IRREVOCABLE PROXY
THIS AGREEMENT, dated as of January 31, 1996, between Golden
Press Holding, L.L.C., a Delaware limited liability company (the "Buyer"), and
the Trust, fbo Xxxxxxx X. Xxxxxxxxx u/a April 5, 1986, Fleet National Bank of
Connecticut, as trustee (the "Shareholder), a shareholder of Western Publishing
Group, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, contemporaneously with the execution of this
Agreement, the Company and the Buyer are entering into a Securities Purchase
Agreement (the "Securities Purchase Agreement") pursuant to which the Buyer will
purchase (the "Securities Purchase") 13,000 shares of the Company's Series B
Convertible Preferred Stock, no par value ("Series B Preferred Stock"), and a
warrant (the "Warrant") to purchase 3,250,000 shares (subject to adjustment) of
the Company's common stock, par value $.01 per share ("Company Common Stock");
WHEREAS, contemporaneously with the execution of this
Agreement, Buyer is entering into an agreement substantially similar to this
Agreement with each of (i) Xxxxxxx X. Xxxxxxxxx and (ii) the Trust fbo Xxxxxxx
X. Xxxxxxxxx u/a March 16, 1978, Xxxxxxx X. Xxxxxxxxx and Xxxxxx Xxxxxx, as
trustees (collectively, the "Other Shareholders"), which own 3,501,000 and
400,000 shares of Company Common Stock, respectively; and
WHEREAS, the Buyer, as a condition to its willingness to enter
into the Securities Purchase Agreement, has required the Shareholder to grant
the Buyer an irrevocable proxy with respect to all of the shares of Company
Common Stock owned by the Shareholder, together with any additional shares of
Company Common Stock hereafter acquired by the Shareholder (such specified
number of shares, and any additional shares when and if they are acquired by
Shareholder, being referred to as the "Shares") on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. Irrevocable Proxy. By entering into this Agreement, the
Shareholder hereby grants a proxy (the "Proxy")
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appointing the Buyer (or any designee of the Buyer) as the Shareholder's lawful
agent, attorney-in-fact and proxy, with full power of substitution, for and in
the Shareholder's name, to vote, express consent or dissent, or otherwise to
utilize such voting power in such manner and upon such matters as the Buyer or
its proxy or substitute shall, in the Buyer's sole discretion, deem proper with
respect to the Shares, including without limitation, to vote any or all the
Shares at any meeting, or in connection with any written consent, of the
Company's shareholders (i) in favor of the Securities Purchase (or any similar
transaction involving the Company and the Buyer (or an Affiliate thereof)), (ii)
in favor of the Securities Purchase Agreement or other agreement evidencing any
such transaction and in favor of any other related transactions or matters
presented in connection with any such transaction, including the Company Voting
Matters (as defined in the Securities Purchase Agreement), and (iii) against any
other proposal which provides for any merger, sale of assets or other Third
Party Business Combination (as defined in the Securities Purchase Agreement)
between the Company (or any subsidiary of the Company) and any other person or
entity or which would make it impractical for the Buyer to effect the Securities
Purchase or other similar transaction involving the Company and the Buyer (or an
Affiliate thereof); provided, however, that, until the consummation of the
Securities Purchase, the Proxy shall not allow Buyer to vote against, or for the
removal of, existing members of the Company's Board of Directors, except that
the Proxy will be voted for the Company Voting Matters as contemplated by
Section 5.3 of the Securities Purchase Agreement. The Proxy is irrevocable, is
coupled with an interest, and is granted in consideration of the Buyer's
entering into this Agreement and the Securities Purchase Agreement; provided,
however, that the Proxy shall be revoked upon the earlier to occur of (x) the
termination of the Securities Purchase Agreement in accordance with its terms
prior to the consummation of the Securities Purchase and (y) the failure of the
aggregate "beneficial ownership" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of Buyer, each member thereof, any Affiliates
of such members (other than of Warburg, Xxxxxx Ventures, L.P. ("WPV")) and the
general partnership that acts as a general partner of WPV, at any time following
the consummation of the Securities Purchase, to constitute 15% or more of the
outstanding Company Common Stock (after taking into account the conversion or
exercise of all outstanding securities of the Company that are convertible into
or exercisable for shares of Company Common Stock, provided, however, that the
shares of Company Common Stock issuable upon exercise of the Warrant shall be
taken into account only in the amount of the excess, if any, of the number of
such
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shares over the number of shares of Company Common Stock issued to such
parties as dividends on the Series B Preferred Stock). If the proxy granted in
this Section 1 shall be determined to be invalid for any reason, the Shareholder
hereby agrees to vote the Shares, in any circumstances set forth in this Section
1, in accordance with the written instructions of Buyer. Notwithstanding any
implication to the contrary in this Agreement, the proxy granted in this Section
1 shall be revoked, and the agreement set forth in the immediately preceding
sentence shall be terminated, with respect to any Shares upon the sale or
transfer of such Shares to a third party (other than an Affiliate of the
Shareholder), provided that such sale or transfer is otherwise permitted under
the terms of this Agreement. For purposes of this Agreement, "Affiliate" is used
as defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act"), and includes, without limitation, immediate family members
and trusts, 25% or more of the beneficial interests of which are owned by such
person or one or more members of his immediate family members.
