EXECUTION COPY
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT (this "Agreement"), dated as of July 10, 2000, by
and among Waxman USA Inc., a Delaware corporation ("Stockholder"), Waxman
Industries, Inc., a Delaware corporation ("Parent"), Wilmar Industries, Inc., a
New Jersey corporation ("Wilmar") and BW Acquisition, Inc., a Delaware
corporation and a wholly-owned subsidiary of Wilmar, ("BW Acquisition" and,
together with Wilmar, "Purchaser").
W I T N E S S E T H:
WHEREAS, concurrently herewith, Purchaser and Xxxxxxx Inc., a Delaware
corporation (the "Company"), are entering into an Agreement and Plan of Merger
of even date herewith (the "Merger Agreement"), pursuant to which Purchaser will
acquire all of the outstanding shares of common stock, $0.01 par value per
share, of Company (the "Common Stock"), for the Merger Consideration, as defined
in the Merger Agreement in effect on the date hereof, pursuant to a merger of BW
Acquisition with and into Company (the "Merger");
WHEREAS, the Stockholder is a holder of record and Beneficially Owns
(as defined herein), as of the date hereof, 7,186,530 shares of Common Stock
(the "Existing Shares", together with any shares of Common Stock acquired after
the date hereof and prior to the termination hereof, hereinafter collectively
referred to as the "Shares"), of which 1,000,000 Existing Shares are pledged
(the "Pledged Shares") to Congress Financial Corporation ("Congress") as
collateral security for the Stockholder's obligations to Congress pursuant to
that certain Loan and Security Agreement, dated as of June 17, 1999 and amended
as of December 8, 1999, March 29, 2000, May 1, 2000 and July __, 2000, by and
among Congress, Waxman Consumer Products Group, Inc., WOC Inc., Western American
Manufacturing Inc., WAMI Sales, Inc., Stockholder, Parent and TWI,
International, Inc. (the "Congress Credit Facility");
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, and in reliance upon Stockholder's representations, warranties,
covenants and agreements hereunder, Purchaser has required that Stockholder
agree, and Stockholder has agreed, to enter into this Agreement; and
WHEREAS, this Agreement is being entered into concurrently with the
execution of the Merger Agreement.
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained and for such other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Definitions.
1.1 Capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Merger Agreement.
1.2 For purposes of this Agreement, "Beneficially Own" or "Beneficial
Ownership" with respect to any securities shall mean "beneficial
ownership" of such securities (as determined pursuant to Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), including pursuant to any agreement, arrangement or
understanding, whether or not in writing.
2. Agreement to Vote; Proxy.
2.1 Agreement to Vote. Stockholder hereby agrees that, except as expressly
set forth below, during the time this Agreement is in effect, at any
meeting of the stockholders of Company, however called, and in any
action by consent of the stockholders of Company, Stockholder shall
vote, or cause the holder of record on any applicable record date with
respect to any of the Pledged Shares Beneficially Owned by such
Stockholder (the "Record Holder") to vote, in person or by proxy, the
Pledged Shares: (a) in favor of the Merger; (b) against any action or
agreement that would result in a breach of any covenant, representation
or warranty or any other obligation or agreement of Company under the
Merger Agreement; and (c) against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the
Merger including, but not limited to, (i) any extraordinary corporate
transaction (other than the Merger), such as a merger, other business
combination, reorganization, consolidation, recapitalization,
dissolution or liquidation involving Company (a "Business Combination
Transaction"), (ii) a sale or transfer of a material amount of assets
of Company or any of its subsidiaries, (iii) any change in the
management or board of directors of Company, except as otherwise agreed
to in writing by Purchaser, (iv) any change in the present
capitalization of the Company, or (v) any other change in the corporate
structure (including the charter, by-laws or other organizational or
constitutive documents) or business of the Company. Stockholder agrees,
without limiting the foregoing, that it shall consult with Purchaser
prior to any such vote and vote, or cause the Record Holder to vote,
the Pledged Shares in such manner as is in compliance with the
provisions of this Section 2. Stockholder acknowledges receipt and
review of a copy of the Merger Agreement.
2.2 Proxy. In furtherance of Section 2.1, Stockholder hereby grants to
Purchaser a proxy to vote the Pledged Shares in accordance with the
terms and conditions of this Agreement, it being understood that such
proxy is coupled with an interest. Contemporaneously with the execution
of this Agreement, Stockholder shall deliver to Purchaser the proxy in
the form attached hereto as Exhibit A (the "Proxy").
