EXHIBIT 99.3
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
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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:
(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
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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.
(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
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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.
(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.
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(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.
(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, 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.
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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.
(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
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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
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
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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).
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/ Xxxxxx X. Xxxx
------------------------------
Name: Xxxxxx X. Xxxx
/s/ Xxxxxxx X. Xxxxxxxxx Title: President
---------------------------
Xxxxxxx Xxxxxxxxx
ELCOTEL INDIVIDUAL WEXFORD PARTNERS FUND, L.P.
STOCKHOLDER By: Wexford Management LLC
Its Investment Manager
By: /s/ Xxxxxx X. Xxxxxxxx III
------------------------------
/s/ C. Xxxxxxx Xxxxx Name: Xxxxxx X. Xxxxxxxx III
--------------------------- Title: Vice President
C. Xxxxxxx Xxxxx
FUNDAMENTAL MANAGEMENT
CORPORATION
By: /s/ C. Xxxxxxx Xxxxx
------------------------------
Name: C. Xxxxxxx Xxxxx
Title: President
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