AMENDED AND RESTATED VOTING AGREEMENT
Exhibit
10.4
AMENDED
AND RESTATED VOTING AGREEMENT
This
Amended and Restated Voting Agreement, dated as of December 29, 2006 (this
“Agreement”),
is by
and among New World Brands, Inc., a Delaware corporation (the “Company”),
Qualmax, Inc., a Delaware corporation (“Qualmax”),
P&S Spirit, LLC, a Nevada limited liability company (“P&S”), Xxxxxx and
Xxxxxx Xxxxxx, TBTE (“TBTE”),
Oregon Spirit, LLC, a Nevada limited liability company (“Oregon
Spirit”),
and,
solely for purposes of Section
21
hereof,
M. Xxxxx Xxxxxx, an individual (“X.
Xxxxxx”),
Xxxx
Xxxxxx, an individual (“X.
Xxxxxx”),
Xxxx
Xxxxxx, an individual (“X.
Xxxxxx”),
Xxxxx
Xxxxxxxx, an individual (“X.
Xxxxxxxx”
and
together with X. Xxxxxx, X. Xxxxxx and X. Xxxxxx the “Kamrat
Family”,
and
the Kamrat Family and Qualmax together the “Qualmax
Holders”).
Each
of Qualmax, P&S, TBTE and Oregon Spirit are herein referred to as a
“Voting
Stockholder,”
and
together as the “Voting
Stockholders.”
Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Subscription Agreement (as defined
below).
RECITALS
In
connection with the purchase by Qualmax of 100 shares of Series A Preferred
Stock, par value $0.01 per share, of the Company (“Series
A Preferred Stock”),
pursuant to the Asset Purchase Agreement, dated as of June 22, 2006, as amended
by Amendment No. 1 to Asset Purchase Agreement, dated as of August 28, 2006
by
and between the Company and Qualmax, the parties entered into a Voting Agreement
dated as of September 15, 2006 (the “Original
Agreement”),
whereby the parties agreed to, among other things, nominate (or cause or
facilitate the nomination) for election as directors certain persons designated
by each of Qualmax and Xxxxxx Xxxxxx.
In
connection with the purchase by P&S
of
shares
of the Company’s Series A Preferred Stock pursuant to the terms of a Stock
Subscription Agreement of even date herewith (the “Subscription
Agreement”),
P&S intends
to purchase shares of Series A Preferred Stock and/or Common Stock, in separate
tranches. Capitalized terms used in this Agreement that are not defined shall
have the meanings assigned to such terms in the Subscription Agreement, which
definitions are hereby incorporated by reference.
In
connection with consummation of the transactions contemplated by the
Subscription Agreement, the parties desire to amend and restate the Original
Agreement in its entirety to nominate (or cause or facilitate the nomination)
for election as directors certain persons designated by each of Qualmax and
P&S.
The
parties hereto deem it in their best interests and in the best interests of
the
Company to establish the composition of the Company’s board of directors (the
“Board”)
and
certain other arrangements as hereinafter provided.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the parties hereto hereby agree as
follows:
1. Board
of Directors.
The
parties hereto confirm that it is their intention that the business and affairs
of the Company shall be managed by the Board. The authorized number of directors
on the Board shall hereby be fixed at five (5). Effective upon the receipt
of
the requisite approval by the stockholders of the Company of an Amended and
Restated Certificate of Incorporation of the Company which, among other things,
establishes a staggered board of directors (the “Revised
Charter”),
and
the filing by the Company of the Revised Charter with the Secretary of State
of
the State of Delaware (the “Filing”),
the
directors shall be divided into three classes, as nearly equal in number as
possible, with the term of office of the first class (“Class
I”)
to
expire at the 2007 annual meeting of stockholders, the term of office of the
second class (“Class
II”)
to
expire at the 2008 annual meeting of stockholders, and the term of office of
the
third class (“Class
III”)
to
expire at the 2009 annual meeting of stockholders. At each annual meeting of
stockholders following such initial classification and election, directors
elected to succeed those directors whose terms expire shall be elected for
a
three-year term of office and until the election and qualification of their
respective successors in office. Subject to the terms and provisions set forth
herein, each Voting Stockholder shall vote or cause to be voted all shares
of
Voting Stock of the Company owned, beneficially or of record, by such party
at
any meeting of the Voting Stockholders of the Company at which directors are
to
be elected to the Board, or in any written consent executed in lieu of such
a
meeting of the Voting Stockholders, and shall take all other necessary or
desirable action, in order to ensure that the Board is constituted as set forth
in this Agreement. As used herein, the term “Voting
Stock”
shall
mean Common Stock, Preferred Stock, and any other capital stock of the Company
which carries voting rights, and shall include any shares of Voting Stock now
owned or subsequently acquired by a Voting Stockholder, however acquired,
including, without limitation, stock splits and stock dividends.
