Exhibit 1
VOTING AGREEMENT
THIS VOTING AGREEMENT ("AGREEMENT") is made and entered into as of
September 12, 2000, by and among Xxxxxx Manufacturing, Inc., a Minnesota
corporation (the "COMPANY"), certain existing holders of the Company's common
stock, $.1875 par value per share (the "COMMON STOCK"), whose names, addresses
and respective ownership positions in the Company are listed in SCHEDULE 1
attached hereto (the "SHAREHOLDERS"), and Activar, Inc., a Minnesota corporation
(the "INVESTOR"). The Company, the Shareholders and the Investor are
individually referred to as a "PARTY" and collectively referred to as the
"PARTIES."
RECITALS
WHEREAS, the Company is negotiating a Securities Purchase Agreement (THE
"PURCHASE AGREEMENT") pursuant to which the Company intends to issue and sell
shares of the Company's Common Stock and Series A Preferred Stock to the
Investor in exchange for $800,000.
WHEREAS, capitalized terms used herein without definition have the
meanings specified in the Purchase Agreement.
WHEREAS, the Investor has required, as a condition to the closing under
the Purchase Agreement, that the Shareholders enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Parties hereby agree
as follows:
1. VOTING AGREEMENT. Each of the Shareholders hereby agrees, on behalf of
itself and any of such Parties' heirs, beneficiaries, successors or
assigns, to vote all shares of Common Stock, now owned or hereafter
acquired of record or beneficially by each such Shareholder (collectively,
the "SHARES"):
1.1 for the election of designees of the Investor to the Board of
Directors of the Company (the "BOARD"); and
1.2 as directed by the Investor on all matters which are, at any time
and from time to time, presented for a vote to the Company's
shareholders at any regular or special meeting of shareholders.
2. WAIVER OF RIGHT TO ABSTAIN OR BE ABSENT FROM A MEETING. Each of the
Shareholders hereby expressly waives any right which such Shareholder
would otherwise have to abstain, except as expressly provided herein, from
any action taken at, or to be absent from, a duly held meeting of the
Company's shareholders.
3. IRREVOCABLE PROXY. To secure the Shareholders' obligations to vote the
Shares in accordance with this Agreement, each Shareholder hereby appoints
the Investor, from time to time, or its designees, as such Investor's true
and lawful proxy and attorney, with
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the power to act alone and with full power of substitution, to vote all of
the Shares in favor of the matters set forth in Section 1 hereof (as
applicable) IF, AND ONLY IF, such Shareholder fails to vote all of such
Shareholder's shares in accordance with the applicable provisions of
Section 1 hereof. The proxy and power granted by each Shareholder pursuant
to this Section 3 are coupled with an interest and are given to secure the
performance of such Party's duties under Sections 1 and 2 of this
Agreement. Each such proxy will be irrevocable for the term hereof. The
proxy, so long as any Party hereto is an individual, will survive the
death, incompetency and disability of such Party or any other individual
holder of Shares and, so long as any Party hereto is an entity, will
survive the merger or dissolution of such Party or any other entity
holding any Shares.
4. LIMITATIONS ON TRANSFER. No Shareholder shall sell, transfer, assign,
distribute or otherwise dispose of such Party's Shares to any person or
entity, other than to the Investor or the Company, unless and until such
person or entity shall agree in writing to take such Shares subject to,
and shall accept and agree to be bound in writing by, the terms and
conditions of this Agreement, in which case such person or entity shall be
deemed to be a Shareholder for purposes of this Agreement.
5. LEGEND. The Company agrees that each certificate evidencing the Shares
subject to the provisions of this Agreement and each certificate issued in
exchange for or upon the transfer of any such Shares will, upon the
Investor's request, during the term of this Agreement, be endorsed with a
legend in substantially the following form or to the following effect:
THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY TRANSFER
THEREOF ARE SUBJECT TO THE TERMS OF A VOTING AGREEMENT
DATED AS OF SEPTEMBER 12, 2000 BETWEEN XXXXXX
MANUFACTURING, INC. AND CERTAIN OF ITS SHAREHOLDERS
(INCLUDING THE HOLDER OF THIS CERTIFICATE). SUCH VOTING
AGREEMENT CONTAINS CERTAIN RESTRICTIONS ON VOTING AND
TRANSFER OF THE SHARES. A COPY OF SUCH VOTING AGREEMENT IS
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY
AND WILL BE FURNISHED BY THE COMPANY UPON REQUEST AND
WITHOUT CHARGE.
