VOTING AGREEMENT
This
VOTING AGREEMENT (the “Agreement”)
is
made and entered into as of November 7, 2007, between and among National
Holdings Corporation, a Delaware corporation (“Parent”),
VFIN
Acquisition Corporation, a Delaware corporation (“Merger
Sub”),
and
the undersigned stockholders (the “Stockholder”)
of
vFinance, Inc., a Delaware corporation (the “Company”).
All
capitalized terms herein not otherwise defined shall have the meaning ascribed
to them in the Merger Agreement (as defined below).
RECITALS
WHEREAS,
pursuant to an Agreement and Plan of Merger dated as of the date hereof (the
“Merger
Agreement”)
by and
among Parent, Merger Sub, and the Company, Merger Sub is merging with and into
the Company (the “Merger”)
and
the Company, as the surviving corporation of the Merger, will thereby become
a
wholly owned subsidiary of Parent;
WHEREAS,
each of
the Stockholders is the beneficial owner (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”))
of
shares of the outstanding common stock, $0.01 par value per share, of the
Company in the amounts indicated on the final page of this Agreement (the
“Shares”);
and
WHEREAS,
in
consideration of the execution of the Merger Agreement by Parent, each of the
Stockholders agrees (i) not to transfer or otherwise dispose of any of such
Stockholder’s Shares or New Shares (as defined below), or any and all other
shares or securities of the Company issued, issuable, exchanged or exchangeable
in respect of any Shares or New Shares (collectively with respect to each
Stockholder, the “Securities”),
and
(ii) agrees to vote such Stockholder’s Securities as set forth
herein.
NOW,
THEREFORE,
in
contemplation of the foregoing and in consideration of the mutual agreements,
covenants, representations and warranties contained herein and intending to
be
legally bound hereby, the parties agree as follows:
1. Agreement
to Retain Shares.
1.1 Transfer
and Encumbrance.
Each
Stockholder agrees to be subject to such Stockholder’s Proxy (as defined in
Section 3) and agrees that he will not take or permit any action to,
directly or indirectly, (i) transfer, sell, assign, give, exchange or pledge,
or
otherwise dispose of or encumber the Stockholder’s Securities prior to the
Expiration Date, or to make any offer or agreement relating thereto, at any
time
prior to the Expiration Date; (ii) deposit any of the Stockholder’s Securities
into a voting trust or enter into a voting agreement or arrangement with respect
to such Stockholder’s Securities or grant any proxy or power of attorney with
respect thereto, in each case, in a manner that conflicts or may conflict with
the Stockholder’s obligations hereunder, or (iii) enter into any contract,
option or other arrangement or undertaking with respect to the direct or
indirect sale, assignment, transfer, exchange or other disposition of or
transfer of any interest in or the voting of any of the Stockholder’s
Securities, in each case, in a manner that conflicts or may conflict with the
Stockholder’s obligations hereunder. As used herein, the term “Expiration
Date”
shall
mean the earlier to occur of (i) the Effective Time (as such terms is
defined in the Merger Agreement), and (ii) the date on which the Merger
Agreement is terminated in accordance with its terms (including any extensions
to the Merger Agreement, as provided for therein).
1.2 New
Shares.
Each
Stockholder agrees that any shares or securities of the capital stock of the
Company that the Stockholder purchases or with respect to which the Stockholder
otherwise acquires beneficial ownership after the date of this Agreement and
prior to the Expiration Date (the “New
Shares”),
and
any and all other shares or securities of the Company issued, issuable,
exchanged or exchangeable in respect of any New Shares, shall be subject to
the
terms and conditions of this Agreement to the same extent as if they constituted
Shares.
2. Agreement
to Vote.
At
every meeting of the stockholders of the Company called with respect to any
of
the following, and at every adjournment thereof, and on every action or approval
by written consent of the stockholders of the Company with respect to any of
the
following, each Stockholder agrees to vote such Stockholder’s Securities: (i) in
favor of approval of the Merger Agreement, the Merger, the transactions
contemplated thereby and any actions required in furtherance of the foregoing;
and (ii) against the consummation of any Superior Proposal or any other action,
proposal, agreement or transaction (other than the Merger, the Merger Agreement
or the transactions contemplated thereby) that would result in a breach of
any
covenant, representation or warranty or any other obligation or agreement of
the
Company under the Merger Agreement, which could result in any of the conditions
to the Company’s obligations under the Merger Agreement not being fulfilled or
which would be inconsistent with the Merger or any other transaction
contemplated by the Merger Agreement. Prior to the Expiration Date, each
Stockholder will not enter into any agreement or understanding with any person
or entity to vote or give instructions in any manner inconsistent with this
Section 2. This Agreement is intended to bind the Stockholders as a stockholder
of the Company only with respect to the specific matters set forth herein.