2. Legending of Certificates; Nominee Shares. The Shareholder
agrees to submit to the Buyer contemporaneously with or promptly following
execution of this Agreement (or promptly following receipt of any additional
certificates representing any additional Shares) all certificates representing
the Shares so that the Buyer may note thereon a legend referring to the transfer
restrictions in this Agreement. If any of the Shares beneficially owned by the
Shareholder are held of record by a brokerage firm in "street name" or in the
name of any other nominee (a "Nominee," and, as to the Shares, "Nominee
Shares"), the Shareholder agrees that, upon written notice by the Buyer
requesting it, the Shareholder will within five days of the giving of such
notice execute and deliver to the Buyer a limited power of attorney in such form
as shall be reasonably satisfactory to the Buyer enabling the Buyer to require
the Nominee to grant to the Buyer an irrevocable proxy to the same effect as
Section 1 hereof with respect to the Nominee Shares held by such Nominee and to
submit to the Buyer the certificates representing such Nominee Shares for
notation of the foregoing legend thereon.
3. [Intentionally omitted.]
4. Representations and Warranties of the Shareholder.
The Shareholder represents and warrants to the Buyer that:
(a) On the date hereof, the Shareholder is the owner
of record of 95,771 shares of Company Common Stock. All of
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the Shares are validly issued, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof; and the Shareholder has good and
valid title to the Shares, free and clear of any agreements, liens, adverse
claims or encumbrances whatsoever with respect to the ownership of or the right
to vote the Shares. The Shareholder has not granted any proxies with respect to
the Shares except as contemplated by this Agreement.
(b) The Shareholder has the full right, power and
authority to enter into this Agreement, and this Agreement has been duly and
validly executed and delivered on behalf of the Shareholder.
(c) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not, with or without the giving of notice or the passage of time, (i)
violate any judgment, injunction or order of any court, arbitrator or
governmental agency applicable to the Shareholder, or (ii) conflict with, result
in the breach of any provision of, constitute a default under, or give rise to a
right of termination, cancellation or acceleration of any right or obligation of
the Shareholder under, or require the consent of any third party under, any
agreement, instrument, judgment, order or decree to which the Shareholder is a
party or by which the Shareholder may be bound.
(d) This Agreement is the valid and binding
Agreement of the Shareholder, enforceable against the Shareholder in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
(e) The Shares are the only shares of Company
Common Stock owned of record by the Shareholder, and the Shareholder does not
own any options to purchase or rights to subscribe for or otherwise acquire any
securities of the Company and has no other interest in or voting rights with
respect to any securities of the Company.
(f) No investment banker, broker or finder is
entitled to a commission or fee from the Shareholder or the Company in respect
of this Agreement based upon any arrangement or agreement made by or on behalf
of the Shareholder.
5. Additional Covenants of the Shareholder. The
Shareholder hereby covenants and agrees that:
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(a) The Shareholder will not enter into any
transaction, take any action, or by inaction permit any event to occur, that
would result in any of the representations or warranties of the Shareholder
herein contained not being true and correct at and as of the time immediately
after the occurrence of such transaction, action or event.
(b) Until the termination of this Agreement, the
Shareholder, whether directly, indirectly, or through any employee, agent or
otherwise shall not: (i) solicit or initiate any inquiry or submission of a
proposal or an offer from any person or entity relating to any acquisition or
purchase of (A) the assets, business or property of the Company or any
subsidiary thereof, or (B) any equity interest in, or any merger, consolidation
or business combination with, the Company or any of its subsidiaries (an
"acquisition proposal"), or (ii) participate in any discussions or negotiations
regarding, or furnish to any other person or entity any information with respect
to, or otherwise cooperate in any way or assist or facilitate any acquisition
proposal by any other person or entity. The Shareholder shall promptly advise
the Buyer of any communication (including the identity of the person or entity
making such communication and the terms thereof) that the Shareholder may
receive relating to any of the foregoing.
