Exhibit C
PROXY AND INDEMNIFICATION AGREEMENT
PROXY AND INDEMNIFICATION AGREEMENT (this "Agreement"), dated as of May 16,
1998, among XXXXXXX'X, INC., a Delaware corporation ("Parent"), and each of the
stockholders of MINOT MERCANTILE CORPORATION, a Delaware corporation (the
"Company"), that are signatories hereto (each, a "MMC Stockholder").
W I T N E S S E T H :
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WHEREAS, concurrently with the execution and delivery of this Agreement,
Parent, MMC Acquisition, Inc., a Delaware corporation and a wholly owned
subsidiary of Parent ("Purchaser"), and the Company have entered into a merger
agreement, dated as of the date hereof (the "Merger Agreement"; capitalized
terms used but not defined herein shall have the meanings set forth in the
Merger Agreement), pursuant to which MMC MergerSub will be merged with and into
the Company (the "Merger"), and the Company shall be the surviving corporation;
and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement and consummate the Merger, Parent and Purchaser have required that
each MMC Stockholder agree, and each MMC Stockholder has agreed, among other
things, (i) to grant to Parent the irrevocable proxy with respect to all of the
Company's common stock, par value $5.00 per share ("Company Common Stock"),
owned by such MMC Stockholder, together with any additional shares when and if
they are acquired (such shares, and any additional shares when and if they are
acquired, being referred to herein as such MMC Stockholder's "Shares" and
collectively as the "Shares") on the terms and conditions provided for herein,
and (ii) to indemnify and hold harmless Parent and Purchaser, in the manner
provided herein, on account of any Losses (as defined herein) arising out of or
relating to the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent and each MMC Stockholder hereby agree as follows:
1. Irrevocable Proxy. Each MMC Stockholder hereby irrevocably appoints
Parent or any designee of Parent the lawful agent, attorney and proxy of such
stockholder, during the term of this Agreement, to (a) vote such MMC
Stockholder's Shares in favor of the Merger and, if applicable, in favor of
Parent's exercise of its option under the Company's Stockholder's Agreement; (b)
vote such MMC Stockholder's Shares against any action or agreement that would
result in a breach in any material respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement; and (c) vote such MMC Stockholder's Shares against any action or
agreement (other than the Merger Agreement or the transactions contemplated
thereby) that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer, including, but not limited to: (i) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company; (ii) a sale or transfer of a
material amount of assets of the Company or a reorganization, recapitalization
or liquidation of the Company; (iii) any change in the management or board of
directors of the Company, except as otherwise agreed to in writing by Purchaser;
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(iv) any material change in the present capitalization or dividend policy of the
Company; or (v) any other material change in the Company's corporate structure
or business. Each MMC Stockholder intends this proxy to be irrevocable and
coupled with an interest and will take such further action or execute such other
instruments as may be necessary to effectuate the intent of this proxy and
hereby revokes any proxy previously granted by it with respect to the Shares.
Each MMC Stockholder shall not hereafter, unless and until this Agreement
terminates pursuant to Section 7.6 hereof, purport to vote (or execute a consent
with respect to) his Shares (other than through this irrevocable proxy) or grant
any other proxy or power of attorney with respect to such Shares, deposit any
such Shares into a voting trust or enter into any agreement (other than this
Agreement), arrangement or understanding with any person, directly or
indirectly, to vote, grant any proxy or give instructions with respect to the
voting of such Shares.
2. Representations and Warranties.
2.1 Representations and Warranties of Parent. Parent hereby represents and
warrants to the MMC Stockholders as follows:
(a) Due Authorization. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Parent, and no other corporate
proceedings on the part of Parent are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Parent and constitutes a valid and binding
agreement of Parent, enforceable against Parent in accordance with its terms,
except that such enforceability (i) may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally and (ii) is subject to general principles of equity.
(b) No Conflicts. Except for (i) filings under the HSR Act, if applicable,
(ii) the applicable requirements of the Exchange Act and the Securities Act of
1933, as amended (the "Securities Act"), (iii) the applicable requirements of
state securities, takeover or Blue Sky laws and (iv) such notifications,
filings, authorizing actions, orders and approvals as may be required under
other laws, (A) no filing with, and no permit, authorization, consent or
approval of, any state, federal or foreign public body or authority is necessary
for the execution of this Agreement by Parent and the consummation by Parent of
the transactions contemplated hereby and (B) neither the execution and delivery
of this Agreement by Parent nor the consummation by Parent of the transactions
contemplated hereby nor compliance by Parent with any of the provisions hereof
shall (1) conflict with or result in any breach of any provision of the
certificate of incorporation or by-laws (or similar documents) of Parent, (2)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which Parent
is a party or by which it or any of its properties or assets may be bound or
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(3) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent or any of its properties or assets, except in the case of
(2) or (3) for violations, breaches or defaults which would not in the aggregate
materially impair the ability of Parent to perform its obligations hereunder.