3. Proxy.
Concurrently with the execution of this Agreement, the Stockholders agree to
deliver to Parent a proxy in the form attached hereto as Exhibit A
(the
“Proxy”),
which
shall be irrevocable to the extent provided in Section 212 of the Delaware
General Corporation Law, covering the total number of Securities beneficially
owned or as to which beneficial ownership is acquired (as such term is defined
in Rule 13d-3 under the Exchange Act) by such Stockholder. The Proxy shall
not be terminated by any act of the Stockholders or by operation of law, whether
by the death or incapacity of the Stockholders or by the occurrence of any
other
event or events (including, without limitation, the termination of any trust
or
estate for which the Stockholder is acting as a fiduciary or fiduciaries or
the
dissolution or liquidation of any corporation or partnership). If between the
execution hereof and the Expiration Date, any Stockholder should die or become
incapacitated, or if any trust or estate holding the Securities should be
terminated, or if any corporation or partnership holding the Securities should
be dissolved or liquidated, or if any other such similar event or events shall
occur before the Expiration Date, certificates representing the Securities
shall
be delivered by or on behalf of such Stockholder in accordance with the terms
and conditions of the Merger Agreement and this Agreement, and actions taken
by
Parent hereunder shall be as valid as if such death, incapacity, termination,
dissolution, liquidation or other similar event or events had not occurred,
regardless of whether or not Parent has received notice of such death,
incapacity, termination, dissolution, liquidation or other event.
4. Acknowledgement.
The
parties acknowledge and agree that neither Parent, nor Parent’s successors,
assigns, subsidiaries, divisions, employees, officers, directors, stockholders,
agents and affiliates shall owe any duty to, whether in law or otherwise, or
incur any liability of any kind whatsoever, including without limitation, with
respect to any and all claims, losses, demands, causes of action, costs,
expenses (including reasonable attorney’s fees) and compensation of any kind or
nature whatsoever to the Stockholders in connection with or as a result of
any
voting (or refrain from voting) by Parent of the Securities subject to the
Proxy
hereby granted to Parent at any annual, special or other meeting or action
or
the execution of any consent of the stockholders of the Company. The parties
acknowledge that, pursuant to the authority hereby granted under the Proxy,
Parent may vote the Securities in furtherance of its own interests, and Parent
is not acting as a fiduciary for the Stockholders.
5. Representations,
Warranties and Covenants of Stockholder.
The
Stockholders hereby severally and not jointly represent, warrant and covenant
to
Parent that:
5.1 Ownership.
As of
the date hereof, the Stockholder has good and marketable title to, and is the
sole legal and beneficial owner of the Shares, in each case free and clear
of
all Liens. As of the date hereof, the Stockholder does not beneficially own
any
shares or securities of the capital stock of the Company other than such
Stockholder’s Shares.
5.2 Authorization.
The
Stockholder has all requisite power and authority to execute and deliver this
Agreement and the Proxy and to consummate the transactions contemplated hereby
and thereby and has sole voting power and sole power of disposition, with
respect to all of the Shares with no restrictions on its voting rights or rights
of disposition pertaining thereto. The Stockholder has duly executed and
delivered this Agreement and this Agreement is a legal, valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except as the enforceability thereof may be limited by (i)
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
in
effect that affect the enforcement of creditors’ rights generally or (ii)
general principals of equity, whether considered in a proceeding at law or
in
equity.
5.3 No
Violation.