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3. Parent. Parent agrees to cause the Stockholder to take (or omit to
take) the action set forth above in Section 2.1.
4. Voting Trust Arrangement.
4.1 Voting Trust Agreement. Contemporaneously herewith, Stockholder hereby
delivers to American Stock Transfer & Trust Company, as voting trustee
(the "Voting Trustee") under and pursuant to that certain Voting Trust
Agreement dated today's date (the "Voting Trust Agreement"), the
certificates representing all of the Existing Shares, other than the
Pledged Shares, together with five duly executed stock powers, endorsed
in blank (the "Stock Powers"). If for any reason Stockholder receives
the right to vote with respect to any or all Shares held in the Voting
Trust, at any time or from time to time, after the date hereof and
prior to the termination of the Voting Trust Agreement, Stockholder
agrees that all such Shares shall be governed by this Agreement and
Stockholder shall vote with respect to such Shares in compliance with
the terms of this Agreement, as if such Shares were originally included
herein, until such time as the right to vote with respect such Shares
reverts to the Voting Trustee. Stockholder agrees and covenants not to
take any action inconsistent with the terms of the Voting Trust
Agreement.
4.2 Release of Certain Shares from Voting Trust. If (a) the Effective Time
has not occurred on or prior to September 1, 2000 and (b) the Company
has not repurchased from the Stockholder shares of Common Stock having
a value of $2,000,000 (the "Purchase Shares") in accordance with that
certain agreement, dated as of the date hereof, by and between the
Stockholder and the Company (the "Xxxxxxx Agreement"), by September 8,
2000, then the Stockholder shall be entitled to have transferred to it
by the Voting Trustee the Purchase Shares.
5. Representations and Warranties of Stockholder. Stockholder and Parent
jointly and severally represent and warrant to Purchaser as follows:
5.1 Ownership of Shares. On the date hereof, the Existing Shares are all of
the Shares currently Beneficially Owned by the Stockholder or any
affiliate of the Stockholder, excluding a de minimus number of shares
of Common Stock held by Xxxxxx Xxxxxx, Xxxxxx Xxxxxx and members of
their families. Stockholder currently has with respect to the Existing
Shares and, at all times up to and including the Effective Time, will
have with respect to the Shares (other than any Shares purchased by the
Company pursuant to the Merger Agreement), good, valid and marketable
title, free and clear of all liens, encumbrances, restrictions,
options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created
by (a) this Agreement and the Voting Trust Agreement, (b) the pledge of
1,000,000 Shares to Congress, (c) restrictions on transfer under
applicable federal and state securities and antitrust laws, (d)
restrictions under the Congress Credit Facility (which restrictions,
with respect to the transactions contemplated by the Merger Agreement,
this Agreement and the Voting Trust Agreement, have been waived by
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Congress as set forth in that certain letter, dated July 9, 2000, from
Congress to Parent and certain of its subsidiaries party to the
Congress Credit Facility (the "Congress Consent Letter"), (e)
restrictions under that certain indenture, dated as of May 20, 1994 (as
amended from time to time, the "DC Notes Indenture"), by and between
Waxman Industries, Inc. and The Huntington National Bank, as trustee,
relating to Waxman Industries, Inc.'s 12 3/4% Senior Secured Deferred
Coupon Notes due 2004, and that certain indenture dated as of April 1,
1996 (as amended from time to time, the "Senior Notes Indenture" and
together with the DC Notes Indenture, the "Indentures"), by and between
Waxman USA Inc. and the United States Trust Company of New York, as
trustee, relating to Waxman USA Inc.'s 11 1/8% Senior Notes, due 2001
and (f) that certain agreement dated December 8, 1999 (the "Noteholder
Agreement") by and among Parent, Stockholder, and each of the holders
therein named (each, a "Consenting Noteholder") of the 12 3/4% Deferred
Coupon Secured Notes, due 2004, some of whom also hold the 11 1/8%
Senior Notes, due 2001 (which restrictions, with respect to the
transactions contemplated by the Merger Agreement, this Agreement and
the Voting Trust Agreement, in clauses (e) and (f) have been waived by
the requisite holders under the Indentures or the Noteholder Agreement,
as applicable, as set forth in that certain Amendment, Consent and
Waiver, dated July 9, 2000, by and among Parent, Stockholder and the
Consenting Noteholders named therein.)
