XX.,
XXXXX XXXXXXX, XXXXXX XXXXXXX OF
XXXXXXX X. XXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.,
Title: Trustee
Acknowledged as of the date first above written
XXXXXXXX ASSURANCE COMPANY
By /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
SCHEDULE A
NO. OF NO. OF COMMON
STOCKHOLDER NAME AND ADDRESS COMMON SHARES SHARE EQUIVALENTS
Xxxxx X. Xxxxxxx 110 12,200
000 Xxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Xxxx X. Xxxxxx, Xx. 1,536 32,883
0000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Interstate Insurance
Management, Inc. 53,345 --
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx X. Xxxx, Xx. 54,394 32,883
0000 X. Xxxxxx Xxxxxx
Xxxx, XX 00000
Memorial Surgical
Associates Retirement Fund 19,514 --
c/o Xxxxxxx X. Xxxx, Xx.
0000 X. Xxxxxx Xxxxxx
Xxxx, XX 00000
Xxxxxxx X. Xxxx, Xx. 406,443 --
000 Xxxxxxx Xxxxx
Xxxxx Xxxx Xxxxxx
Xxxx, XX 00000
Xxxx Xxxx 70,620 --
000 Xxxxxxx Xxxxx
Xxxxx Xxxx Xxxxxx
Xxxx, XX 00000
Xxxx X. Xxxxxxxx 7,979 40,113
0000 Xxxxxxxxxx Xxxx
Xxxx, XX 00000
L. Xxxxxx Xxxxxxx, Xx. 217,762 10,798
Xxxxxxx Insurance Agency, Inc.
Xxx Xxxxx 00 Xxxx
Xxxxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxx 10,660 --
c/o L. Xxxxxx Xxxxxxx, Xx.
Xxxxxxx Insurance Agency, Inc.
Xxx Xxxxx 00 Xxxx
Xxxxxxxxxxxx, XX 00000
Xxx X. Xxxxxxx, Xx. 186,000 --
00 Xxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
8
Xxxxxxx X. Xxxxxx 442,246 210,059
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxx & Ochroch, Inc. 18,319 --
000 Xxx Xxxx
Xxxx xx Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx, Xx. 8,424 24,805
Insurance Markets, Inc.
000 Xxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Xxxxxx Xxxxxxx 20,349 --
c/o Xxxxxxx X. Xxxxxxx, Xx.
Insurance Markets, Inc.
000 Xxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Trustee Under Irrevocable Agreement With 51,637 --
Xxxxx Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xx.,
Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx of
Xxxxxxx X. Xxxxxxx --Family Trust
c/o Xxxxxx X. Xxxxxxx, Xx.
Insurance Markets, Inc.
000 Xxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Trustee Under Irrevocable Agreement With 47,478 --
Xxxxx Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xx.,
Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx of
Xxxxxxx X. Xxxxxxx
c/o Xxxxxxx X. Xxxxxxx, Xx.
Insurance Markets, Inc.
000 Xxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000
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