(c) Good Standing. Parent is a corporation duly organized, validly existing
and in good standing under the laws of Delaware and has all requisite corporate
power and authority to execute and deliver this Agreement.
2.2 Representations and Warranties of each MMC Stockholder. Each MMC
Stockholder hereby represents and warrants to Parent as follows:
(a) Ownership of Shares. Such MMC Stockholder is the owner of his Shares
and has the power to vote and dispose of such Shares. To such MMC Stockholder's
knowledge, his Shares are validly issued, fully paid and nonassessable, with no
personal liability attaching to the ownership thereof. Such MMC Stockholder has
good title to his Shares, free and clear of any agreements, liens, adverse
claims or encumbrances whatsoever with respect to the ownership of or the right
to vote such Shares.
(b) Power; Binding Agreement. Such MMC Stockholder has the legal capacity,
power and authority to enter into and perform all of its obligations under this
Agreement. The execution, delivery and performance of this Agreement by such MMC
Stockholder will not violate any other agreement to which such MMC Stockholder
is a party including, without limitation, any voting agreement, stockholders
agreement or voting trust. This Agreement has been duly and validly authorized,
executed and delivered by such MMC Stockholder and constitutes a valid and
binding agreement of such MMC Stockholder, enforceable against such MMC
Stockholder in accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally and (ii) is
subject to general principles of equity.
(c) No Conflicts. Except for (i) filings under the HSR Act, if applicable,
(ii) the applicable requirements of the Exchange Act and the Securities Act,
(iii) the applicable requirements of state securities, takeover or Blue Sky
laws, (iv) such notifications, filings, authorizing actions, orders and
approvals as may be required under other laws, (A) no filing with, and no
permit, authorization, consent or approval of, any state, federal or foreign
public body or authority is necessary for the execution of this Agreement by
such MMC Stockholder and the consummation by such MMC Stockholder of the
transactions contemplated hereby and (B) neither the execution and delivery of
this Agreement by such MMC Stockholder nor the consummation by such MMC
Stockholder of the transactions contemplated hereby nor compliance by such MMC
Stockholder with any of the provisions hereof shall (1) conflict with or result
in any breach of any provision of the certificate of incorporation, by-laws,
trust or charitable instruments (or similar documents) of such MMC Stockholder,
(2) result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
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the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which such MMC
Stockholder is a party or by which such MMC Stockholder or any of his properties
or assets may be bound or (3) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to such MMC Stockholder or any of his
properties or assets, except in the case of (2) or (3) for violations, breaches
or defaults which would not in the aggregate materially impair the ability of
such MMC Stockholder to perform his obligations hereunder.
3. Certain Covenants of each MMC Stockholder. Each MMC Stockholder hereby
covenants and agrees as follows:
3.1 No Solicitation. Such MMC Stockholder shall not, directly or
indirectly, solicit, encourage, participate in or initiate any inquiries or the
making of any proposal by any person or entity (other than Parent or any
affiliate of Parent) which constitutes, or may reasonably be expected to lead
to, (a) any sale of the Shares or (b) any acquisition or purchase of a material
portion of the Company's assets or any equity interest in, or any merger,
consolidation or business combination with, the Company. If any MMC Stockholder
receives an inquiry or proposal with respect to the sale of Shares, then such
MMC Stockholder shall promptly inform Parent of the terms and conditions, if
any, of such inquiry or proposal and the identity of the person making it. Each
MMC Stockholder will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing.
3.2 Restriction on Transfer, Proxies and Non-Interference. Each MMC
Stockholder hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to (a) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or 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 his Shares or (b) grant any proxies,
deposit any of his Shares into a voting trust or enter into a voting agreement
with respect to any of his Shares or (c) take any action that would make any
representation or warranty of such MMC Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling such MMC Stockholder
from performing his obligations under this Agreement.
4. Further Assurances. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate the transactions contemplated by this Agreement.
5. Adjustments to Prevent Dilution, Etc. In the event of a stock dividend
or distribution, or any change in the Company Common Stock by reason of any
stock dividend, split-up, recapitalization, combination or the exchange of
shares, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged.
6. Indemnification.
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6.1 General Indemnification. Each MMC Stockholder (collectively, the
"Indemnifying Party"), jointly and severally, indemnifies, defends and holds
Parent, Purchaser and Surviving Corporation and their respective directors,
officers, employees and affiliates (collectively, the "Indemnified Party")
harmless from any and all liabilities, damages, expenses, losses or other claims
(including, without limitation, reasonable attorneys' fees and expenses)
("Losses"), directly or indirectly, suffered or paid that arise out of or relate
to (i) the failure of any representation or warranty made by (A) the Company
under the Merger Agreement or (B) any MMC Stockholder hereunder, in each case to
be true and correct in all respects as of the date of this Agreement and as of
the Closing Date, (ii) any breach by (A) the Company of any of its covenants or
agreements contained in the Merger Agreement and (B) any MMC Stockholder of any
of its covenants or agreements contained herein, and (iii) the Company's
business, operations or conduct at any time on or prior to the Closing Date,
including, without limitation, any and all Taxes imposed on the Company in
respect of periods on or prior to the Closing Date; provided that, the aggregate
amount of the Holdback Amount (as defined in Section 1.6 of the Merger
Agreement) shall be applied to the payment of any Losses prior to any recourse
to any Indemnifying Party's indemnity hereunder.
