EXHIBIT 1
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VOTING AGREEMENT
VOTING AGREEMENT, dated as of August 31, 2005 (this "Agreement"), among
Trinsic, Inc., a Delaware corporation ("Company"), and The 1818 Fund III, L.P.
(the "Stockholder").
WHEREAS, on July 15, 2005, the Company issued to the Stockholder
24,084.769 shares of Series H Preferred Stock, par value $0.01 per share (the
"Preferred Stock"); and
WHEREAS, the Stockholder was and remains the sole "beneficial owner" (as
defined under Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
and "beneficial ownership" having a meaning correlative to such definition) of
all outstanding Preferred Stock; and
WHEREAS, by its terms, the Preferred Stock has an aggregate voting
strength of 61,755,817 shares of the Company's common stock, par value $0.01 per
share (the "Common Stock"), or 2,564.1 Common Stock votes ("Votes") per share of
Preferred Stock; and
WHEREAS, under applicable rules of The Nasdaq SmallCap Market (the
"Rules"), upon which the Common Stock is listed, the maximum permissible
aggregate voting strength of the Preferred Stock is 58,743,339 Votes, or 2,439.0
Votes per share of Preferred Stock; and
WHEREAS, under the Rules, the Preferred Stock is not permitted to vote
upon its convertibility into Common Stock at a price that is below $0.41 per
share; and
WHEREAS, both the Company and the Stockholder derive substantial benefit
from the listing of the Common Stock on The Nasdaq SmallCap Market; and
WHEREAS, the Company and Stockholder have agreed to enter into this
Agreement governing the voting and disposition of the Preferred Stock so as to
achieve substantive compliance with the Rules thereby facilitating such listing.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. Voting of Shares. To the extent required by the Rules, the
Stockholder, in respect of its Preferred Stock, and only in respect of its
Preferred Stock, hereby agrees (1) not to vote in any matter submitted for a
vote of holders of Common Stock seeking to approve the conversion of Preferred
Stock into Common Stock at a price that is below $0.41 per share, and (2) not to
vote 125.1 Votes per share of Preferred Stock (or 3,012,479 votes in aggregate
in respect of all outstanding Preferred Stock) with respect to any other matter
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submitted for a vote of holders of Common Stock. The Stockholder further agrees
not to vote in respect of its Preferred Stock, and only in respect of its
Preferred Stock, in any matter submitted for a vote of holders of Common Stock
after September 30, 2005, except to the extent required to amend the terms of
the Preferred Stock relating to voting rights so as to comply with the Rules
(the "Preferred Stock Amendment").
2. Amendment of Exchange and Purchase Agreement. Section 10.1 of
the Exchange and Purchase Agreement, dated as of July 15, 2005, by and among the
Company and the Stockholder is hereby amended to the extent necessary to allow
the Stockholder to comply with Section 1 of this Agreement.
3. No Transfer of Beneficial Ownership of Shares. The Stockholder
hereby covenants and agrees that it will not, directly or indirectly, transfer
beneficial ownership of the Preferred Stock to any person prior to consummation
of the Preferred Stock Amendment.
4. Termination of Agreement. This Agreement shall terminate upon
the earlier of (1) approval of the conversion of the Preferred Stock into Common
Stock at a price that is below $0.41 per share by the holders of Common Stock in
a manner consistent with this Agreement and (2) the consummation of the
Preferred Stock Amendment.
5. Preferred Stock Amendment. If the approval of conversion of the
Preferred Stock into Common Stock at a price that is below $0.41 per share by
the holders of Common Stock, in a manner consistent with this Agreement, has not
occurred on or before Sepember 30, 2005, the Company agrees to promptly call for
a special meeting of stockholders, and commence a related proxy solicitation,
for the purpose of seeking approval of the Preferred Stock Amendment. The
Stockholder hereby agrees to vote, in respect of its Preferred Stock and its
Common Stock, in favor of any such proposal to adopt the Preferred Stock
Amendment.
6. No Third Party Beneficiaries. No provision of this Agreement is
intended to, or shall, confer any third party beneficiary or other rights or
remedies upon any person other than the parties hereto.
7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS EXECUTED IN AND TO BE PERFORMED IN THAT STATE.
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IN WITNESS WHEREOF, the Company and the Stockholder have duly executed
this Agreement, as of the date first written above.
COMPANY:
TRINSIC, INC.
By: /s/ Xxxxxx X. Xxxxx, III
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Name: Xxxxxx X. Xxxxx, III
Title: Chief Executive Officer
STOCKHOLDER:
THE 1818 FUND III, L.P.
By: XXXXX BROTHERS XXXXXXXX & CO.
General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
Title: Partner
Address: 000 Xxxxxxxx, Xxx Xxxx, XX 00000
