EXHIBIT 99.2
VOTING AGREEMENT
This VOTING AGREEMENT (this "Agreement"), dated as of
August 13, 1997, is entered into by and among ELCOTEL, INC., a
Delaware corporation ("Elcotel"); WEXFORD PARTNERS FUND, L.P., a
Delaware limited partnership ("Wexford"); FUNDAMENTAL MANAGEMENT
CORPORATION, a Florida corporation ("Fundamental" and collectively
with Wexford, the "Stockholders"); and the Individual Stockholders
set forth on the signature page hereof. Capitalized terms not
defined herein shall have the meanings assigned to such terms in
the Agreement and Plan of Merger (the "Merger Agreement") dated as
of the date hereof among Elcotel, Technology Service Group, Inc.,
a Delaware corporation ("TSG") and Elcotel Hospitality Service,
Inc., a Delaware corporation ("Merger Subsidiary").
WHEREAS, contemporaneous with the execution and delivery
of this Agreement, Elcotel, TSG and Merger Subsidiary have entered
into the Merger Agreement;
WHEREAS, as a condition and inducement to Elcotel
entering into the Merger Agreement and incurring the obligations
set forth therein and Fundamental entering into this Agreement and
incurring the obligations set forth herein, Wexford has agreed to
vote and to cause to be voted all of the shares of common stock of
TSG, $.01 par value per share (the "TSG Common Stock") now owned
or hereafter acquired by it, for and in favor of the merger of
Merger Subsidiary with and into TSG (the "Merger") and the other
transactions provided for in the Merger Agreement; and
WHEREAS, as a condition and inducement to Wexford
entering into this Agreement and incurring the obligations set
forth herein, Fundamental has agreed to vote and to cause to be
voted all of the shares of common stock of Elcotel, $.01 par value
per share (the "Elcotel Common Stock") now owned or hereafter
acquired by it, for and in favor of the issuance of Elcotel Common
Stock in the Merger.
NOW, THEREFORE, in consideration of the promises and the
respective covenants and agreements set forth herein and in the
Merger Agreement, the parties hereto intending to be legally bound
hereby, agree as follows:
SECTION 1. VOTING OF TSG COMMON STOCK. Wexford hereby
agrees that, during the period commencing on the date hereof and
continuing until the first to occur of (a) the Effective Time of
the Merger or (b) termination of this Agreement in accordance with
its terms, (i) Wexford will not sell or transfer any TSG Common
Stock now owned or hereafter acquired by Wexford (the "Wexford
Shares") or any interest therein to any person, other than an
affiliate of Wexford who shall agree to be bound by the terms of
this Agreement to the same extent as Wexford or other than upon
the exercise by A.T.T. IV, N.V. of the option to purchase up to
142,857 shares of TSG Common Stock owned by Wexford pursuant to
the Stock Purchase and Option Agreement dated as of May 3, 1996
among TSG, Wexford, Firlane Business Corp., Acor, S.A. and A.T.T.
IV, N.V., and (ii) at any meeting (whether annual or special and
whether or not an adjourned or postponed meeting) of the holders
of TSG Common Stock, however called, or in connection with any
written consent of the holders of TSG Common Stock, Wexford will
appear at the meeting or otherwise cause the Wexford Shares to be
counted as present thereat for purposes of establishing a quorum
and vote or consent (or cause to be voted or consented) the
Wexford Shares (A) in favor of the adoption of the Merger
Agreement and the approval of other actions contemplated by the
Merger Agreement and this Agreement and any actions required in
furtherance thereof and hereof; and (B) against 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 TSG under the Merger Agreement or this Agreement.
Wexford shall not enter into any agreement or understanding with
any person the effect of which would be inconsistent with or
violative of any provision contained in this Section 1.
SECTION 2. VOTING OF ELCOTEL COMMON STOCK.