6.2 Indemnification Procedures. If any indemnifiable claim is asserted by
any third party against or sought to be collected from any Indemnified Party,
such Indemnified Party shall promptly notify the Indemnifying Party of such
claim and the amount or the estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final amount of such claim);
provided, however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Party
shall have been actually prejudiced as a result of such failure. The
Indemnifying Party shall have 20 days after receipt of such notice to assume the
conduct and control, through counsel reasonably acceptable to the Indemnified
Party and at the expense of the Indemnifying Party, of the settlement or defense
thereof; provided that the Indemnifying Party shall permit the Indemnified Party
to participate in such settlement or defense through counsel chosen by the
Indemnified Party so long as the fees and expenses of such counsel are borne by
the Indemnified Party. So long as the Indemnifying Party is reasonably
contesting any such claim in good faith, the Indemnified Party shall not pay or
settle any such claim; provided that the Indemnified Party may pay or settle any
such claim if the Indemnified Party waives its right to indemnification
hereunder in respect of such claim. If the Indemnifying Party does not notify
the Indemnified Party within 20 days after the receipt of the Indemnified
Party's notice of a claim of indemnity hereunder that it elects to undertake the
defense thereof, the Indemnified Party shall have the right to contest, pay or
settle the claim but shall not thereby waive any right to indemnity therefor
pursuant to this Agreement. The Indemnifying Party shall not, except with the
consent of the Indemnified Party, enter into any settlement that does not
include as an unconditional term thereof the unconditional release of the
Indemnified Party from all liability with respect to the related claim. The
obligations to indemnify and hold harmless pursuant to this Section 6 shall
survive the consummation of the transactions contemplated hereby.
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7. Miscellaneous.
7.1 Entire Agreement; Assignment. This Agreement, together with the Merger
Agreement, (i) constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (ii) shall not be assigned by operation of law or
otherwise, provided that Parent may assign its rights and obligations hereunder
to any direct or indirect wholly owned parent company or subsidiary of Parent,
but no such assignment shall relieve Parent of its obligations hereunder if such
assignee does not perform such obligations.
7.2 Amendments. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
7.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at (i) in the case of any MMC Stockholder, c/o Ivins Xxxxxxxx
& Xxxxxx, 0000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, X.X. 00000, and (ii) in the case
of Parent, the following address:
if to Parent:
Xxxxxxx'x, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
7.4 Governing Law. 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.
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7.5 Cooperation as to Regulatory Matters. If so requested by Parent,
promptly after the date hereof, each MMC Stockholder will use its reasonable
best efforts to cause it and the Company (if required) to make all filings which
are required under the HSR Act and applicable requirements and to seek all
regulatory approvals required in connection with the transactions contemplated
hereby. The parties shall furnish to each other such necessary information and
reasonable assistance as may be requested in connection with the preparation of
filings and submissions to any governmental agency, including, without
limitation, filings under the provisions of the HSR Act. Each MMC Stockholder
shall also use its reasonable best efforts to cause the Company to supply Parent
with copies of all correspondence, filings or communications (or memoranda
setting forth the substance thereof) between the Company and its representatives
and the Federal Trade Commission, the Department of Justice and any other
governmental agency or authority and members of their respective staffs with
respect to this Agreement and the transactions contemplated hereby.
7.6 Termination. Except for the provisions of Section 6 which shall remain
in effect indefinitely, this Agreement shall terminate on the earlier of (i) the
Effective Time or (ii) the termination of the Merger Agreement in accordance
with its terms.
7.7 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore, each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
7.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same Agreement.
7.9 Descriptive Headings. The descriptive headings used herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
7.10 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
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IN WITNESS WHEREOF, Parent and each MMC Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
XXXXXXX'X, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
MMC STOCKHOLDERS (listed on next page)
Woodbank Xxxxx, Inc.
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: Chairman
as the holder of 139,000 shares
of the common stock,
par value $5.00 per share,
of Minot Mercantile Corporation
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxx, Xx.
/s/ Minot X. Xxxxxxxx
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Minot X. Xxxxxxxx
as a majority of the trustees of trusts holding 32,646 shares of the common
stock, par value $5.00 per share, of Minot Mercantile Corporation
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxx, Xx.
as a majority of the trustees of trusts holding 43,680 shares of the common
stock, par value $5.00 per share, of Minot Mercantile Corporation
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
/s/ Minot X. Xxxxxxxx
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Minot X. Xxxxxxxx
as a majority of the trustees of trusts holding 5,660 shares of the common
stock, par value $5.00 per share, of Minot Mercantile Corporation