2. Nominations
of Directors.
(a) Qualmax
shall be entitled to designate two (2) individuals (the “Qualmax
Nominees”)
to
serve as directors effective upon the Tranche A Closing, which Qualmax Nominees
shall initially be M. Xxxxx Xxxxxx and Xxxx Xxxxxx. Effective upon the Filing,
one of the Qualmax Nominees shall serve as a Class II director and one shall
serve as Class III
director.
Effective upon the Filing, Xxxx Xxxxxx shall be a Class II director and M.
Xxxxx
Xxxxxx
shall
be
a Class III director. Xxx Xxxx shall resign as a director immediately following
execution of this Agreement.
(b) P&S
shall be entitled to designate two (2) individuals (the “P&S
Nominees”)
to
serve as directors effective upon the Tranche A Closing, which P&S
Nominees
shall initially be Xxxxx Xxxxxx and
a
second P&S Nominee to be designated by P&S. Effective upon the Filing,
one of the P&S
Nominees
shall serve as a Class II director and one shall serve as Class III director.
Effective upon the Filing, the second P&S Nominee shall
be
a Class II director and Xxxxx Xxxxxx shall be a Class III director. Until the
second P&S Nominee is elected the second P&S Nominee’s board seat shall
remain vacant.
(c) Qualmax
and P&S shall
jointly be entitled to designate one (1) individual (the “Joint
Nominee”)
to
serve as a director effective upon the Tranche A Closing, which Joint Nominee
shall be designated jointly by Qualmax and P&S. Effective upon the Filing,
the Joint Nominee shall be a Class I director. Until the Joint Nominee is
elected the Joint Nominee’s board seat shall remain vacant.
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(d) Pursuant
to Section
3
hereof,
the Qualmax Nominees, the P&S
Nominees
and the Joint Nominee so designated shall be elected by the Voting Stockholders
(provided that such nominees remain willing to serve) such that the Qualmax
Nominees, the P&S
Nominees
and one Joint Nominee shall serve on the Board until the 2009 annual meeting
of
stockholders (and in the Classes specified herein upon the Filing).
(e) If,
prior
to an individual’s election to the Board, any individual designated to serve as
a director shall be unable or unwilling to serve as a director, the group who
designated any such individual to serve as a director pursuant to the provisions
of this Section
2
shall be
entitled to designate a replacement in accordance with the provisions of this
Section
2
who
shall then be elected a director.
(f) No
Voting
Stockholder, nor any affiliate of any such Voting Stockholder, shall have any
liability as a result of designating a person for election as a director for
any
act or omission by such designated person in his or her capacity as a director
of the Company, nor shall any Voting Stockholder have any liability as a result
of voting for any such designee in accordance with the provisions of this
Agreement.
3. Covenant
to Vote; No Conflicting Agreements.
(a) Each
Voting Stockholder shall take all necessary or desirable action necessary to
call, or to cause the Company and the appropriate officers and directors of
the
Company to call, a meeting of the Voting Stockholders of the Company and to
vote
or cause to be voted all shares of Voting Stock of the Company owned,
beneficially or of record, by such party at any such meeting in favor of, or
take all necessary or desirable action by written consent in lieu of any such
meeting, to cause the election and re-election (provided they remain willing
to
serve) as members of the Board of those individuals designated in accordance
with Section
2
of this
Agreement. In addition, each Voting Stockholder agrees to vote or cause to
be
voted all shares of Voting Stock of the Company owned, beneficially or of
record, by such party upon any other matter arising under this Agreement
submitted to a vote of the Voting Stockholders of the Company in such a manner
as to implement the terms of, or otherwise effect the intent of, this Agreement.
The voting of Voting Stock pursuant to this Agreement may be effected in person,
by proxy, by written consent, or in any other manner permitted by the laws
of
the State of Delaware.