Fundamental hereby agrees that, during the period commencing on
the date hereof and continuing until the first to occur of (a) the
Effective Time of the Merger or (b) termination of this Agreement
in accordance with its terms, (i) Fundamental will not sell or
transfer any Elcotel Common Stock now owned or hereafter acquired
by Fundamental (the "Fundamental Shares") or any interest therein
to any person, other than an affiliate of Fundamental who shall
agree to be bound by the terms of this Agreement to the same
extent as Fundamental, and (ii) at any meeting (whether annual or
special and whether or not an adjourned or postponed meeting) of
the holders of Elcotel Common Stock, however called, or in
connection with any written consent of the holders of Elcotel
Common Stock, Fundamental will appear at the meeting or otherwise
cause the Fundamental Shares to be counted as present thereat for
purposes of establishing a quorum and vote or consent (or cause to
be voted or consented) the Fundamental Shares (A) in favor of the
issuance of Elcotel Common Stock in the Merger and any actions
required in furtherance thereof or in furtherance of the Merger,
and (B) against 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 Elcotel under the Merger
Agreement or this Agreement. Fundamental shall not enter into any
agreement or understanding with any person the effect of which
would be inconsistent with or violative of any provision contained
in this Section 2.
SECTION 3. COVENANTS, REPRESENTATIONS AND WARRANTIES
OF WEXFORD. Wexford hereby represents and warrants to, and agrees
with, Elcotel and Fundamental as follows:
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(a) Ownership of Shares. Wexford is the sole record
and beneficial owner of 2,444,286 shares of TSG Common Stock. On
the date hereof, such Wexford Shares constitute all of the shares
of TSG Common Stock owned of record or beneficially owned by
Wexford. Wexford has sole voting power and sole power to issue
instructions with respect to the matters set forth in Section 1
hereof, sole power of disposition, and sole power to agree to all
of the matters set forth in this Agreement, in each case with
respect to all of such Wexford Shares with no limitations,
qualifications or restrictions on such rights, subject to
applicable securities laws, and the terms of this Agreement.
(b) Authorization. This Agreement has been duly and
validly executed and delivered by Wexford and constitutes a valid
and binding agreement enforceable against Wexford in accordance
with its terms except (i) as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors rights
and (ii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) No Conflicts. Except for filings, authorizations,
consents and approvals as may be required under the XXX Xxx, xxx
0000 Xxx xxx xxx 0000 Xxx, (x) no filing with, and no permit,
authorization, consent or approval of, any state or federal
Governmental Authority is necessary for the execution of this
Agreement by Wexford and the consummation by Wexford of the
transactions contemplated hereby and (ii) none of the execution
and delivery of this Agreement by Wexford, the consummation by
Wexford of the transactions contemplated hereby or compliance by
Wexford with any of the provisions hereof will (A) conflict with
or result in any breach of the organizational documents of
Wexford, (B) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms,
conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any
kind to which Wexford is a party or by which Wexford or any of its
properties or assets may be bound, or (C) violate any order, writ,
injunction, decree, judgment, statute, rule or regulation
applicable to Wexford or any of its properties or assets.
(d) No Encumbrances. Except as applicable in
connection with the transactions contemplated by Section 1 hereof,
the Wexford Shares at all times during the term hereof, will be,
beneficially owned by Wexford and affiliates thereof referred to
in Section 1 of this Agreement, free and clear of all liens,
claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances
whatsoever, except for any such matters arising hereunder.
(e) No Finder's Fees. Except as set forth in the
Merger Agreement, no broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with
the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Wexford.
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(f) Restriction on Transfer, Proxies and
Non-Interference. Wexford will not, directly or indirectly, at
any time prior to the termination of this Agreement, (i) except as
permitted by Section 1(i) above, offer for sale, sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding
with respect to or consent to the offer for sale, sale, transfer,
tender, pledge, encumbrance, assignment or other disposition of,
any or all of the Wexford Shares or any interest therein; (ii)
grant any proxies or powers or attorney, deposit the Wexford
Shares into a voting trust or enter into a voting agreement with
respect to the Wexford Shares (other than this Agreement); or
(iii) take any action that would make any representation or
warranty of Wexford contained herein untrue or incorrect or would
result in a breach by Wexford of its obligations under this
Agreement.
