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 WOODBANK XXXXX, INC., a Delaware corporation
(the "Company"), that are signatories hereto (each, a "WMI Stockholder").
W I T N E S S E T H :
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent, WMI 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 WMI 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 WMI Stockholder agree, and each WMI 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 $1.00 per share ("Company Common
Stock"), owned by such WMI 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 WMI 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 WMI Stockholder hereby agree as follows:
1. Irrevocable Proxy. Each WMI 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 WMI
Stockholder's Shares in favor of the Merger; (b) vote such WMI 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 WMI 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; (iv) any material change in the
present capitalization or dividend policy of the
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Company; or (v) any other material change in the Company's corporate structure
or business. Each WMI 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 WMI 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 WMI 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 (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,
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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 WMI Stockholder.
Each WMI Stockholder hereby represents and warrants to Parent as follows:
(a) Ownership of Shares. Such WMI Stockholder is the owner of
his Shares and has the power to vote and dispose of such Shares. To
such WMI Stockholder's knowledge, his Shares are validly issued, fully
paid and nonassessable, with no personal liability attaching to the
ownership thereof. Such WMI 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 WMI 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 WMI Stockholder will not violate
any other agreement to which such WMI 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 WMI Stockholder and constitutes a valid
and binding agreement of such WMI Stockholder, enforceable against such
WMI 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 WMI
Stockholder and the consummation by such WMI Stockholder of the
transactions contemplated hereby and (B) neither the execution and
delivery of this Agreement by such WMI Stockholder nor the consummation
by such WMI Stockholder of the transactions contemplated hereby nor
compliance by such WMI 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 WMI 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 the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or
obligation to which such WMI Stockholder is
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a party or by which such WMI 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 WMI 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 WMI Stockholder to perform his
obligations hereunder.
3. Certain Covenants of each WMI Stockholder. Each WMI
Stockholder hereby covenants and agrees as follows:
3.1 No Solicitation. Such WMI 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 WMI Stockholder
receives an inquiry or proposal with respect to the sale of Shares, then such
WMI 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
WMI 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 WMI 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 WMI Stockholder contained
herein untrue or incorrect or have the effect of preventing or disabling such
WMI 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.
6.1 General Indemnification. Each WMI Stockholder
(collectively, the "Indemnifying Party"), jointly and severally, indemnifies,
defends and holds Parent, Purchaser
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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 WMI 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 WMI 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.
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
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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 WMI 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.
7.5 Cooperation as to Regulatory Matters. If so requested by
Parent, promptly after the date hereof, each WMI 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 WMI
Stockholder shall also use its reasonable best efforts
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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 WMI 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
WMI STOCKHOLDERS (listed on next page)
/s/ Xxxxx Xxxxxxxx
----------------------------------
Xxxxx Xxxxxxxx
Wilmington Trust Company
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
as the trustees of trusts
holding 6,440 shares of
the common stock,
par value $1.00 per share,
of Woodbank Xxxxx, Inc.
/s/ Xxxxx Xxxxxxxx
----------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
----------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
as a majority of the trustees of trusts
holding 26,300 shares of the common stock,
par value $1.00 per share,
of Woodbank Xxxxx, Inc.
/s/ Xxxxx Xxxxxxxx
----------------------------------
Xxxxx Xxxxxxxx
/s/ Minot X. Xxxxxxxx
----------------------------------
Minot X. Xxxxxxxx
as a majority of the trustees of trusts
holding 47,400 shares of the common stock,
par value $1.00 per share,
of Woodbank Xxxxx, Inc.
/s/ Justine VR. Xxxxxxxx
----------------------------------
Justine VR. Xxxxxxxx
/s/ Minot X. Xxxxxxxx
----------------------------------
Minot X. Xxxxxxxx
as a majority of the trustees of trusts
holding 51,000 shares of the common stock,
par value $1.00 per share,
of Woodbank Xxxxx, Inc.
/s/ Xxxxx Xxxxxxxx
----------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
/s/ Minot X. Xxxxxxxx
----------------------------------
Minot X. Xxxxxxxx
as a majority of the trustees of trusts
holding 16,300 shares of the common stock,
par value $1.00 per share,
of Woodbank Xxxxx, Inc.