(b) No
Voting
Stockholder shall (i) enter into or agree to be bound by any voting trust,
(ii)
enter into any stockholder agreement or arrangement of any kind with any person
or entity, or (iii) take any action, either alone or in concert with any other
persons or entities, in each of the foregoing cases which would be inconsistent
in any manner with the provisions of this Agreement.
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4. Removal.
Notwithstanding anything to the contrary contained in the Company’s certificate
of incorporation or by-laws (as the same may each be amended and/or restated
from time to time), on all matters relating to the removal of directors of
the
Company, each Voting Stockholder shall vote or cause to be voted all shares
of
Voting Stock of the Company owned, beneficially or of record, by such party,
to
ensure that no director of the Company may be removed from the Board except
(a)
for cause, (b) with respect to the removal of any Qualmax Nominee designated
pursuant to Section
2(a)
hereof,
upon the prior vote or written consent of Qualmax, (c) with respect to the
removal of any P&S
Nominee
designated pursuant to Section
2(b)
hereof,
upon the prior vote or written consent of P&S, or (d) with respect to the
removal of the Joint Nominee designated pursuant to Section
2(c)
hereof,
upon the prior vote or written consent of Qualmax and P&S.
Any
vacancy created by the operation of this Section
4
shall be
filled in accordance with Section
5
hereof.
5. Vacancies.
Notwithstanding anything to the contrary contained in the Company’s certificate
of incorporation or by-laws (as the same may each be amended and/or restated
from time to time), in the event that a vacancy is created on the Board at
any
time by the death, disability, retirement, resignation or removal of a director,
the individual to fill such vacancy shall be nominated by the group entitled
to
fill such directorship in accordance with the provisions of Section
2
hereof.
Each Voting Stockholder shall vote or cause to be voted all shares of Voting
Stock of the Company owned, beneficially or of record, by such party at any
meeting of the Voting Stockholders of the Company called for the purpose of
filling such vacancy, or in any written consent executed in lieu of such a
meeting of the Voting Stockholders, and shall take all other necessary or
desirable actions, to ensure the election to the Board of the individual
designated to fill such vacancy pursuant to this Section
5.
6. Board
Observer.
During
the term hereof a designee of P&S, appointed by P&S in writing and
identified by written notice to the Company, shall have the right to attend
and
observe, but not to vote at, all annual and special meetings of the
Board.
7. Representations
and Warranties.
Each
Voting Stockholder represents and warrants to the other parties hereto,
severally and not jointly, as to itself only, that:
(a) such
party has full power and capacity to execute, deliver and perform this
Agreement, and this Agreement has been duly and validly authorized, executed
and
delivered by such party and constitutes a legal and binding obligation of such
party, enforceable against such party in accordance with its terms;
(b) such
party has not, prior to the date of this Agreement, executed or delivered any
proxy or entered into any voting agreement or similar arrangement relating
to
its or his Voting Stock (except for any such agreements among the parties
hereto); and
(c) the
execution, delivery and performance by such party of this Agreement and the
consummation by such party of the transactions contemplated hereunder will
not,
with or without the giving of notice or lapse of time, (i) violate any provision
of law, statute, rule or regulation to which such party is subject, (ii) violate
any order, judgement or decree applicable to
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such
party, or (iii) conflict with, or result in a breach or default under, any
material term or condition of any material agreement or other material
instrument to which such party is a party or by which such party is
bound.
8. Stock
Certificates. If
so
requested by the Company, the Voting Stockholders agree that each certificate
representing shares of Voting Stock owned by the Voting Stockholders shall
bear
the following legend on the face or reverse side thereof:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VOTING RESTRICTIONS
PURSUANT TO A CERTAIN AMENDED AND RESTATED VOTING AGREEMENT BY AND AMONG NEW
WORLD BRANDS, INC. (THE “COMPANY”), QUALMAX, INC., AND CERTAIN STOCKHOLDERS OF
THE COMPANY, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES
OF
THE COMPANY AND MAY BE OBTAINED UPON WRITTEN REQUEST TO THE COMPANY.”
9. Specific
Performance.