(c) Until the termination of this Agreement, the
Shareholder shall not, directly or indirectly, (i) grant any proxies or enter
into any voting trust or other agreement or arrangement with respect to the
voting of any Shares or (ii) acquire, sell, assign, transfer, encumber or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the direct or indirect acquisition or sale,
assignment, transfer, encumbrance or other disposition of, any shares of capital
stock of the Company during the term of this Agreement other than with the Other
Shareholders. The Shareholder shall not seek or solicit any such acquisition or
sale, assignment, transfer, encumbrance or other disposition or any such
contract, option or other arrangement or assignment or understanding and the
Shareholder agrees to notify the Buyer promptly and to provide all details
requested by the Buyer if the Shareholder shall be approached or solicited,
directly or indirectly, by any person or entity with respect to any of the
foregoing. Notwithstanding the foregoing, the Shareholder shall be entitled, (i)
at any time beginning three business days after the financial results of the
Company for the fiscal year ending February 3, 1996 have been Publicly Disclosed
(as defined below) by the Company, but not before consummation of the Securities
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Purchase, to sell all or a portion of the Shares to any purchaser, (x) in the
case of non-negotiated, public, open-market transactions, in amounts not to
exceed the limitations set forth in Rule 144(e) under the Securities Act
(provided that the Shareholder and its Affiliates shall be considered one person
for purposes of such limitations) and (y) in all other cases, other than to an
Entrepreneurial Investor (as defined below) and (ii) to pledge Shares in order
to secure a loan from a bona fide lending institution, provided that (x) prior
to such pledge such institution agrees in writing to enter into an agreement
with the Buyer substantially identical to this Agreement and reasonably
satisfactory in all respects to the Buyer, such agreement to take effect
immediately prior to such institution's foreclosing or receiving any rights
(other than a security interest therein) in respect of such Shares, and (y)
prior to such foreclosure, the rights of such institution in respect of such
Shares shall be limited to a security interest therein and be subject to this
Agreement and (iii) to distribute Shares to its beneficiaries as required under
its terms of trust, provided that prior to such distribution, such beneficiary
shall enter into an agreement with the Buyer substantially identical to this
Agreement and reasonably satisfactory in all respects to the Buyer. The
Shareholder shall provide the Buyer with prior written notice of any proposed
transfer of Shares pursuant to this Section 5(c) and evidence of compliance
therewith. For purposes of this Agreement, "Publicly Disclosed" means the
Company's publicly announcing (which may include disclosure in the Proxy
Statement mailed to the holders of Company Common Stock in connection with the
Securities Purchase) the consolidated financial results of the Company and its
consolidated subsidiaries for the fiscal year ending February 3, 1996 in the
same detail as the Company's public announcement of such results for the fiscal
year ended January 28, 1995 (containing at least the consolidated revenues,
operating income and net income of the Company and its consolidated
subsidiaries), and an "Entrepreneurial Investor" means any investor that (or any
investor, any of whose Affiliates) (x) is listed on Schedule I hereto or (y) is
unacceptable to Xxxx Xxxxxxxxxx, in his sole discretion, provided that no
individual or entity listed on Schedule II hereto shall be deemed an
Entrepreneurial Investor.
(d) The Shareholder shall execute and deliver
any additional documents reasonably necessary or desirable, in the reasonable
opinions of both the Buyer's counsel and the Shareholder's counsel, to evidence
the Proxy granted in Section 1 with respect to the Shares or otherwise implement
and effect the provisions of this Agreement.
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6. Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Shareholder that:
(a) The Buyer has all requisite power and
authority to enter into and perform all of its obligations under this Agreement.
The execution, delivery and performance of this Agreement and all of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Buyer. This Agreement has been duly executed and
delivered by the Buyer.
(b) Neither the execution, delivery or
performance of this Agreement by the Buyer nor the consummation of the
transactions contemplated herein will violate the organizational documents of
the Buyer or will conflict with or result in the breach of any material term,
condition or provision of any instrument, indenture, contract, lease or other
document or understanding, oral or written, to which the Buyer is a party or is
otherwise bound or affected in such a manner as to materially and adversely
affect the business of the Buyer.
