VOTING AGREEMENT
THIS VOTING AGREEMENT AND IRREVOCABLE PROXY (this "Agreement") dated as of
April 25, 2007, is made and entered into among Wynnefield Small Cap Value
Offshore Fund, Ltd., a private investment company organized under the laws of
the Cayman Islands, Wynnefield Partners Small Cap Value, L.P., a Delaware
limited partnership, Wynnefield Partners Small Cap Value, L.P., I, a Delaware
limited partnership, and WebFinancial Corporation, a Delaware corporation,
(each, a "Purchaser" and collectively, the "Purchasers"), and each party listed
under the heading "Stockholders" on the signature page(s) hereof (each a
"Stockholder" and collectively, the "Stockholders").
W I T N E S S E T H:
WHEREAS, Purchasers and Xxxxxx + Xxxxxx, Inc., a Delaware corporation (the
"Company"), have entered into the Investor Purchase Agreement, dated as of even
date herewith (the "Purchase Agreement"), which provides for, among other
things, the sale and issuance by the Company of an aggregate of 40,000,000
shares of Common Stock of the Company, par value $0.01 per share (the "Common
Stock"), on the terms and conditions contained in the Purchase Agreement;
WHEREAS, as of the date hereof, each Stockholder owns, beneficially and of
record, and has the power to vote the number of shares of Common Stock set forth
beside such Stockholder's name on Exhibit A hereto (all of such shares of Common
Stock owned by the Stockholders, together with any other shares of capital stock
of the Company acquired by any of such Stockholders, including shares of Common
Stock acquired through the exercise of any stock option, after the date hereof
and prior to the Termination Date (as hereinafter defined), being referred to
herein collectively as the "Shares"); and
WHEREAS, as a condition to the willingness of Purchasers to enter into the
Purchase Agreement, Purchasers have required that the Stockholders agree, and in
order to induce Purchasers to enter into the Purchase Agreement, the
Stockholders have agreed, to enter into this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
CERTAIN COVENANTS
1.1 Grant of Proxy; Voting Agreement.
(a) Each Stockholder hereby revokes, or has previously revoked, all
prior proxies, voting agreements or powers-of-attorney given or entered into
with respect to any of his respective Shares, and hereby irrevocably (to the
fullest extent permitted by law) constitutes and appoints X. Xxxxxxxxxxx, or any
designee of Xxx Xxxxxxxxxxx, (the "Attorney-in-Fact") as his true and lawful
proxy and attorney-in-fact, for and in the name, place and stead of such
Stockholder, to vote his respective Shares at any time during the period from
the date of this Agreement to the Termination Date set forth in Article 5 below,
(such period being referred to herein as the "Term"), at any annual, special or
other meeting of the stockholders of the Company, and at any adjournment or
postponements thereof, or pursuant to any written consent in lieu of a meeting
or otherwise, in the following manner:
(i) in favor of approval of the Purchase Agreement, the
Shareholder Agreement, the Registration Rights Agreement and the transactions
contemplated thereby, any other matter necessary for the consummation of the
transactions contemplated thereby ("Transactions") and considered and voted upon
by the stockholders of the Company at any such meeting of stockholders or in
such written consent;
(ii) against approval of any proposal made in opposition to or
in competition with the consummation of the transactions contemplated by the
Purchase Agreement or any action or agreement that would result in a breach in
any respect of any covenant, representation or warranty or any other obligation
or agreement of the Company under the Purchase Agreement or of the Stockholder
under this Agreement;
(iii) in favor of any amendment to the Certificate of
Incorporation of the Company to increase the number of shares of Common Stock
authorized thereunder in accordance with the terms and conditions of the
Purchase Agreement.
(b) Concurrently with the execution of this Agreement, each
Stockholder has delivered to Xxx Xxxxxxxxxxx a proxy in the form attached hereto
as Exhibit B (individually, the "Proxy", and collectively, the "Proxies"), which
shall be irrevocable to the fullest extent permissible by applicable law, with
respect to his or her respective Shares.
(c) Notwithstanding the foregoing grant to Xxx Xxxxxxxxxxx of the
Proxies, if Xxx Xxxxxxxxxxx elects not to exercise its rights to vote any of the
Shares pursuant to the Proxies, each Stockholder agrees in his capacity as a
stockholder of the Company and not in his capacity as a director, officer or
employee of the Company, to vote his or her respective Shares during the Term as
indicated in Section 1.1(a) at any annual, special or other meeting of the
stockholders of the Company and at any adjournment or postponements thereof, or
pursuant to any written consent in lieu of a meeting or otherwise.
(d) Each Stockholder agrees that his irrevocable proxy and all other
power and authority intended to be conferred by Section 1.1(a) are coupled with
an interest sufficient in law to support an irrevocable power and shall not be
terminated by any act of such Stockholder or by the occurrence of any event or
events except as provided herein, except as provided in paragraph (e) of this
subsection 1.1.