Each
party acknowledges and agrees that in the event of any breach of this Agreement,
the non-breaching party or parties may be irreparably harmed and may not be
made
whole by monetary damages. The parties hereby agree that, in addition to and
without prejudice to any other remedy to which they may be entitled at law
or in
equity, they shall be entitled to compel specific performance of this Agreement
and injunctive and other equitable relief, and the parties hereto further agree
to waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such injunctive or other equitable
relief.
10. Amendment. This
Agreement may only be amended or modified with the written consent of each
of
the Voting Stockholders.
11. Subsequent
Transferees.
Except
in the case of (a) a pro rata distribution of all of the Voting Stock held
by
Qualmax to the stockholders of Qualmax, whether by way of a downstream merger
of
Qualmax into New World or otherwise (a “Distribution”),
which
shall be governed by Section
21
hereof,
and (b) sales of Voting Stock into the public marketplace (subject to the terms
of that certain Lock-Up Agreement dated of even date herewith, as the same
may
be amended from time to time (the “Lock-Up
Agreement”),
each
Voting Stockholder agrees that it shall cause each transferee of its Voting
Stock of the Company to become a party hereto and to agree in writing to be
bound by and to comply with all of the terms and provisions of this Agreement
prior to any transfer of such Voting Stock. Notwithstanding anything contained
in this Agreement to the contrary, nothing herein shall preclude the Voting
Stockholders from selling their Voting Stock pursuant to Rule 144 or an
effective registration statement.
12. No
Limitation on Other Voting Rights.
Notwithstanding any provision of this Agreement or the Lock-Up Agreement to
the
contrary, nothing in this Agreement shall limit or restrict the Voting
Stockholders from acting in their sole discretion on any matter other than
those
referred to in this Agreement.
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13. Notice.
Unless
otherwise specifically provided herein, all notices or other communications
under this Agreement shall be effective only if in writing and delivered by
hand, delivered by telecopier, or mailed by overnight courier
service:
(a) if
to the
Company or Qualmax, addressed to its principal executive offices at 000 Xxxx
Xxxxx Xxxxxx, Xxxxxx, Xxxxxx 00000, Attn: General Counsel, with a copy to Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attn: Xxxxx X. Xxxxxxxxx; and
(b) if
to
P&S, TBTE or Oregon Spirit, addressed to 0000 XX 00xx
Xxxxxx,
Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, Attn: Xxxxxx Xxxxxx, M.D., with
a
copy to Xxxxxxxx Xxxxx, Dorf & Xxxxxxx, LLC, 0
Xxxxx
Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
XX 00000, Attn: Xxxxx
X.
Xxxxx, Esquire.
Any
notice or other communication shall be deemed to be given: (i) if delivered
by
hand, on the date of such delivery; (ii) if delivered by telecopier, when
receipt is mechanically acknowledged; and if mailed by overnight courier, on
the
first business day following the date of such mailing.
14. Entire
Agreement.
This
Agreement contains the entire agreement among the parties hereto with respect
to
the subject matter contained herein and supersedes all prior oral and written
agreements and undertakings among the parties with respect to such subject
matter.
15. Governing
Law; Jurisdiction. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Delaware, without regard to the principles of the conflict
of laws thereof. Each party hereto consents and submits to the jurisdiction
of
any state or federal court sitting in Wilmington, Delaware in connection with
any dispute arising out of or relating to this Agreement. Each party hereto
waives any objection to the laying of venue in such courts and any claim that
any such action has been brought in an inconvenient forum. To the extent
permitted by law, any judgment in respect of a dispute arising out of or
relating to this Agreement may be enforced in any other jurisdiction within
or
outside the United States by suit on the judgment, a certified copy of such
judgment being conclusive evidence of the fact and amount of such judgment.
Each
party hereto agrees that personal service of process may be effected by any
means permitted by law.
16. Successors
and Assigns; Binding Effect.
All of
the terms and provisions of this Agreement shall be binding upon, shall inure
to
the benefit of, and shall be enforceable by the respective successors, assigns,
heirs and legal representatives of the parties hereto.
17. Inspection.
A copy
of this Agreement shall be filed with the Secretary of the Company and shall
be
kept with the records of the Company. For so long as this Agreement shall be
in
effect, this Agreement shall be made available for inspection by any Voting
Stockholder at the principal executive offices of the Company.
18. Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning or interpretation of this
Agreement.
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19. Severability. If
any
provision of this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions, or of such provision in any other jurisdiction, shall not in any
way
be affected or impaired thereby.