5.2 Power; Authority; Binding Agreement; and Non-contravention. Each of
Parent and Stockholder has the full legal right, power and authority to
enter into this Agreement and the Voting Trust Agreement, and to
perform all of its obligations under this Agreement and the Voting
Trust Agreement in accordance with the terms and conditions hereof and
thereof, and Stockholder has the full legal right, power and authority
to enter into the Proxy contemplated hereby. The execution, delivery
and performance of this Agreement and the Voting Trust Agreement by
each of Parent and Stockholder, and the grant of the Proxy by
Stockholder, will not violate (a) its charter, by-laws, or other
organizational documents, (b) any agreement to which Parent or
Stockholder is a party, including, without limitation, (i) any voting
agreement, stockholder agreement or voting trust to which Parent or
Stockholder is a party, (ii) any agreement with Congress or involving
or related to the credit arrangements between Parent or Stockholder and
Congress or (iii) any of the Indentures or other agreement related to
the credit arrangements which are the subject matter of the Indentures,
or (c) assuming the receipt of the approval of the holders of a
majority of the outstanding voting common stock of Parent, any law,
rule, regulation or order applicable to Parent or Stockholder. This
Agreement and the Voting Trust Agreement have been duly executed and
delivered by each of Parent and Stockholder and constitute legal, valid
and binding agreements of each of Parent and Stockholder, enforceable
in accordance with their respective terms. Neither the execution or
delivery of this Agreement and the Voting Trust Agreement by each of
Parent or Stockholder, and the Proxy by Stockholder, nor the
consummation by each of Parent or Stockholder of the transactions
contemplated hereby and thereby, will (a) require any consent or
approval of or filing with any
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governmental or other regulatory body other than filings required, if
any, under the federal or state securities and antitrust laws or (b)
result in a violation of, conflict with or default under, any (A) law,
rule, regulation or order applicable to Parent or Stockholder or (B)
any contract, commitment, agreement, understanding, arrangement or
other restriction of any kind to which Parent or Stockholder is a party
or by which Parent or Stockholder is bound.
5.3 Written Consent of Stockholders. Approval of this Agreement, the Voting
Trust Agreement and the Merger Agreement and all of the transactions
contemplated in connection therewith have been approved by the written
consent of the stockholders of each of Parent and Stockholder in
accordance with Delaware law, and no other consents or filings are
required in respect of such stockholder approval, except for the filing
of the Information Statement (as defined herein) described in Section
10.3. Purchaser hereby acknowledges receipt of copies of the written
consents of the stockholders of each of Parent and Stockholder.
5.4 Finder's Fees. No person other than Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation is, or will be, entitled to any commission or
finder's fees from Parent or Stockholder in connection with this
Agreement or the transactions contemplated hereby, exclusive of any
commission or finder's fees referred to in the Merger Agreement.
6. Representations and Warranties of Purchaser.
Purchaser represents and warrants to Stockholder as follows:
6.1 Authority. Purchaser has full legal right, power and authority to enter
into and perform all of its obligations under this Agreement and the
Voting Trust Agreement in accordance with the terms and conditions
hereof. The execution, delivery and performance of this Agreement and
the Voting Trust Agreement by Purchaser will not violate (a) its
charter, by-laws, or other organizational or constitutive documents,
(b) except as set forth in the Merger Agreement, any agreement to which
Purchaser is a party or (c) any law, rule, regulation or order
applicable to Purchaser. This Agreement and the Voting Trust Agreement
have been duly executed and delivered by Purchaser and constitute
legal, valid and binding agreements of Purchaser, enforceable in
accordance with their respective terms. Except as set forth in the
Merger Agreement, neither the execution or delivery by Purchaser of
this Agreement and the Voting Trust Agreement, nor the consummation by
Purchaser of the transactions contemplated hereby and thereby, will (a)
require any consent or approval of or filing with any governmental or
other regulatory body other than filings required under the federal and
state securities and antitrust laws or (b) result in a violation of,
conflict with or result in a default under, (i) any law, rule,
regulation or order applicable to Purchaser or (ii) any contract,
commitment, agreement, understanding, arrangement or other restriction
of any kind to which or it is a party or by which it is bound.