(g) Adequate Information. Elcotel has made available
and Wexford has reviewed such information which Wexford considers
necessary or appropriate to evaluate the risks and merits of an
investment in the Elcotel Common Stock (including without
limitation, the Merger Agreement, including the Exhibits and
Schedules thereto). Wexford has had the opportunity to question,
and has questioned, to the extent deemed necessary or appropriate,
representatives of Elcotel so as to receive answers and verify
information obtained in its examination of Elcotel, including the
information referred to in this paragraph and any other documents
or information that Wexford has reviewed in relation to its
proposed investment in Elcotel Common Stock pursuant to the
Merger. No oral or written representations have been made to
Wexford in connection with Wexford's proposed acquisition of
Elcotel Common Stock which were in any way inconsistent with the
information reviewed by Wexford.
(h) Independent Decision. Wexford is not relying on
Elcotel with respect to the tax considerations of Wexford relating
to Wexford's proposed investment in the Elcotel Common Stock.
Wexford has relied solely on the representations, warranties,
covenants and agreements of Elcotel in the Merger Agreement
(including the Exhibits and Schedules thereto) and on Wexford's
examination and independent investigation, and on the answers and
information supplied pursuant to paragraph (g) above, in making
its decision to acquire Elcotel Common Stock.
SECTION 4. COVENANTS, REPRESENTATIONS AND WARRANTIES
OF FUNDAMENTAL. Fundamental hereby represents and warrants to,
and agrees with, Wexford as follows:
(a) Ownership of Shares. Fundamental is the sole
record and beneficial owner of 1,439,223 shares of Elcotel Common
Stock. On the date hereof, such Fundamental Shares constitute all
of the shares of Elcotel Common Stock owned of record or
beneficially owned by Fundamental. Fundamental has sole voting
power and sole power to issue instructions with respect to the
matters set forth in Section 2 hereof, sole power of disposition,
and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of such Fundamental
Shares with no limitations, qualifications or restrictions on such
rights, subject to applicable securities laws, and the terms of
this Agreement.
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(b) Corporate Authorization. This Agreement has been
duly and validly executed and delivered by Fundamental and
constitutes a valid and binding agreement enforceable against
Fundamental in accordance with its terms except (i) as may be
limited by applicable bankruptcy, insolvency or similar laws
affecting creditors rights and (ii) that the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(c) No Conflicts. Except for filings, authorizations,
consents and approvals as may be required under the XXX Xxx, xxx
0000 Xxx xxx xxx 0000 Xxx, (x) no filing with, and no permit,
authorization, consent or approval of, any state or federal
Governmental Authority is necessary for the execution of this
Agreement by Fundamental and the consummation by Fundamental of
the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by Fundamental, the
consummation by Fundamental of the transactions contemplated
hereby or compliance by Fundamental with any of the provisions
hereof will (A) conflict with or result in any breach of the
organizational documents of Fundamental, (B) result in a violation
or breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, loan
agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which Fundamental is a
party or by which Fundamental or any of its properties or assets
may be bound, or (C) violate any order, writ, injunction, decree,
judgment, statute, rule or regulation applicable to Fundamental or
any of its properties or assets.
(d) No Encumbrances. Except as applicable in
connection with the transactions contemplated by Section 2 hereof,
the Fundamental Shares at all times during the term hereof, will
be, beneficially owned by Fundamental and affiliates thereof
referred to in Section 2 of this Agreement, free and clear of all
liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such matters arising
hereunder.
(e) No Finder's Fees. Except as set forth in the
Merger Agreement, no broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with
the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Fundamental.