7. Termination. This Agreement may be terminated by any
party hereto on or after the day of termination of the Securities Purchase
Agreement in accordance with its terms, prior to the consummation of the
Securities Purchase, and thereafter (i) by mutual written consent of both
parties hereto, provided that Section 10 hereof shall survive termination of
this Agreement or (ii) at such time as the Shareholder and the Other
Shareholders shall have disposed of direct and indirect "beneficial ownership"
of all shares of Company Common Stock (excluding the 60,000 share of Company
Common Stock owned by the Xxxxxxx X. and Xxxxxx Xxxxxxxxx Foundation, Inc.) in
bona fide transactions that do not violate this Agreement.
8. Binding Effect; Assignment. This Agreement shall
inure to the benefit of and be binding upon the parties and their respective
successors and permitted assigns. Except as contemplated by Section 5(d), the
Shareholder shall not assign its rights or obligations hereunder without the
Buyer's consent. The Buyer may assign its rights and obligations hereunder to an
Affiliate.
9. Notices. All notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or by Federal Express or other courier service or sent by express mail, postage
prepaid, return receipt
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requested, addressed to the respective party at the applicable address below, on
the date of such personal delivery or on the date received:
If to the Buyer: Golden Press Holding, L.L.C.
c/o Warburg, Xxxxxx Ventures, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to the Shareholder: Fleet National Bank of Connecticut
X.X. Xxx 0000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Ms. Xxxxxxxxx Xxxxx
Telecopy No.:_____________________
Any party may change the foregoing address from time to time by giving the other
party notice thereof.
10. Injunctive Relief; Remedies Cumulative.
(a) Each party hereto acknowledges that the
other party will be irreparably harmed and that there will be no adequate remedy
at law for a violation of any of the covenants or agreements of such party that
are contained in this Agreement. It is accordingly agreed that, in addition to
any other remedies that may be available to the non-breaching party upon the
breach by any other party of such covenants and agreements, the non-breaching
party shall have the right to obtain injunctive relief to restrain any breach or
threatened breach of such covenants or agreements or otherwise to obtain
specific performance of any of such covenants or agreements.
(b) No remedy conferred upon or reserved to any
party herein is intended to be exclusive of any other remedy, and
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every remedy shall be cumulative and in addition to every other remedy herein or
now or hereafter existing at law, in equity or by statute.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the principles of conflicts of laws thereof; provided, however, that the laws
of the State of Delaware shall govern as to internal corporate matters.
12. Counterparts. This Agreement may be executed in
any number of counterparts, all of which together shall constitute a single
agreement.
13. Effect of Partial Invalidity. Whenever possible, each
provision of this Agreement shall be construed in such a manner as to be
effective and valid under applicable law. If any provision of this Agreement or
the application thereof to any party or circumstance shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition without invalidating the remainder of such provision or any
other provisions of this Agreement or the application of such provision to the
other party or other circumstances.
14. Entire Agreement. This Agreement constitutes the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersedes any prior agreements, written or oral, with respect thereto.
15. Jurisdiction and Process. Each party hereto irrevocably
submits to the non-exclusive jurisdiction of the United States District Court
for the Southern District of New York and of any New York state court sitting in
New York City for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. Each party
hereto irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Each party
hereto agrees that a final judgment in any such proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Each party hereto consents to process being served
in any such proceeding by mailing a copy thereof by registered or certified
mail, postage prepaid, return receipt requested to such party at its address
specified in Section 9 or at such other address of
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which such party shall then have been notified pursuant to said Section. Each
party hereto agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such proceeding and (ii)
shall, to the fullest extent permitted by applicable law, be taken and held be
valid personal service upon and personal delivery to such party. Such service
shall be conclusively presumed received as evidenced by a delivery receipt
furnished by the United States Postal Service or any reputable commercial
delivery service.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the date first above written.
GOLDEN PRESS HOLDING, L.L.C.
By: WARBURG, XXXXXX VENTURES, L.P.
Member
By:___________________________
Name:
Title: General Partner
FLEET NATIONAL BANK OF CONNECTICUT
trustee u/a April 5, 1985
fbo Xxxxxxx X. Xxxxxxxxx
By:________________________________
Name:
Title:
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Index of Defined Terms
beneficial ownership ....................................................... 2
Buyer ...................................................................... 1
Company .................................................................... 1
Company Common Stock ....................................................... 1
Nominee .................................................................... 3
Nominee Shares ............................................................. 3
Other Shareholders ......................................................... 1
Proxy ...................................................................... 1
Publicly Disclosed ......................................................... 6
Securities Purchase ........................................................ 1
Securities Purchase Agreement .............................................. 1
Series B Preferred Stock ................................................... 1
Shareholder ................................................................ 1
Shares ..................................................................... 1
Warrant .................................................................... 1