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6.2 Finder's Fees. No person is, or will be, entitled to any commission or
finder's fee from Purchaser in connection with this Agreement or the
transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
7. Termination.
This Agreement shall terminate on the earliest of (a) the Effective
Time (as defined in the Merger Agreement), (b) 5:00 p.m. New York City time on
November 30, 2000, but only if the Effective Time has not occurred by such time,
(c) immediately upon the termination of the Merger Agreement, (d) any decrease
in the Merger Consideration from that referenced in the Merger Agreement as of
the date hereof or any other change (including by way of amendment,
modification, waiver or other acquiescence) relating to the Merger Consideration
(including, without limitation, any changes to the manner of calculating or
paying, including the timing thereof or conditions thereto, the Merger
Consideration), (e) any amendment to the Merger Agreement that adversely affects
the Stockholder and (f) fourteen (14) days after the occurrence of the
stockholders meeting called by the Company to approve the Merger as set forth in
Section 5.5 of the Merger Agreement, but only if the Effective Time has not
occurred by such time; provided, however, the provisions of Sections 8 and 9, 12
through 18 (inclusive), and 20 and 21 shall all survive any termination of this
Agreement.
8. Expenses.
Except as provided in Section 21, each party hereto will pay all of its
expenses in connection with the transactions contemplated by this Agreement,
including, without limitation, the fees and expenses of its counsel and other
advisers.
9. Confidentiality.
Stockholder recognizes that successful consummation of the transactions
contemplated by this Agreement may be dependent upon confidentiality with
respect to these matters. In this connection, Stockholder agrees that it will
not disclose or discuss these matters with anyone (other than with the officers,
directors, legal counsel and advisors of the Stockholder, the Company, Congress
or the Committee, if any) not a party to this Agreement, without prior written
consent of Purchaser, except that Stockholder may make the filings and other
disclosures required by it pursuant to the Exchange Act and the rules and
regulations thereunder. Additionally, other than disclosures which would violate
Section 10.1(c) below, Stockholder may make other disclosures which
Stockholder's legal counsel advises in writing are necessary in order to fulfill
Stockholder's obligations imposed by law, court order or stock exchange
regulations, so long as Stockholder shall have given reasonable prior notice of
such disclosure to Purchaser and, to the extent applicable, shall thereafter
cooperate with Purchaser in seeking a protective or other order respecting the
confidentiality hereof.
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10. Covenants.
10.1 Except in accordance with the provisions of or as otherwise
contemplated by this Agreement, Stockholder and Parent agree, prior to
the termination of this Agreement as provided in Section 5 above, not
to, directly or indirectly:
(a) voluntarily (i) sell, transfer, pledge, encumber, assign
or otherwise dispose of, or (ii) enter into any contract, option
or other arrangement or understanding with respect to the sale,
transfer, pledge, encumbrance, assignment or other disposition
of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any
Shares; or
(c) take any action to encourage, initiate or solicit any
inquiries or the making of any Takeover Proposal (as defined in
the Merger Agreement) or engage in any negotiations concerning,
or provide any confidential information or data to, or have any
discussions with or respond to, any person relating to a Takeover
Proposal or otherwise assist or facilitate any effort or attempt
by any person or entity (other than Purchaser or its officers,
directors, representatives, agents, affiliates or associates) to
make or implement a Takeover Proposal.
10.2 Each of Parent and Stockholder agrees, while this Agreement is in
effect, to notify Purchaser promptly of the number of any shares of
Common Stock acquired by Stockholder after the date hereof and to
deposit all such shares of Common Stock with the Voting Trustee to be
held in accordance with the Voting Trust Agreement.
10.3 Parent shall promptly prepare and in no event later than ten (10)
business days after the date hereof, file with the Securities and
Exchange Commission ("SEC") a preliminary information statement
relating to the approval of this Agreement and use its reasonable best
efforts to obtain and furnish the information required to be included
by the SEC in the information statement. Parent will provide Purchaser
with a reasonable opportunity to review and comment on such materials.