6. EFFECTIVENESS; TERMINATION. The provisions of this Agreement shall be
effective immediately upon the closing under the Purchase Agreement;
provided, however, that if the Closing does not occur on or before October
31, 2000, then this Agreement shall be void and of no effect. This
Agreement, if it becomes effective, shall terminate upon the earlier to
occur of:
6.1 the date that the Investor owns more than fifty (50%) of the issued
and outstanding shares of the Company's voting securities; or
6.2 the third anniversary of the date of closing under the Purchase
Agreement.
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7. REMEDIES; SPECIFIC PERFORMANCE. The Company and each Party understands and
agrees that a breach of the terms and conditions of this Agreement will
cause the other Parties irreparable harm which cannot be reasonably or
adequately compensated by receipt of money damages at law, and that any
Party or Parties may, in their sole discretion, apply to any court of law
or equity or competent jurisdiction for specific enforcement, injunctive
relief and or other equitable remedies to prevent or remedy a breach of
this Agreement or any part hereof. All rights and remedies herein provided
are cumulative and not exclusive of any remedy provided by law or by
equity.
8. DELAYS OR OMISSIONS. Except as expressly provided herein, no delay or
omission to exercise any right, power or remedy accruing to any Party
under this Agreement shall impair any such right, power or remedy of such
Party nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence thereto, or of a similar breach of default
thereafter occurring; nor shall any waiver of any single breach or default
be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind
or character on the part of any Party of any breach or default under the
Agreement, or any waiver on the part of any Party of any provisions or
conditions of this Agreement, must be in writing and shall be effective
only to the extent specifically set forth in such writing.
9. SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon and be enforceable by the
respective heirs, successors and assigns of the Parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other
than the Parties or their respective heirs, successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
10. WAIVERS, AMENDMENTS AND APPROVALS. Any term or provision of this Agreement
requiring performance by or binding upon the Company or the Shareholders
and Investor, or other terms of this Agreement may be amended, and the
observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively),
only by a writing signed by each of the Parties. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon the
Shareholders and Investor (including permitted assigns pursuant to Section
9 hereof).
11. SEVERABILITY. Should any one or more of the provisions of this Agreement
or of any agreement entered into pursuant to this Agreement be determined
to be illegal or unenforceable, all other provisions of this Agreement and
of each other agreement entered into pursuant to this Agreement, shall be
given effect separately from the provision or provisions determined to be
illegal or unenforceable and shall not be affected thereby. The parties
further agree to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision which will achieve, to
the extent possible, the economic, business and other purposes of the void
or unenforceable provision.
12. ATTORNEYS' FEES. Should suit be brought to enforce or interpret any part
of this Agreement, the prevailing party shall be entitled to recover, as
an element of the costs of
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suit and not as damages, reasonable attorneys' fees to be fixed by the
court (including, without limitation, costs, expenses and fees on any
appeal). The prevailing party shall be the party entitled to recover its
costs of suit, regardless of whether such suit proceeds to final judgment.
A party not entitled to recover its costs shall not be entitled to recover
attorneys' fees.
13. ENTIRE AGREEMENT. This Agreement, the schedules hereto, the documents
referenced herein and the exhibits thereto, constitute the entire
understanding and agreement of the Parties with respect to the subject
matter hereof and thereof and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or
implied, written or oral, between the Parties with respect hereto and
thereto. The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms
hereof.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with, the laws of the State of Minnesota, notwithstanding the
laws of conflict of any jurisdiction.
15. COUNTERPARTS. This Agreement may be executed in two 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.
(BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS NEXT.)
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date written above.
COMPANY: XXXXXX MANUFACTURING, INC.
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxx Xxxx
Its: President and Chief Executive Officer
INVESTOR: ACTIVAR, INC.
By: /s/ X.X. Xxxxxxx
---------------------------------------
Name: X.X. Xxxxxxx
Its: President and Chief Operating Officer
SHAREHOLDERS:
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------------
XXXXXXX X. XXXXXXXXX
/s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------------
XXXXXX X. XXXXXXXXXX
/s/ Xxxxxxx X. Perksin
-------------------------------------------
XXXXXXX X. XXXXXXX
(SIGNATURE PAGE VOTING AGREEMENT)
SCHEDULE 1
Number of Number of Number of
Name and Address Shares Held Options Held Warrants Held Total
------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxxxx 347,689 21,000 25,000 393,689
0000 Xxxx Xxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Xxxxxx X. Xxxxxxxxxx 375,958 48,000 50,000 473,958
000 Xxxxxxx Xxx
Xxxxxx Xxxxxx, XX
00000
Xxxxxxx X. Xxxxxxx 250,000 -- -- 250,000
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