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(f) Restriction on Transfer, Proxies and
Non-Interference. Fundamental will not, directly or indirectly,
at any time prior to the termination of this Agreement, (i) except
as permitted by Section 2(i) above, offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale,
sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, any or all of the Fundamental Shares or any
interest therein; (ii) grant any proxies or powers of attorney,
deposit the Fundamental Shares into a voting trust or enter into a
voting agreement with respect to the Fundamental Shares (other
than this Agreement); or (iii) take any action that would make any
representation or warranty of Fundamental contained herein untrue
or incorrect or would result in a breach by Fundamental of its
obligations under this Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF ELCOTEL.
Elcotel hereby represents and warrants to Wexford as follows:
(a) Organization. Elcotel is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware and has all requisite corporate power and
authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery by Elcotel of
this Agreement and the performance by Elcotel of its obligations
hereunder have been duly and validly authorized by the Board of
Directors of Elcotel and no other corporate proceedings on the
part of Elcotel are necessary to authorize the execution, delivery
or performance of this Agreement or the consummation of the
transactions contemplated hereby by Elcotel.
(b) Corporate Authorization. This Agreement has been
duly and validly executed and delivered by Elcotel and constitutes
a valid and binding agreement of Elcotel enforceable against
Elcotel in accordance with its terms, except (i) as may be limited
by applicable bankruptcy, insolvency or similar laws affecting
creditors rights and (ii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(c) No Conflicts. Except for filings, authorizations,
consents and approvals as may be required under the XXX Xxx, xxx
0000 Xxx xxx xxx 0000 Xxx, (x) no filing with, and no permit,
authorization, consent or approval of, any state or federal
Governmental Authority is necessary for the execution of this
Agreement by Elcotel and the consummation by Elcotel of the
transactions contemplated hereby and ( ii) none of the execution
and delivery of this Agreement by Elcotel, the consummation by
Elcotel of the transactions contemplated hereby or compliance by
Elcotel with any of the provisions hereof will (A) conflict with
or result in any breach of the certificate of incorporation or
by-laws of Elcotel, (B) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, loan agreement,
bond, mortgage, indenture, license, contract, commitment,
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arrangement, understanding, agreement or other instrument or
obligation of any kind to which Elcotel is a party or by which
Elcotel or any of its properties or assets may be bound, or (C)
violate any order, writ, injunction, decree, judgment, statute,
rule or regulation applicable to Elcotel or any of its properties
or assets.
SECTION 6. AFFILIATE'S LETTER. Wexford will duly
execute and deliver to Elcotel an Affiliate's Letter prior to the
Effective Time.
SECTION 7. TERMINATION. This Agreement will terminate
upon the earlier of (i) the consummation of the Merger and (ii)
the termination of the Merger Agreement in accordance with its
terms.
SECTION 8. MISCELLANEOUS.
(a) Entire Agreement. This Agreement constitutes the
entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with
respect to the subject matter hereof.
(b) Survival of Representations and Warranties. The
representations and warranties of the parties hereto contained in
Sections 3, 4 and 5 of this Agreement shall survive the Closing.
(c) Assignments; Rights of Assignees; Third Party
Beneficiaries. This Agreement shall not be assignable by any
party hereto without the consent of the other parties. This
Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties hereto and their estates, legal
representatives, successors and permitted assigns. Nothing
expressed or referred to in this Agreement is intended or shall be
construed to give any person other than the parties to this
Agreement or their respective estates, legal representatives
and/or successors or permitted assigns any legal or equitable
right, remedy or claim under or in respect of this Agreement or
any provision contained herein.
(d) Specific Performance. The parties hereto
acknowledge that money damages are an inadequate remedy for breach
of this Agreement because of the difficulty of ascertaining the
amount of damage that will be suffered by the non-breaching party
or parties in the event that this Agreement is breached.
Therefore, each of the Stockholders agrees that the non-breaching
party or parties may obtain specific performance of this Agreement
and injunctive relief against any breach hereof without the
necessity of establishing irreparable harm.