Neither
the execution, delivery and performance of this Agreement or the Proxy nor
the
consummation of the transactions contemplated hereby and thereby will
(i) require the Stockholder to file or register with, or obtain any
material permit, authorization, consent or approval of, any governmental agency,
authority, administrative or regulatory body, court or other tribunal, foreign
or domestic, or any other entity, except in compliance with the provisions
of
Section 16 and Section 13D of the Exchange Act; (ii) violate, or cause a
breach of or default (or an event which with notice or the lapse of time or
both
would become a default) under, any contract, agreement or understanding to
which
the Stockholder is a party, or, any statute or law, or any judgment, decree,
order, regulation or rule of any governmental agency, authority, administrative
or regulatory body, court or other tribunal, foreign or domestic, or any other
entity or any arbitration award binding upon the Stockholder; or (iii) cause
the
acceleration of any obligation under or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a
lien
or other encumbrances on any property or asset of the Stockholder pursuant
to
any provision of any indenture, mortgage, lien, lease, agreement, contract,
instrument, order, judgment, ordinance, regulation or decree to which the
Stockholder is subject or by which the Stockholder or any of the Stockholder’s
properties or assets are bound. No proceedings are pending which, if adversely
determined, will have a material adverse effect on any ability to vote or
dispose of any of the Shares. The Stockholder has not previously assigned or
sold any of the Shares to any third party.
6. Further
Assurances.
The
Stockholders each hereby covenants and agrees to execute and deliver, or cause
to be executed or delivered, such additional proxies with respect to such
Stockholder’s Securities (which grants of proxy will be in substantially the
form of Exhibit A hereto) as Parent may reasonably request in connection with
the Stockholder’s obligations under this Agreement.
7. Termination.
Other
than Section 7 hereof (which shall survive in any event), this Agreement and
the
Proxies delivered in connection herewith shall terminate and shall have no
further force or effect to the earlier to occur of (i) upon the mutual written
consent of the Parent, Merger Sub and the Stockholder or (ii) as of the
Expiration Date; provided
that
nothing herein shall relieve any party from liability hereof for breaches of
this Agreement prior to the Expiration Date.
8. Miscellaneous.
8.1 Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, void or unenforceable, then the remainder
of this terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
8.2 Binding
Effect and Assignment.
This
Agreement and all of the provisions hereof shall be binding upon and insure
to
the benefit of the parties hereto and their respective successors and permitted
assigns, but, except as otherwise specifically provided herein, neither this
Agreement nor any of the rights, interests or obligations of the parties hereto
may be assigned by either of the parties without the prior written consent
of
the other; provided,
however,
that
each of Parent and Merger Sub may freely assign its rights to another director
or indirect wholly owned subsidiary of Parent or Merger Sub without such prior
written approval but no such assignment shall relieve Parent or Merger Sub
of
any of its obligations hereunder. Any purported assignment without such consent
shall be void.
8.3 Amendment
and Modification.
This
Agreement may not be modified, amended, altered or supplemented except by the
execution and delivery of a written agreement executed by the parties hereto.
8.4 Specific
Performance; Injunctive Relief.
The
parties hereto acknowledge that Parent 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 the Stockholders set forth herein. Therefore, it is agreed that,
in addition to any other remedies that may be available to Parent upon such
violation, Parent shall have the right to enforce such covenants and agreements
by specific performance, injunctive relief or by any other means available
to
Parent at law or in equity.
8.5 Notices.
All
notices that are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be sufficient in all respects if given
in writing and delivered by hand or national overnight courier service,
transmitted by telecopy or mailed by registered or certified mail, postage
prepaid (effective when delivered by hand or telecopy, one day after dispatch
by
overnight courier, and three business days after dispatch by mail), as
follows:
| (a) |
if
to Parent or Merger Sub, to:
National
Holdings Corporation
000
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxxx Xxxxxxxxxx, CEO
|
with
a copy to:
|
Xxxxxxx
Krooks LLP
000
Xxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxxx X. Xxxxxxx
|
| (b) |
if
to the Stockholder, to the address set forth beneath such Stockholder’s
signature below.
|
8.6 Governing
Law.
This
Agreement shall be governed by, construed and enforced in accordance with the
internal laws of the State of Delaware without giving effect to any choice
or
conflict of law provision, rule or principle (whether of the State of Delaware
or any other jurisdiction) that would cause the application of the laws of
any
jurisdiction other than the State of Delaware.
8.7 Entire
Agreement.
This
Agreement, the Proxy and the Merger Agreement contain the entire understanding
of the parties in respect of the subject matter hereof, and supersede all prior
negotiations and understandings between the parties with respect to such subject
matters.
8.8 Counterparts.
This
Agreement may be executed in several counterparts, each of which shall be an
original, but all of which together shall constitute one and the same agreement.
