EXHIBIT 99.1
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement"), dated as of November 4, 2005,
is by and among the persons listed on Schedule I hereto (each a "Shareholder",
and, collectively, the "Shareholders").
WHEREAS, MTM Technologies, Inc., a New York corporation (the
"Company"), proposes to borrow up to $25,000,000 (the "NEBF Loan") from Columbia
Partners, L.L.C. Investment Management, in its capacity as agent and authorized
representative of the National Electrical Benefit Fund (the "Lender").
WHEREAS, as a condition to the NEBF Loan, the Company expects to issue
up to 700,000 warrants (the "Financing Warrants") to purchase shares of its
Common Stock and will issue shares of its Common Stock upon the exercise of such
warrants to the Lender (together with the Financing Warrants, the "Financing
Warrants and Shares").
WHEREAS, as the Financing Warrants and Shares, pursuant to Nasdaq
policy, may be aggregated with the shares of Common Stock to be issued by the
Company as part of the consideration paid to Nexl, Inc. in connection with the
merger of Nexl, Inc. with a wholly owned subsidiary of the Company, resulting in
an increase in the Company's outstanding Common Stock of more than 20%, the
Company will seek shareholder approval (the "Shareholder Approval") for the
issuance of the Financing Warrants and Shares pursuant to the Nasdaq Marketplace
Rules.
WHEREAS, the Shareholders believe that the issuance of the Financing
Warrants and Shares (the "Transactions") are in the best interests of the
Company and its shareholders; and
WHEREAS, the Company's voting stock consists of Common Stock, $0.001
par value per share ("Common Stock") and Preferred Stock, $0.001 par value per
share ("Preferred Stock"). For voting purposes, the shares of Preferred Stock
would "convert" into an equal number of shares of Common Stock. Each share of
Preferred Stock as so "converted", together with the Common Stock, is
hereinafter collectively referred to as our "Voting Stock."
WHEREAS, the Shareholders own approximately 69% of the Voting Stock and
each Shareholder is the record and beneficial owner, or the trustee of a trust
whose beneficiaries are the beneficial owners, of such number of shares of
Voting Stock of the Company, and such number of Common Stock issuable upon
exercise of warrants ("Warrants"), set forth opposite such Shareholder's name on
Schedule I hereto, such Voting Stock and Warrants are the only Voting Stock and
Warrants of the Company owned by the Shareholders, and collectively referred to
herein as the "Shares."
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, the Shareholders
agree as follows:
1. Representations and Warranties of the Shareholders. Each Shareholder
hereby, severally and not jointly, represents and warrants to the other
Shareholders as follows:
(a) Authority. The Shareholder has all requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Shareholder. This Agreement has been duly executed and
delivered by the Shareholder and constitutes a valid and binding obligation of
the Shareholder enforceable against the Shareholder in accordance with its terms
(subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief, or other equitable remedies). Except as set forth on Schedule
II hereto, neither the execution, delivery or performance of this Agreement by
the Shareholder nor the consummation by the Shareholder of the transactions
contemplated hereby will (i) require any filing with, or permit, authorization,
consent or approval of, any federal, state, local or municipal foreign or other
government or subdivision, branch, department or agency thereof or any
governmental or quasi-governmental authority of any nature, including any court
or other tribunal, (a "Governmental Entity"), (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default under, or give rise to any right of termination, amendment, cancellation
or acceleration under, or result in the creation of any pledge, claim, lien,
option, charge, encumbrance or security interest of any kind or nature
whatsoever (a "Lien") upon any of the properties or assets of the Shareholder
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, permit, concession, franchise, contract, agreement or
other instrument or obligation (a "Contract") to which the Shareholder is a
party or by which the Shareholder or any of the Shareholder's properties or
assets, including the Shareholder's Shares, may be bound or (iii) violate any
judgment, order, writ, preliminary or permanent injunction or decree (an
"Order") or any statute, law, ordinance, rule or regulation of any Governmental
Entity (a "Law") applicable to the Shareholder or any of the Shareholder's
properties or assets, including the Shareholder's Shares.
(b) The Shares. Subject to the terms of this Agreement, the
Shareholder's Shares and the certificates representing such Shares are now, and
at all times during the term hereof will be, held by such Shareholder, or by a
nominee or custodian for the benefit of such Shareholder or any transferee of
such Shares who has agreed in writing to be bound by this Agreement. The
Shareholder has good and marketable title to such Shares, free and clear of any
Liens, proxies, voting trusts or agreements, understandings or arrangements,
except for proxies arising hereunder pursuant to Section 4(a) hereof and except
as set forth on Schedule II hereto.