(e) The irrevocable Proxies contemplated hereby shall not be
affected by the death, disability or dissolution of any Stockholder, and shall
be binding upon the heirs, successors and assigns or the respective
Stockholders.
1.2 Further Assurances. Each Stockholder agrees that, from time to time,
at Purchasers' reasonable request, each Stockholder shall perform such further
acts (other than affix a legend regarding this Agreement to the certificates
representing his Shares) and execute such further documents and instruments as
may reasonably be required to vest in the Attorney-in-Fact the power to carry
out and give effect to the provisions of this Agreement.
1.3 No Inconsistent Actions. Each Stockholder agrees that such Stockholder
shall not take any action, except as required to fulfill such Stockholder's
fiduciary duties as an officer or director of the Company, that would in any way
restrict, limit or interfere with the performance of the such Stockholder's
obligations hereunder or the transactions contemplated hereby or by the Purchase
Agreement, including, without limitation, the Transactions, or which shall cause
any of the representations set forth in Article 2 of this Agreement to become
untrue.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each of the Stockholders, severally and not jointly, represents and
warrants to Purchasers, as of the date hereof, as follows:
2.1 Authorization. Such Stockholder has the requisite power and authority
to enter into and deliver this Agreement and to fully perform the obligations
required to be performed by him or her hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of such Stockholder,
this Agreement has been duly executed by him, and does not violate any
agreement, lease, indenture, judgment, order or decree or other instrument which
is binding upon such Stockholder. The execution, delivery and performance of
this Agreement have been duly and validly authorized by such Stockholder acting
in a fiduciary, representative or corporate capacity (if applicable). Assuming
this Agreement has been duly and validly executed by a duly authorized officer
of each Purchaser, this Agreement constitutes the legal, valid and binding
obligation of such Stockholder, enforceable against him or her in accordance
with its terms, subject to the qualification, however, that enforcement of the
rights and remedies created hereby is subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws of general
application related to or affecting creditors' rights and to general equity
principles.
2.2 No Consent. No authorization, consent or approval of, or any filing
with, any public body or authority or other party is necessary for the execution
and delivery of this Agreement and consummation by such Stockholder of the
transactions contemplated by this Agreement.
2.3 Ownership. Such Stockholder is the record and beneficial owner of,
and, except as set forth on Exhibit A, owns good and marketable title to, the
number of Shares set forth beside such Stockholder's name and federal tax
identification number or social security number on Exhibit A, free and clear of
any and all liens, restrictions, claims, equities, charges, options, rights of
first refusal, or encumbrances, with no defects of title whatsoever, except for
such restrictions arising under applicable securities law and this Agreement.
Except as set forth on Exhibit A, such Stockholder owns no shares of capital
stock of the Company or any other equity security of the Company or right of any
kind to have any such equity security issued. Such Stockholder has the exclusive
right, power and authority to vote the Shares set forth on Exhibit A owned by
such Stockholder, and with the exception of this Agreement, such Stockholder is
not party to or bound by any agreements affecting or relating to such
Stockholder's right to transfer or vote the Shares owned by such Stockholder.
2.4 Adequate Information. Such Stockholder is a sophisticated party with
respect to his Shares and has adequate information concerning the business and
financial condition of the Company to make an informed decision regarding the
Shares and has independently and without reliance upon Purchasers and based on
such information as such Stockholder has deemed appropriate, made its own
analysis and decision to enter into this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES AND OF THE PURCHASERS
Each Purchaser represents and warrants to each Stockholder, as of the date
hereof, that such Purchaser has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. Such Purchaser has duly executed and delivered this
Agreement and this Agreement is a legal, valid and binding agreement of such
Purchaser, enforceable against such Purchaser in accordance with its terms,
subject to the qualification however, that enforcement of the rights and
remedies created hereby is subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws of general application
related to or affecting creditors' rights and to general equity principles.
ARTICLE 4
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The respective representations and warranties of each Stockholder and
Purchasers contained herein shall not be deemed waived or otherwise affected by
any investigation made by the other party hereto, and each representation and
warranty contained herein shall survive the closing of the transactions
contemplated hereby until the expiration of the applicable statute of
limitations, including extensions thereof.
ARTICLE 5
TERMINATION
This Agreement shall terminate upon the earlier to occur of (i) October]
31, 2007 or (ii) approval by the stockholders of the Company of (a) an amendment
to the Company's Certificate of Incorporation that increases the number of
authorized shares of Common Stock to 500,000,000 shares, and (b) the
transactions contemplated by the Purchase Agreement (such date of termination of
this Agreement being referred to herein as the "Termination Date"). At the
Termination Date, this Agreement shall become void and be of no further force
and effect, provided that nothing herein shall relieve any party from liability
hereof for breaches of this Agreement prior to the Termination Date.