(e) Waiver. No waiver of any provision of this
Agreement shall be effective unless it is in writing signed by the
party granting the waiver, and a waiver by any party hereto of any
one or more defaults shall not operate as a waiver of any future
default or defaults, whether of a like or of a different
character. No waiver of any of the provisions of this Agreement
shall constitute a waiver of any other provisions (whether or not
similar), nor shall such a waiver constitute a continuing waiver,
unless otherwise expressly provided.
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(f) Section Headings. Headings contained in this
Agreement are inserted only as a matter of convenience and in no
way define, limit, or extend the scope or intent of this Agreement
or any provisions thereof.
(g) Choice of Law. This Agreement will be governed by
and construed and enforced in accordance with the laws of the
State of Delaware (without regard to the principles of conflicts
of law) applicable to a contract executed and to be performed in
such state. Each party hereto (i) agrees to submit to personal
jurisdiction and to waive any objection as to venue in the state
or federal courts located in the State of Delaware, (ii) agrees
that any action or proceeding shall be brought exclusively in such
courts, unless subject matter jurisdiction or personal
jurisdiction cannot be obtained, and (iii) agrees that service of
process on any party in any such action shall be effective if made
by registered or certified mail addressed to such party at the
address specified herein, or to any parties hereto at such other
addresses as it may from time to time specify to the other parties
in writing for such purpose. The exclusive choice of forum set
forth in this Section 8(g) shall not be deemed to preclude the
enforcement of any judgment obtained in such forum or the taking
of any action under this Agreement to enforce such judgment in any
appropriate jurisdiction.
(h) Notices. All notices, requests and other
communications to any party hereunder shall be in writing and will
be deemed to have been duly given only if delivered personally or
by facsimile transmission or mailed (first class mail postage
prepaid), or by overnight express courier (charges prepaid or
billed to the account of the sender) to the parties at the
following addresses or facsimile numbers:
If to Elcotel, to: Elcotel, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxx Xxxxx
with a copy to: Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
Suite 3600
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esquire
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If to Wexford, to: Wexford Partners Fund, L.P.
000 X. Xxxxxx Xxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxxx
If to Fundamental, to: Fundamental Management Corporation
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000X
Xxxxxxxxx, Xxxxxxx 00000
Fax:
Attention: C. Xxxxxxx Xxxxx
or to such other address or fax number as any party may have
furnished to the others in writing in accordance herewith.
(i) Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same document.
(j) Severability of Provisions. If any term,
provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall not in any way be affected, impaired or
invalidated.
SECTION 9. EFFECTIVENESS. This Agreement shall become
effective simultaneously with the execution and delivery of the
Merger Agreement.
SECTION 10. THE INDIVIDUAL STOCKHOLDERS. The persons
executing this Agreement under the caption "Individual
Stockholders" on the signature page hereof are executing this
Agreement solely so that this Agreement will constitute a
"stockholders' agreement" within the meaning of Section 218(c) of
the Delaware General Corporation Law and will not have any rights
or obligations hereunder except, with respect to the TSG
Individual Stockholder, the obligation to vote his TSG Common
Stock in accordance with Section 1(A) and (B) and, with respect to
the Elcotel Individual Stockholder, the obligation to vote his
Elcotel Common Stock in accordance with Section 2(A) and (B).
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
INDIVIDUAL STOCKHOLDERS: ELCOTEL, INC.
TSG INDIVIDUAL
STOCKHOLDER
By: /s/
-------------------------
Name: Xxxxxx X. Xxxx
/s/ Title: President
-------------------------
Xxxxxxx Xxxxxxxxx
ELCOTEL INDIVIDUAL WEXFORD PARTNERS FUND, L.P.
STOCKHOLDER By: Wexford Management LLC
Its Investment Manager
By: /s/
-------------------------
/s/ Name: Xxxxxx X. Xxxxxxxx III
------------------------- Title: Vice President
C. Xxxxxxx Xxxxx
FUNDAMENTAL MANAGEMENT
CORPORATION
By: /s/
-------------------------
Name: C. Xxxxxxx Xxxxx
Title: President
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