8.9 Effect
of Headings.
The
section headings herein are for convenience only and shall not affect the
construction or interpretation of this Agreement.
8.10 Jurisdiction.
Any
suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought exclusively in the state or federal court
of the State of New York located in the City of New York, and each of the
parties hereby consents to the jurisdiction of such court (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and 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 suit, action or
proceeding in any such court or that any such suit, action or proceeding which
is brought in any such court has been brought in an inconvenient forum. Process
in any such suit, action or proceeding may be served on any party anywhere
in
the world, whether within or without the jurisdiction of any such court. Without
limiting the foregoing, each party agrees that service of process on such party
as provided in this Section 7.10 shall be deemed effective service of process
on
such party.
8.11 No
Limitation on Actions of the Stockholder as Director.
Notwithstanding anything to the contrary in this Agreement, in the event the
Stockholder is an officer or director of the Company, nothing in this Agreement
is intended or shall be construed to require the Stockholder, in the
Stockholder’s capacity as a officer or director of the Company, to act or fail
to act in accordance with the Stockholder’s fiduciary duties as an officer or
director of the Company.
8.12 Remedies
Not Exclusive.
All
rights, powers and remedies provided under this Agreement or otherwise available
in respect hereof at law or in equity will be cumulative and not alternative,
and the exercise of any thereof by either party will not preclude the
simultaneous or later exercise of any other such right, power or remedy by
such
party.
8.13 Waiver
of Jury Trial.
EACH
PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OT OF OR RELATED TO THIS AGREEMENT, THE PROXY OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.
8.14 Expenses.
If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement or the Proxy, the prevailing party shall be entitled to
reasonable attorney’s fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
8.15 Disclosure.
The
Stockholder hereby authorizes Parent to publish or disclosure in any Parent
SEC
Reports, including, without limitation, a Schedule 13D, its identity and the
nature of its commitments, arrangements and understandings under this
Agreement.
8.16 Consent
of Spouse.
If the
Stockholder is married, the Stockholder agrees to deliver to Parent the Consent
of Spouse attached hereto as Exhibit B
on the
date hereof.
8.17 Legend
on Share Certificates.
Each
certificate representing any Securities shall be endorsed by the Company with
a
legend reading substantially as follows:
“THE
RIGHT TO VOTE THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN A VOTING AGREEMENT, A COPY OF WHICH IS ON FILE AT
THE
CORPORATION’S PRINCIPAL PLACE OF BUSINESS.”
IN
WITNESS WHEREOF, the parties have caused this Voting Agreement to be duly
executed on the day and year first above written.
| NATIONAL HOLDINGS CORPORATION | ||
| |
|
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| By: /s/ Xxxx Xxxxxxxxxx | ||
|
Title:
Chief Executive Officer
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| VFIN ACQUISITION CORPORATION | ||
| |
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| By: /s/ Xxxx Xxxxxxxxxx | ||
|
Title: President
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| STOCKHOLDERS: | ||
| |
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| By: /s/ Xxxxxxx Xxxxxxx | ||
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Xxxxxxx Xxxxxxx |
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Stockholder’s
Address for Notice:
Shares beneficially owned:
5,883,010 shares of the Company Common
Stock
|
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| By: /s/ Xxxxxx Xx Xxxxxxxx | ||
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Xxxxxx Xx Xxxxxxxx |
||
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Stockholder’s
Address for Notice:
Shares beneficially owned:
2,000,000 shares of the Company Common
Stock
|
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EXHIBIT A
PROXY
TO
VOTE STOCK OF
THE
COMPANY
The
undersigned stockholder of vFinance, Inc., a Delaware corporation (the
“Company”),
hereby irrevocably (to the full extent permitted by Section 212 of the
Delaware General Corporation Law, except as provided below) appoints Xxxx
Xxxxxxxxxx and Xxxxxx Xxxxxx of National Holdings Corporation, a Delaware
corporation (“Parent”),
and
each of them, as the sole and exclusive attorneys and proxies 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, issuable,
exchanged or exchangeable 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 the final page of this Proxy. Upon the undersigned’s execution of this Proxy,
any and all prior proxies given by the undersigned with respect to any Shares
are hereby revoked and the undersigned agrees not to grant any subsequent
proxies with respect to the Shares until after the Expiration Date (as defined
below).