Parent shall respond promptly to any comments made by the SEC with
respect to the preliminary information statement, shall use its
reasonable best efforts to have the SEC clear the information statement
and shall cause a definitive information statement (such definitive
information statement, together with any amendments and supplements
thereto, the "Information Statement") to be mailed to its stockholders,
and the stockholder action referred to therein to become effective, as
soon as possible after the filing with the SEC of the preliminary
information statement. Purchaser shall provide Parent for inclusion in
the Information Statement such information regarding Purchaser which
may be required under applicable law and which is reasonably requested
by Parent, and Purchaser hereby represents and warrants that the
information provided and to be provided by it specifically for use in
the Information Statement (the "Purchaser Information") shall not, on
the date upon which the Information
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Statement is mailed to the stockholders of Parent and on the date upon
which approval of the Sale and this Agreement by stockholders of Parent
is obtained, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and Purchaser agrees to
correct promptly any of the Purchaser Information that shall have
become false or misleading in any material respect.
10.4 If the Company has purchased the Purchase Shares pursuant to the
Xxxxxxx Agreement for less than the Merger Consideration, Purchaser
shall, within ten (10) days after the Effective Time, pay to
Stockholder by wire transfer of immediately available funds to the
account or accounts designated for payment an amount equal to the
product of (a) the difference between the Merger Consideration and the
price per share paid by the Company for the Purchase Shares, multiplied
by (b) the number of Purchase Shares purchased by the Company.
10.5 To the extent that the net proceeds per share received by the
Stockholder from any sale of the Purchase Shares is less than the
Merger Consideration, Purchaser shall, within ten (10) days after the
Effective Time, pay to the Stockholder by wire transfer of immediately
available funds to the account or accounts designated for payment an
amount equal to the product of (a) the difference between the Merger
Consideration and the net proceeds per share received by the
Stockholder for the Purchase Shares, multiplied by (b) the number of
Purchase Shares sold by the Stockholder.
11. Survival of Representations and Warranties.
Except as set forth in Section 7 above, all representations,
warranties, covenants and agreements made by Stockholder, Parent or
Purchaser in this Agreement shall survive notwithstanding any
investigation at any time made by or on behalf of any party.
12. Notices.
All notices or other communications required or permitted hereunder
shall be in writing (except as otherwise provided herein), given in the manner
provided in the Merger Agreement, and shall be deemed duly given when received,
addressed as follows:
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If to Purchaser:
Wilmar Industries, Inc.
000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Stockholder or Parent:
Waxman Industries, Inc.
Waxman USA Inc.
00000 Xxxxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
13. Entire Agreement; Amendment.
This Agreement, together with the documents expressly referred to
herein, constitute the entire agreement among the parties hereto with respect to
the subject matter contained herein and supersede all prior agreements and
understandings among the parties with respect to such subject matter. This
Agreement may not be modified,
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amended, altered or supplemented except by an agreement in writing executed by
the parties hereto.
14. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns and personal
representatives, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties; provided that this Agreement shall
not be binding on any transferee of the Pledged Shares not affiliated with the
Stockholder or Parent, other than Congress.
15. Governing Law.
Except as expressly set forth below, this Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof. In addition, each of the parties hereto hereby
agree that any dispute arising out of this Agreement shall be heard in the
Chancery Court of the State of Delaware or in the United States District Court
for the District of Delaware and, in connection therewith, each party to this
Agreement hereby consents to the jurisdiction of such courts and agrees that any
service of process in connection with any dispute arising out of this Agreement
may be given to any other party hereto by certified mail, return receipt
requested, at the respective addresses set forth in Section 12 above.
16. Injunctive Relief.
The parties agree that in the event of a breach of any provision of
this Agreement, the aggrieved party may be without an adequate remedy at law.
The parties therefore agree that in the event of a breach of any provision of
this Agreement, the aggrieved party shall be entitled to obtain in any court of
competent jurisdiction a decree of specific performance or to enjoin the
continuing breach of such provision, in each case without the requirement that a
bond be posted, as well as to obtain damages for breach of this Agreement. By
seeking or obtaining such relief, the aggrieved party will not be precluded from
seeking or obtaining any other relief to which it may be entitled.
17. Counterparts; Facsimile Signatures.
This Agreement may be executed, including execution by facsimile, in
any number of counterparts, each of which shall be deemed to be an original and
all of which together shall constitute one and the same document.
18. Severability.
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Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable.
19. Further Assurances.
Each party hereto shall execute and deliver such additional documents
as may be necessary or desirable to consummate the transactions contemplated by
this Agreement.
