EXHIBIT 99.1
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement"), dated as of December 6,
2004, is by and among the persons listed on Schedule I hereto (each a
"Shareholder", and, collectively, the "Shareholders").
WHEREAS, Pequot Private Equity Fund III, L.P. and Pequot Offshore Private
Equity Partners III, L.P. (collectively, "Pequot"), Constellation Venture
Capital II, L.P. and Constellation Venture Capital Offshore, II, L.P., The BSC
Employee Fund, VI, L.P. and CVC II Partners, LLC (collectively, "Constellation"
and together with Pequot, the "Investor Shareholders") and MTM Technologies,
Inc., a New York corporation (the "Company") propose to enter into a Purchase
Agreement of even date herewith (the "Purchase Agreement") providing for the
purchase by the Investor Shareholders of certain secured subordinated
convertible promissory notes of the Company (the "Notes") and certain warrants
to purchase Common Stock, $.001 par value per share, of the Company (the "Common
Stock") (the transactions contemplated by the Purchase Agreement, including
without limitation the issuance of securities thereunder and the amendment or
amendment and restatement of the Company's Certificate of Incorporation, the
"Transactions");
WHEREAS, as a condition to the execution and delivery of the Purchase
Agreement, the Investor Shareholders have requested that the Shareholders enter
into this Agreement;
WHEREAS, the Shareholders believe that the execution, delivery and
performance of the Purchase Agreement and the consummation of the transactions
contemplated thereby is in the best interests of the Company and its
shareholders; and
WHEREAS, 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 Common Stock of the Company set forth opposite such Shareholder's
name on Schedule I hereto (such shares of Common Stock, as such shares may be
adjusted by stock dividend, stock split, recapitalization, combination or
exchange of shares, merger, consolidation, reorganization or other change or
transaction, together with shares of Common Stock that may be acquired after the
date hereof by such Shareholder, including shares of Common Stock issued upon
the exercise of options or warrants to purchase Common Stock (as the same may be
adjusted as aforesaid), being 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. 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. The Shareholder owns of record or beneficially no Common Stock or other
voting interest in the Company other than such Shareholder's Shares and shares
of Company Common Stock issuable upon the exercise of options and warrants, in
each case as set forth on Schedule I hereto.
(c) Purchase Agreement. Each Shareholder understands and acknowledges that
the Investor Shareholders are entering into the Purchase Agreement in reliance
upon such Shareholder's execution and delivery of this Agreement.
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, this Agreement, the Purchase Agreement
and the transactions contemplated hereby and thereby.
3. Agreements of All Shareholders. Each Shareholder, severally and not
jointly, agrees as follows:
2
(a) Until the Transactions are consummated or the Purchase Agreement is
terminated in accordance with its terms, the Shareholder shall not, (i) except
as otherwise expressly provided herein, sell, transfer, pledge, assign or
otherwise dispose of, or enter into any contract, option or other arrangement
(including any profit sharing arrangement) or understanding with respect to the
sale, transfer, pledge, assignment or other disposition of, the Shares to any
person, (ii) 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 (iii) 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 and the Purchase Agreement 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 and the Purchase Agreement or
which is necessary to consummate the Transactions or for the Company to perform
its obligations under the Purchase Agreement 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 and
the adoption by the Company of the Purchase Agreement.
(c) The Shareholders understand and acknowledge that the Investor
Shareholders are entering into the Purchase Agreement in reliance upon the
agreements of the Shareholders herein.
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 Transaction, the adoption by
the Company of the Purchase Agreement and the approval of the other transactions
contemplated by the Purchase Agreement; including, without limitation, the
authorization and issuance of (or the conversion of the Notes into) the New
Series A Preferred Stock, the exercise of the Series A-4 Warrants and the
issuance of any Common Stock issuable upon conversion or exercise of the
foregoing.
(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
3
further affirms that the irrevocable proxy is given in connection with the
execution of the Purchase Agreement, and that such irrevocable proxy is given to
secure the performance of the duties of such Shareholder under this Agreement.
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. Transfers of Shares. During the term of this Agreement, no Shareholder
shall Transfer any Shares unless the Person receiving Transfer of such Shares
executes an Instrument of Accession in the form attached hereto as Exhibit A
agreeing to be bound by the terms of this Agreement. As used herein, "Transfer"
shall mean and include any sale, assignment, encumbrance, hypothecation, pledge,
conveyance in trust, gift, transfer by request, devise or descent, or other
transfer or disposition of any kind, including, but not limited to, transfers to
receivers, levying creditors, trustees or receivers in bankruptcy proceedings or
general assignees for the benefit of creditors, whether voluntary or by
operation of law, directly or indirectly, of any of the Shares.
6. 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 or the Investor Shareholders may reasonably request for the purpose of
effectively carrying out the transactions contemplated by this Agreement and to
vest the power to vote such Shareholder's Shares as contemplated by Section 4.
7. Termination. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate upon the earlier of (i) Shareholder Approval
or (ii) payment in full or conversion of the Notes in accordance with their
terms. Notwithstanding the foregoing, the rights and obligations of Xxxxxx
Xxxxxx and Xxxxxx Xxxxxxx hereunder shall terminate, solely with respect to
Shares Transferred in accordance with and subject to the terms and conditions of
the Other Voting Agreement listed on Schedule II hereto, at the time of the
Transfer of such Shares. Nothing in this Section 7 shall relieve any Shareholder
from liability for willful breach of this Agreement.