ARTICLE 6
MISCELLANEOUS
6.1 Defined Terms. All capitalized terms used but not defined herein shall
have the meanings set forth in the Purchase Agreement.
6.2 No Third Party Beneficiaries. Nothing in this Agreement shall confer
any rights or remedies upon any person other than the parties hereto.
6.3 Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes any
prior understandings, agreements, or representations by or among the parties,
written or oral, with respect to the subject matter hereof. The parties hereby
agree that for purposes of this Agreement neither party has made to the other
any representations, warranties or covenants or other disclosures other than
those specifically contained in this Agreement. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be binding unless
the same shall be in writing and duly executed by the parties hereto.
6.4 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective
successors. No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other parties.
6.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6.6 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law thereof.
6.8 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
6.9 Construction. The language used in this Agreement shall be deemed to
be the language chosen by the parties hereto to express their mutual intent, and
no rule of strict construction shall be applied against any party. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
6.10 Fees and Expenses. All costs and expenses incurred by the parties
hereto in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses.
6.11 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 given upon receipt) by delivery in person, by telecopy
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses, or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 6.11:
If to:
Wynnefield Partners SmallCap Value, L.P.
Wynnefield Capital Management, LLC
Wynnefield SmallCap Value Offshore Fund, Ltd.:
c/o Xxxxxx Xxxx
000 0xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Tel: 000.000.0000
Fax: 000.000.0000
with a copy to: Xxxx Xxxxxxx, PC
1350 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
WebFinancial Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to any of the
Stockholders: At the address set forth under such
Stockholder's name on Exhibit A
with a copy to: Blank Rome LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
6.12 Fiduciary Duties. Notwithstanding anything in this Agreement to the
contrary: (a) no Stockholder makes any agreement or understanding herein in any
capacity other than in such Stockholder's capacity as a record holder and
beneficial owner of Shares, (b) if, during the Term, any Stockholder or any
representative of any Stockholder is a member of the Company's Board of
Directors or an officer of the Company, nothing herein shall be construed to
limit or affect any action or inaction by any such officer or director acting in
such person's capacity as a director or officer of the Company and solely in the
exercise of his or her fiduciary duties and responsibilities in such capacity,
and (c) no Stockholder shall have any liability to Purchasers or any of its
affiliates under this Agreement or otherwise as a result of any action or
inaction by any Stockholder, or any officer, partner, member or employee, as
applicable, of any Stockholder serving on the Company's Board of Directors
acting in such person's capacity as a director or officer of the Company and
solely in the exercise of his or her fiduciary duties and responsibilities in
such capacity.
6.13 Specific Performance. Each party hereto recognizes and agrees that,
if for any reason any of the provisions of this Agreement are not performed by
the other party in accordance with their specific terms or are otherwise
breached, immediate and irreparable harm or injury would be caused to the
non-breaching party for which money damages would not be an adequate remedy.
Accordingly, the parties agree that, in addition to any other available
remedies, the non-breaching party shall be entitled to an injunction restraining
any violation or threatened violation of the provisions of this Agreement
without the necessity of the non-breaching party posting a bond or other form of
security. In the event that any action should be brought in equity to enforce
the provisions of this Agreement, the breaching party will not allege, and the
breaching party hereby waives the defense, that there is an adequate remedy at
law.
6.14 Submission to Jurisdiction. Any suit, action or proceeding with
respect to this Agreement shall be brought in any court of competent
jurisdiction in the State of New York, and the parties hereto hereby submit to
the exclusive jurisdiction of any such court for the purpose of any such suit,
action, proceeding or judgment. The parties hereto hereby irrevocably waive (i)
any objections which any of them may now or hereafter have to the laying of the
venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in any such court, (ii) any claim that any such suit, action
or proceeding brought in such court has been brought in any inconvenient forum
and (iii) any right to a jury trial. Each party hereby consents to service of
process in any such proceeding in any manner permitted by New York law, except
to the extent that Delaware General Corporation Law is mandatorily applicable
and agrees that service of process by registered or certified mail, return
receipt requested, at its address specified pursuant to Section 6.11 above with
respect to the Purchasers, and at the address set forth under such Stockholder's
name on Exhibit A with respect to the Stockholders, shall be reasonably
calculated to give actual notice.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PURCHASERS:
WYNNEFIELD SMALL CAP VALUE OFFSHORE FUND, LTD.
By: Wynnefield Capital Management, Inc.,
its Investment Manager
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
Title: President
WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P.