20. Facsimile;
Counterparts.
This
Agreement may be executed by facsimile and in two or more counterparts, each
of
which shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
21. Distribution.
(a) Notwithstanding
anything to the contrary set forth herein, in the event of a Distribution:
(i)
each of the Kamrat Family members agrees that he, she or it shall become a
party
hereto as a Voting Stockholder and shall be bound by and shall comply with
all
of the terms and provisions of this Agreement, and shall, from and after the
date of such Distribution, cause each transferee of his, her or its Voting
Stock
of the Company to become a party hereto and to agree in writing to be bound
by
and to comply with all of the terms and provisions of this Agreement prior
to
any transfer of such Voting Stock; and (ii) the right of Qualmax hereunder
to
designate the Qualmax Nominess shall be vested in, and based on, the unanimous
agreement of X. Xxxxxx and X. Xxxxxx. For purposes of clarification, the
distributees in a Distribution other than the Kamrat Family members shall not
be
required to become a party to this Agreement and shall not be bound by the
terms
and provisions of this Agreement.
(b) In
furtherance of the foregoing, the Kamrat Family members represents and warrants
to the other parties hereto that they currently collectively hold sixty-two
percent (62%) of the outstanding common stock, par value $.001 per share, of
Qualmax (“Qualmax
Common Stock”).
Each
of the Kamrat Family members agrees that, prior to a Distribution, he, she
or it
shall not transfer any shares of its Qualmax Common Stock unless the transferee
thereof shall agree in writing to become a party hereto subject to the same
restrictions and obligations as the Kamrat Family members and to be bound by
and
to comply with this Section
21
prior to
any transfer of such Qualmax Common Stock.
22. Termination.
(a) In
the
event that (i) the Tranche B-1 Closing Condition is satisfied and P&S fails
to purchase the Tranche B-1 Shares at the Tranche B-1 Closing or (ii) the
Tranche B-2 Closing Condition is satisfied and P&S fails to purchase the
Tranche B-2 Shares, or the Aggregate Tranche B Shares, as applicable, at the
Tranche B-2 Closing, the terms of this Agreement shall terminate and be of
no
further force and effect unless, not less than fifteen (15) days after receipt
of written notice of failure to purchase from the Company, P&S has purchased
the applicable Tranche B-1 or Tranche B-2 Shares. The Company’s rights under
this Section 22(a) upon a failure by P&S to purchase as required by the
Subscription Agreement are in addition to any other rights or remedies available
to the Company, at law or at equity, all of which rights and remedies may be
exercised cumulatively.
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(b) In
any
event, the terms and provisions of this Agreement shall terminate and be of
no
further force and effect immediately following the election of directors at
the
2009 annual meeting of stockholders of the Company.
(c) Notwithstanding
the provisions of Sections
22(a)
and
(b),
upon
termination of this Agreement Section
21
hereof,
which shall survive, and the parties hereto agree that the terms and provisions
of this Agreement will be further amended and restated to reinstate the terms
and provisions of the Original Agreement (subject to the survival of
Section
21
hereof,
which provisions shall be deemed to replace and supersede the correlative
provision in the Original Agreement), and such amendment and restated shall
be
deemed to occur automatically and without any further action, consent or
approval on the party of any party hereto.
[THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Voting
Agreement to be duly executed on the date first above written.
COMPANY:
NEW
WORLD
BRANDS, INC.
By:_____________________________
Name: M.
Xxxxx Xxxxxx
Title: CEO
VOTING
STOCKHOLDERS:
QUALMAX,
INC.
By:_____________________________
Name: M.
Xxxxx Xxxxxx
Title: CEO
P&S
SPIRIT, LLC
By:____________________________
Name: Xxxxxx
Xxxxxx, M.D.
Title: Manager
XXXXXX
& XXXXXX XXXXXX, TBTE
By:____________________________
Xxxxxx
Xxxxxx, M.D.
By:____________________________
Xxxxxx
Xxxxxx
OREGON
SPIRIT, LLC
By:___________________________
Name: Xxxxxx
Xxxxxx, M.D.
Title: Manager
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Solely
for purposes of Section
21
hereof:
__________________________
M.
XXXXX
XXXXXX
__________________________
XXXX
XXXXXX
__________________________
XXXX
XXXXXX
__________________________
XXXXX
XXXXXXXX
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