20. Third Party Beneficiaries.
Nothing in this Agreement, expressed or implied, shall be construed to
give any person other than the parties hereto any legal or equitable right,
remedy or claim under or by reason of this Agreement or any provision contained
herein.
21. Legal Expenses.
In the event any legal proceeding is commenced by any party to this
Agreement to enforce, or recover damages for any breach of, the provisions
hereof, the prevailing party in such legal proceeding shall be entitled to
recover in such legal proceeding from the losing party such prevailing party's
costs and expenses incurred in connection with such legal proceedings, including
reasonable attorneys fees and disbursements.
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IN WITNESS WHEREOF, Parent, Stockholder and Purchaser have caused this
Agreement to be executed by their duly authorized officers, each as of the date
and year first above written.
Waxman USA Inc.
By: /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: President and Co-CEO
Waxman Industries, Inc.
By: /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: President and Co-CEO
Wilmar Industries, Inc.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
BW Acquisition, Inc.
By: /s/ Xxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxx
Title: S.V.P.
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Exhibit A
Proxy
Waxman USA Inc. ("Stockholder"), a shareholder of Xxxxxxx
Inc., a Delaware corporation (the "Company"), hereby irrevocably (to the fullest
extent permitted by law) appoints and constitutes Wilmar Industries, Inc.
("Wilmar") and BW Acquisition, Inc. ("BW Acquisition" and, together with Wilmar,
"Purchaser"), the attorney and proxy of Stockholder with full power of
substitution and resubstitution, to the full extent of Stockholder's rights with
respect to (i) 1,000,000 of the issued and outstanding shares of capital stock
of the Company owned of record by Stockholder as of the date of this proxy and
pledged to Congress Financial Corporation ("Congress") as collateral security
for certain of Stockholder's obligations to Congress (the "Pledged Shares").
Upon the execution hereof, all prior proxies given by Stockholder with respect
to any of the Pledged Shares are hereby revoked until the Termination Date (as
defined below), and no subsequent proxies will be given with respect to any of
the Pledged Shares until the Termination Date.
This proxy is coupled with an interest and is granted in
connection with a Stockholder Agreement, dated as of the date hereof, between
Purchaser and Stockholder (the "Stockholder Agreement"), and is granted in
consideration of and to induce Purchaser to enter into the Agreement and Plan of
Merger, dated as of the date hereof, between the Purchaser and the Company (the
"Merger Agreement"). Capitalized terms used but not otherwise defined in this
proxy have the meanings ascribed to such terms in the Merger Agreement as in
effect on the date hereof.
Until the Termination Date, the attorney and proxy named above
will be empowered, and may exercise this proxy, solely to vote, or cause the
holder of record on any applicable record date with respect to any Pledged
Shares to vote, the Pledged Shares at any time, until the termination of the
Stockholder Agreement (upon which this Proxy shall automatically terminate), at
any meeting of the stockholders of the Company, however called, or in any
written action by consent of stockholders of the Company: (a) in favor of the
Merger; (b) against any action or agreement that would result in a breach of any
covenant, any representation or warranty or any other obligation or agreement of
the Company under or pursuant to the Merger Agreement; or (c) against any action
or agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Merger, including, but not limited to, (i) any corporate
transaction not entered into in the ordinary course of business (other than the
Merger) such as a merger, other business combination, reorganization,
consolidation, recapitalization, dissolution or liquidation involving Company,
(ii) a sale or transfer of a material amount of assets of Company or any of its
subsidiaries, (iii) any change in the management or board of directors of
Company, other than a change necessary to fill a vacancy, (iv) any change in the
present capitalization of the Company, or (v) any other change in the corporate
structure (including the charter, by-laws or other organizational or
constitutive documents) or business of the Company.
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This proxy shall be binding upon the heirs, successors and
assigns of Stockholder (including any transferee of any of the Pledged Shares in
accordance with the Stockholder Agreement) except that this proxy shall not be
binding, and shall immediately terminate, upon the earlier of (a) November 30,
2000, (b) the termination of the Merger Agreement and (c) the transfer of the
Pledged Shares to any transferee not affiliated with the Stockholder or Parent,
including Congress or its designee.
Any term or provision of this proxy which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this proxy or affecting
the validity or enforceability of any of the terms or provisions of this proxy
in any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
Dated: July 10, 2000
Waxman USA Inc.
By: /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: President and Co-CEO
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