This
Proxy is irrevocable (to the extent provided in Section 212 of the Delaware
General Corporation Law), is coupled with an interest and is granted pursuant
to
that certain Voting Agreement dated as of November 7, 2007, by and among Parent,
VFIN Acquisition Corporation, a Delaware corporation and wholly owned subsidiary
of Parent (“Merger
Sub”),
and
the undersigned stockholder (the “Voting
Agreement”),
and
is granted in consideration of Parent entering into that certain Agreement
and
Plan of Reorganization and Merger, dated as of November 7, 2007 (the
“Merger
Agreement”),
by
and among the Company, Parent and Merger Sub. The Merger Agreement provides
for
the merger of Merger Sub with and into the Company (the “Merger”)
with
the Company as the surviving corporation. As used herein, the term “Expiration
Date”
shall
mean the earlier to occur of (i) the Effective Time (as such terms is
defined in the Merger Agreement), and (ii) the date on which the Merger
Agreement is terminated in accordance with its terms (including any extensions
to the Merger Agreement, as provided for therein).
The
attorneys and proxies named above, and each of them are hereby authorized and
empowered by the undersigned, at any time prior to the Expiration Date, to
act
as the undersigned’s attorney and proxy to vote the Shares, and to exercise all
voting and other rights of the undersigned with respect to the Shares
(including, without limitation, the power to execute and deliver written
consents pursuant to Section 228 of the Delaware General Corporation Law),
at every annual, special or other meeting or action of the stockholders of
the
Company, as applicable, or at any adjournment thereof and in every written
consent in lieu of such meeting: (i) in favor of approval of the Merger
Agreement, the Merger, the transactions contemplated thereby and any actions
required in furtherance of the foregoing; and (ii) against the consummation
of
any Superior Proposal or any other action, proposal, agreement or transaction
(other than the Merger, the Merger Agreement or the transactions contemplated
thereby) that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement, which could result in any of the conditions to the Company’s
obligations under the Merger Agreement not being fulfilled or which would be
inconsistent with the Merger or any other transaction contemplated by the Merger
Agreement. 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 is irrevocable (to the extent provided in Section 212 of the Delaware
General Corporation Law). This Proxy shall terminate, and be of no further
force
and effect, automatically upon the Expiration Date.
Dated:
November 7, 2007
|
/s/
Xxxxxxx X. Xxxxxxx
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(Signature
of Stockholder)
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Xxxxxxx
X. Xxxxxxx
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(Print
Name of Stockholder)
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Shares
beneficially owned:
|
||
|
5,883,010
shares of the Company Common Stock
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/s/
Xxxxxx Xx Xxxxxxxx
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|
(Signature
of Stockholder)
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||
|
Xxxxxx
Xx Xxxxxxxx
|
||
|
(Print
Name of Stockholder)
|
||
|
Shares
beneficially owned:
|
||
|
2,000,000
shares of the Company Common
Stock
|
EXHIBIT
B
CONSENT
OF SPOUSE
I,
Xxxxxx
Xxxxxxx, spouse of Xxxxxxx Xxxxxxx (“Stockholder”),
have
read and hereby approve the foregoing Voting Agreement. In consideration
of the
benefits to which the Stockholder is entitled under the Voting Agreement,
I
hereby agree to be irrevocably bound by the Voting Agreement and further
agree
that any community property or other such interest shall be similarly bound
by
the Voting Agreement. I hereby appoint my spouse as my attorney-in-fact with
respect to any amendment or exercise of any rights under the Voting
Agreement.
|
/s/
Xxxxxx
Xxxxxxx
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||
| Spouse of Stockholder | ||
EXHIBIT
B
CONSENT
OF SPOUSE
I,
Magnolia Caripa de Xx Xxxxxxxx, spouse of Xxxxxx Xx Xxxxxxxx (“Stockholder”),
have
read and hereby approve the foregoing Voting Agreement. In consideration
of the
benefits to which the Stockholder is entitled under the Voting Agreement,
I
hereby agree to be irrevocably bound by the Voting Agreement and further
agree
that any community property or other such interest shall be similarly bound
by
the Voting Agreement. I hereby appoint my spouse as my attorney-in-fact with
respect to any amendment or exercise of any rights under the Voting
Agreement.
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/s/
Xxxxx Xxxxxx de Xx
Xxxxxxxx
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Spouse
of Stockholder
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