2. Board Approval. Each Shareholder understands and acknowledges that
the Board of Directors of the Company has, to the extent required by applicable
law, duly and validly authorized and approved, the Transactions.
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3. Agreements of Shareholders. Each Shareholder, severally and not
jointly, agrees as follows:
(a) The Shareholder shall not enter into or exercise its rights under
any voting arrangement, whether by proxy, voting agreement, voting trust,
power-of-attorney or otherwise, with respect to the Shares or take any other
action, that would in any way restrict, limit or interfere with the performance
of its obligations hereunder or the transactions contemplated hereby.
(b) At any meeting of Shareholders of the Company called to vote upon
the Transactions or at any adjournment thereof or in any other circumstances
upon which a vote, consent or other approval (including by written consent) with
respect to the Transactions or which is necessary to consummate the Transactions
is sought, each Shareholder shall, including by executing a written consent if
requested by the Company, vote (or cause to be voted) such Shareholder's Shares
in favor of the Transactions ; provided however that in the event a vote or
other approval is required for a transaction where the principal amount of the
NEBF Loan is reduced below $25,000,000 and in connection with such reduction the
number of Financing Warrants and Shares is not reduced ratably (a "Modified
Transaction"), the Shareholders shall not be obligated to vote (or cause to be
voted) such Shareholders Shares in favor of the Modified Transaction under the
term of this Agreement.
4. Grant of Irrevocable Proxy Coupled with an Interest; Appointment of
Proxy.
(a) Each Shareholder hereby irrevocably grants to, and appoints Xxxx X.
Xxxxxx, and any other individual who shall hereafter be designated by the
Shareholders, and each of them, as such Shareholder's proxy and attorney-in-fact
(with full power of substitution), for and in the name, place and stead of such
Shareholder, to vote such Shareholder's Shares, or grant a consent or approval
in respect of such Shares, at any meeting of Shareholders of the Company or at
any adjournment thereof or in any other circumstances upon which their vote,
consent or other approval is sought in favor of the Transactions.
(b) Each Shareholder represents that, except with respect to the Other
Voting Agreement listed on Schedule II hereto, any prior proxies heretofore
given in respect of such Shareholder's Shares are not irrevocable, and that any
such prior proxies are hereby revoked.
(C) EACH SHAREHOLDER HEREBY AFFIRMS THAT THE PROXY SET FORTH IN THIS
SECTION 4 IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE UNTIL SUCH TIME AS THIS
AGREEMENT TERMINATES IN ACCORDANCE WITH ITS TERMS. Such Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 609 of the New York
Business Corporation Law.
5. Further Assurances. Each Shareholder will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments as
the Company may reasonably request for the purpose of effectively carrying out
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the transactions contemplated by this Agreement and to vest the power to vote
such Shareholder's Shares as contemplated by Section 4.
6. Termination. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate upon the earlier of (a) the date Shareholder
Approval is obtained, (b) the termination of the NEBF Loan negotiations or (c)
January 31, 2006. Nothing in this Section 6 shall relieve any Shareholder from
liability for willful breach of this Agreement.
7. General.
(a) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
(b) Entire Agreement; Third-Party Beneficiaries. Each party hereby
acknowledges that no other party or any other person or entity has made any
promises, warranties, understandings or representations whatsoever, express or
implied, not contained in this Agreement and acknowledges that it has not
executed this Agreement in reliance upon any such promises, representations,
understandings or warranties not contained herein and that this Agreement
supersedes all prior agreements and understandings between the parties with
respect thereto. There are no promises, covenants or undertakings other than
those expressly set forth or provided for in this Agreement. The Company shall
be a third party beneficiary of the rights and benefits of this Agreement. This
Agreement is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
(c) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to any
applicable conflicts of law.
(d) Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(e) Notices. All notices and other communications required or permitted
hereunder shall be in writing. Notices shall be delivered personally, via
recognized overnight courier (such as Federal Express, DHL or Airborne Express)
or via certified or registered mail. Notices may be delivered via facsimile or
e-mail, provided that by no later than two days thereafter such notice is
confirmed in writing and sent via one of the methods described in the previous
sentence. Notices shall be addressed to the address of each Shareholder as is
set forth on the books and records of the Company, or at such other address or
facsimile number as such Shareholder shall have furnished in writing to the
other parties hereto. All notices shall be effective upon receipt.