8. 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) Definitions. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Purchase Agreement.
(c) 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
4
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 and the Investor Shareholders any rights or remedies hereunder.
(d) 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.
(e) 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.
(f) 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.
(g) 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
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.
(h) 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.
(i) 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.
5
(j) 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 a majority 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 a majority of Shares held by all of the
Shareholders shall bind all of the Shareholders. Any action, extension or waiver
by any party of any provision hereto shall be valid only if set forth in an
instrument in writing signed on behalf of such party. An action, extension or
waiver signed by the Shareholder holding a majority of Shares held by all of the
Shareholders shall bind all of the Shareholders. Notwithstanding anything
contained in this Section 8(j) to the contrary, if any amendment to this
Agreement adversely affects the rights of Xxxxxx Xxxxxx or Xxxxxx Xxxxxxx
hereunder, the written agreement of Xxxxxx Xxxxxx and Xxxxxx Xxxxxxx shall be
required prior to any such amendment.
9. 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 Purchase
Agreement or as otherwise required by law.
10. 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.
11. Notification Requirement. Each Shareholder hereby agrees, while this
Agreement is in effect, to promptly notify the Company of the number of Shares
acquired by such Shareholder, if any, after the date hereof.
6
Signature Page to Voting Agreement
IN WITNESS WHEREOF, each party hereto has signed this Agreement as of
the date first written above.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Xxxxxx Xxxxxx
PEQUOT PRIVATE EQUITY FUND III, L.P.
By: Pequot Capital Management, Inc.,
Its Investment Manager
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: General Counsel
PEQUOT OFFSHORE PRIVATE EQUITY
PARTNERS III, L.P.
By: Pequot Capital Management, Inc.,
Its Investment Manager
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: General Counsel
CONSTELLATION VENTURE CAPITAL II, L.P.
By: Constellation Ventures
Management II, LLC
Its General Partner
By: /s/ Xxxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Senior Managing Director
Signature Page to Shareholders' Agreement
CONSTELLATION VENTURE CAPITAL
OFFSHORE II, L.P.
By: Constellation Ventures Management
II, LLC
Its General Partner
By: /s/ Xxxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Senior Managing Director
THE BSC EMPLOYEE FUND VI, L.P.
By: Constellation Ventures
Management II, LLC
Its General Partner
By: /s/ Xxxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Senior Managing Director
CVC II PARTNERS, LLC
By: The Bear Xxxxxxx Companies Inc.
Its Managing Member
By: /s/ Xxxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Senior Managing Director
Signature Page to Shareholders' Agreement
SCHEDULE I
----------
--------------------------------------- -------------- -----------------
SHAREHOLDER COMMON STOCK PREFERRED STOCK
--------------------------------------- -------------- -----------------
Xxxxxx Xxxxxxx 785,361
--------------------------------------- -------------- -----------------
Xxxxxx Xxxxxx 780,456
--------------------------------------- -------------- -----------------
Pequot Private Equity Fund III, L.P. 6,291,932
--------------------------------------- -------------- -----------------
Pequot Offshore Private Equity 886,959
Partners III, L.P.
--------------------------------------- -------------- -----------------
Constellation Venture Capital II, L.P. 960,068
--------------------------------------- -------------- -----------------
Constellation Venture Capital 510,903
Offshore II, L.P.
--------------------------------------- -------------- -----------------
The BSC Employee Fund VI, L.P. 428,131
--------------------------------------- -------------- -----------------
CVC II Partners, LLC 23,975
--------------------------------------- -------------- -----------------
TOTAL 1,565,817 9,101,968
--------------------------------------- -------------- -----------------
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
----------------------
Shareholders' Agreement dated as of May 21, 2004, as amended from time to time,
among the Company and certain of its shareholders.
Exhibit A
---------
Form of Instrument of Accession
-------------------------------
Instrument of Accession
-----------------------
Reference is made to that certain Voting Agreement dated as of December
___, 2004, a copy of which attached hereto (as amended and in effect from time
to time, the "Voting Agreement"), among the Shareholders (as defined therein).
The undersigned, ____________________________________, in order to become
the owner or holder of [identify Securities being Transferred] (the
"Securities") of MTM Technologies, Inc., a New York corporation (the "Company")
hereby agrees that by his, her or its execution hereof the undersigned is a
Shareholder party to the Voting Agreement subject to all of the restrictions and
conditions applicable to Shareholders set forth in such Voting Agreement, and
all of the Shares purchased by the undersigned in connection herewith (and any
and all debt and equity of the Company issued in respect hereof) are subject to
all the restrictions and conditions applicable to such Shares as set forth in
the Voting Agreement. This Instrument of Accession shall take effect and shall
become a part of said Voting Agreement immediately upon execution.
Executed as of the date set forth below under the laws of the State of New
York.
Signature
-----------------------------------------
Address
-----------------------------------------
-----------------------------------------
-----------------------------------------
Date:
--------------------