By: Wynnefield Capital Management, LLC,
its general partner
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
Title: Co-Managing Member
WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. I
By: Wynnefield Capital Management, LLC,
its general partner
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
Title: Co-Managing Member
WEBFINANCIAL CORPORATION
By: /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
Title:
STOCKHOLDERS:
/s/ Xxxxxxx X. Xxxx
-----------------------------------------
XXXXXXX X. XXXX
/s/ Xxxxxx Xxxxxxx
-----------------------------------------
XXXXXX XXXXXXX
/s/ Xxx X. Xxxxxxxxxxx
-----------------------------------------
XXX X. XXXXXXXXXXX
XXXXXX XXXXXX
PRIME PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
ACKNOWLEDGED:
XXXXXX + XXXXXX, INC. (the "Company")
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
EXHIBIT A
Stockholder/Address Shares
------------------------------------------------- ---------------------------
Wynnefield Small Cap Value Offshore Fund, Ltd.
c/o Xxxxxx Xxxx
000 0xx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Wynnefield Partners Small Cap Value, L.P.
c/o Xxxxxx Xxxx
000 0xx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Wynnefield Partners Small Cap Value, L.P., I
c/o Xxxxxx Xxxx
000 0xx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
WebFinancial Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx
Xxxxxxx X. Xxxx
Xxxxxx Xxxxxxx
Xxx X. Xxxxxxxxxxx
Xxxxxx Xxxxxx
Prime Partners, Inc.
EXHIBIT B
IRREVOCABLE PROXY
The undersigned stockholder of Xxxxxx + Ciocia, Inc., a Delaware
corporation (the "Company"), hereby irrevocably, to the fullest extent permitted
by law and subject to the Voting Agreement (defined below), appoints [name,
jurisdiction of organization, as applicable, and address], as the sole and
exclusive attorney and proxy of the undersigned, with full power of substitution
and resubstitution, to vote and exercise all voting and related rights (to the
full extent that the undersigned is entitled to do so) with respect to all of
the shares of capital stock of the Company that now are or hereafter may be
beneficially owned by the undersigned, and any and all other shares or
securities of the Company issued or issuable in respect thereof on or after the
date hereof (collectively, the "Shares") in accordance with the terms of this
Proxy. The Shares beneficially owned by the undersigned stockholder of the
Company as of the date of this Proxy are listed on Exhibit A to the Voting
Agreement of even date herewith by and between __________ and __________
(collectively, the "Purchasers"), the undersigned stockholder and the other
parties thereto ("Voting Agreement"). Upon the execution of this Proxy by the
undersigned, any and all prior proxies given by the undersigned with respect to
any Shares are hereby revoked and the undersigned hereby agrees not to grant any
subsequent proxies with respect to the Shares until after the Termination Date
(as defined below).
This Proxy is irrevocable to the fullest extent permitted by law, is
coupled with an interest and is granted pursuant to the Voting Agreement, and is
granted in consideration of Purchasers entering into that certain Investor
Purchase Agreement (the "Purchase Agreement"), by and among Purchasers, the
Company and the other parties thereto dated as of April __, 2007. As used
herein, the term "Termination Date" shall mean the earlier to occur of (i)
October 31, 2007 or (ii) the date of approval by the stockholders of the Company
of (a) an amendment to the Company's Certificate of Incorporation that increases
the number of authorized shares of Common Stock to 500,000,000 shares, and (b)
the transactions contemplated by the Purchase Agreement.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned, at any time prior to the
Termination Date, to act as the undersigned's attorney and proxy to vote the
Shares, and to exercise all voting, consent and similar rights of the
undersigned with respect to the Shares (including, without limitation, the power
to execute and deliver written consents) at every annual, special, adjourned or
postponed meeting of stockholders of the Company and in every written consent in
lieu of such meeting (a) in favor of approval of the Purchase Agreement, the
transactions contemplated thereby, any other matter necessary for the
consummation of the transactions contemplated thereby and considered and voted
upon by the stockholders of the Company at any such meeting of stockholders or
in such written consent; (b) against approval of any proposal made in opposition
to or in competition with the consummation of the transactions contemplated by
the Purchase Agreement or any action or agreement that would result in a breach
in any respect of any covenant, representation or warranty or any other
obligation or agreement of Company under the Purchase Agreement or of the
undersigned under the Voting Agreement; and (c) in favor of any amendment to the
Certificate of Incorporation of the Company to increase the number of shares of
Common Stock authorized thereunder.
B-1
The attorneys and proxies named above may not exercise this Proxy on any
other matter except as provided above. The undersigned stockholder may vote the
Shares on all other matters. Any obligation of the undersigned hereunder shall
be binding upon the successors and assigns of the undersigned.
This Proxy shall terminate, and be of no further force and effect,
automatically upon the Termination Date.
Dated: April _____, 2007 ________________________________
Name:___________________________
[Notary]
B-2