(f) Severability Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
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any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction to the greatest extent
possible to carry out the intentions of the parties hereto.
(g) Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such nonbreaching or nondefaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or 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.
(h) Facsimile Signatures. Any signature page delivered by a fax machine
shall be binding to the same extent as an original signature page, with regard
to any agreement subject to the terms hereof or any amendment thereto.
(i) Amendment and Waiver. This Agreement may be amended by the parties
hereto by execution of an instrument in writing signed on behalf of the
Shareholders holding at least seventy five percent of Shares held by all of the
Shareholders and the written consent of the Company as a third-party
beneficiary. Any amendment signed by the Shareholders holding at least seventy
five percent of Shares held by all of the Shareholders shall bind all of the
Shareholders. An action, extension or waiver signed by the Shareholder holding
at least seventy five percent of Shares held by all of the Shareholders shall
bind all of the Shareholders.
8. Shareholder Capacity. No person executing this Agreement who is or
becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his or her capacity as such director or
officer. Each Shareholder signs solely in his, her or its capacity as the record
holder and beneficial owner of, or the trustee of a trust whose beneficiaries
are the beneficial owners of, such Shareholder's Shares and nothing herein shall
limit or affect any actions taken by a Shareholder in its capacity as an officer
or director of the Company to the extent specifically permitted by the Merger
Agreement or as otherwise required by law.
9. Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in a court of the United States. This
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto waives any right to trial by
jury with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
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IN WITNESS WHEREOF, each party hereto has signed this Agreement as of
the date first written above.
PEQUOT PRIVATE EQUITY FUND III, L.P.
By: Pequot Capital Management, Inc.,
its Investment Manager
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chief Financial Officer
Pequot Ventures
PEQUOT OFFSHORE PRIVATE EQUITY
PARTNERS III, L.P.
By: Pequot Capital Management, Inc.,
its Investment Advisor
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chief Financial Officer
Pequot Ventures
CONSTELLATION VENTURE CAPITAL II, L.P.
By: Constellation Ventures Management II,
LLC
Its General Partner
By: /s/ Xxxx Xxxxx
--------------------------------------
Name: Xxxx Xxxxx
Title: Senior Managing Director
Signature Page to Voting Agreement
CONSTELLATION VENTURE CAPITAL
OFFSHORE II, L.P.
By: Constellation Ventures Management II,
LLC
Its General Partner
By: /s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Senior Managing Director
THE BSC EMPLOYEE FUND VI, L.P.
By: Constellation Ventures Management II,
LLC
Its General Partner
By: /s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Senior Managing Director
CVC II PARTNERS, LLC
By: The Bear Xxxxxxx Companies Inc.
Its Managing Member
By: /s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Senior Managing Director
Signature Page to Voting Agreement
SCHEDULE I
---------------------------- ----------------- ----------- --------------- --------------
SHAREHOLDER PREFERRED COMMON WARRANTS PERCENTAGE
STOCK STOCK OF TOTAL
OUTSTANDING
STOCK
---------------------------- ----------------- ----------- --------------- --------------
Pequot Private Equity Fund 10,762,422 0 2,002,349 43.9%
III, L.P.
---------------------------- ----------------- ----------- --------------- --------------
Pequot Offshore Private 1,517,153 0 282,266 6.2%
Equity Partners III, L.P.
---------------------------- ----------------- ----------- --------------- --------------
Constellation Venture 2,330,598 0 460,833 9.5%
Capital II, L.P.
---------------------------- ----------------- ----------- --------------- --------------
Constellation Venture 1,240,235 0 245,234 5.1%
Capital Offshore II, L.P.
---------------------------- ----------------- ----------- --------------- --------------
The BSC Employee Fund VI, 1,039,301 0 205,502 4.2%
L.P.
---------------------------- ----------------- ----------- --------------- --------------
CVC II Partners, LLC 58,200 0 11,508 0.2%
---------------------------- ----------------- ----------- --------------- --------------
TOTAL 16,947,909 0 3,207,692 69.1
---------------------------- ----------------- ----------- --------------- --------------
SCHEDULE II
Required Filings:
-----------------
Filings with the Securities and Exchange Commission pursuant to the requirements
of the Securities and Exchange Act of 1934, as amended.
Other Voting Agreement
----------------------
Amended and Restated Shareholders' Agreement, dated as of August 1, 2005, among
the Company and certain of its shareholders.
Voting Agreement, dated as of August 16, 2005, among the Shareholders.
