EXHIBIT 5
VOTING AGREEMENT
VOTING AGREEMENT, dated as of June 29, 2001 (this "Voting
Agreement"), between Z-Tel Technologies, Inc., a corporation organized under the
laws of Delaware (the "Company") and each stockholder of the Company who
executes the signature page to this Voting Agreement or a counterpart copy
thereof (collectively, the "Stockholders").
WHEREAS, pursuant to the Stock and Warrant Purchase Agreement,
dated June 29, 2001 (the "Investment Agreement"), among the Company, The 1818
Fund III, L.P. (the "Fund"), and certain additional investors listed therein
(the "Additional Investors" and, together with the Fund, the "Investors"), the
Investors have agreed severally to purchase shares of the Company's 12% Junior
Redeemable Convertible Preferred Stock, Series G, par value $.01 per share, (the
"Series G Junior Preferred");
WHEREAS, certain rights of the Series G Junior Preferred are
contingent upon approval of the Company's stockholders; and
WHEREAS, the Company intends to submit the terms of the Series
G Junior Preferred and the issuance thereof and the terms of the Investment
Agreement and the transactions contemplated thereby (collectively, the
"Transaction") to a vote of the Company's stockholders; and
WHEREAS, each Stockholder has the Power to Vote (as defined
below) at least those shares of Company Stock (as defined below) identified
opposite such Stockholder's signature to this Voting Agreement; and
WHEREAS, in order to induce the Company and the Investors to
enter into the Investment Agreement, the parties to this Voting Agreement are
willing to agree to vote their respective Voteable Shares (as defined below) in
favor of the Transaction.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained herein and for other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. DEFINED TERMS.
(a) The term "COMPANY STOCK" means the Company's common
stock, par value $.01 per share ("Common Stock"), the Company's Series D
Convertible Preferred Stock ("Series D Preferred Stock"), and the Company's 8%
Convertible Preferred Stock, Series E ("Series E Preferred Stock").
(b) The term "POWER TO VOTE" means, as to any Company
Stock, the power or legal authority (whether by proxy, on an as-converted basis
by reason of ownership of the Company's preferred stock or otherwise) to vote,
or cast the votes entitled to be cast by, for or with respect to, such Company
Stock.
(c) The term "VOTEABLE SHARE" means:
(i) with respect to any Stockholder, (1) any
share of Company Stock that such Stockholder has the Power to Vote on
the date hereof, (2) any share of Company Stock as to which such
Stockholder acquires the Power to Vote after the execution of this
Voting Agreement, and (3) any share referred to in the preceding
clauses (1) and (2) that such Stockholder transfers to any affiliate of
such Stockholder after the date of this Voting Agreement (except to the
extent that such Stockholder was required to make such transfer and no
longer has the Power to Vote such share); and
(ii) with respect to the Company, any share of
Company Stock, if any, that the Company has the Power to Vote;
provided, however, that the term "Voteable Share" does not include any
share of Series G Junior Preferred; and
provided further, however, that, with respect to any Stockholder or the
Company, Voteable Shares do not include any share of Company Stock (i)
that is held by a person other than a Stockholder, and (ii) as to which
such Stockholder is subject to voting instructions given by such other
person.
2. REPRESENTATIONS OF STOCKHOLDERS AND THE COMPANY.
Each of the Stockholders and the Company, severally and not
jointly, represents that (i) it is the record and beneficial holder of (or
otherwise has the Power to Vote) those shares of Company Stock identified
opposite such party's signature to this Voting Agreement; (ii) it has full legal
power, authority and right to make, enter into and carry out the terms of this
Voting Agreement; and (iii) this Voting Agreement has been duly executed and
delivered by it, and constitutes a valid and binding obligation of it,
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
3. AGREEMENT TO VOTE SHARES.
(a) Each party to this Voting Agreement hereby agrees to
vote all its Voteable Shares at every meeting of shareholders of the Company at
which the Transaction is considered and at every adjournment thereof, including
the meeting contemplated by the Investment Agreement, and whether in connection
with a vote of all shares or a vote of any series or class of shares voting
separately, or any consent in lieu thereof (i) in favor of adoption and approval
of the Transaction and (ii) against any action or agreement that would compete
with, impede, or interfere with the adoption and approval of the Transaction.
(b) Each Stockholder severally agrees that it will not
transfer any Voteable Shares prior to the termination of this Voting Agreement
unless the transferee has agreed in writing with or expressly or the benefit of
all the parties to this Voting Agreement to vote the transferred Voteable Shares
as provided in Section 3(a) hereof.
Voting Agreement Page 2
4. TERMINATION. This Voting Agreement and all the obligations of
the parties hereunder shall terminate upon the earliest to occur of (i) the
Stockholder Approval Certification Date (as that term is defined in the
Certificate of Designation with respect to the Series G Junior Preferred filed
with the Secretary of State of the State of Delaware) or (ii) December 31, 2001.
5. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. Each party to this Voting
Agreement severally represents and warrants that such party has not, and will
not hereafter and prior to termination of this Voting Agreement, enter into any
agreement with respect to any Company Stock that is inconsistent with the rights
granted and obligations imposed by this Voting Agreement or otherwise conflicts
with the provisions hereof.
(b) SPECIFIC PERFORMANCE. Each party hereto severally
acknowledges that it will be impossible to measure in money the damage to any
other party if a party hereto fails to comply with any of the obligations
imposed by this Voting Agreement, that every such obligation is material and
that, in the event of any such failure, the other parties will not have an
adequate remedy at law or damages. Accordingly, each party hereto severally
agrees that injunctive relief or other equitable remedy, in addition to remedies
at law or damages, is the appropriate remedy for any such failure and will not
oppose the granting of such relief on the basis that the other party has an
adequate remedy at law. Each party hereto severally agrees that it will not
seek, and agrees to waive any requirement for, the securing or posting of a bond
in connection with any other party's seeking or obtaining such equitable relief.
This Voting Agreement is for the benefit of, and shall be enforceable at law and
in equity by, every party to this Voting Agreement.
(c) AMENDMENTS AND WAIVERS. This Voting Agreement may not
be amended except by an instrument in writing signed by all parties hereto.
(d) NOTICES. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier, courier service or personal delivery:
if to the Fund at the following address:
The 1818 Fund III, L.P.
c/o Brown Brothers Xxxxxxxx & Co.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx
Voting Agreement Page 3
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
if to the Company at the following address:
Z-Tel Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
with a copy to:
Trenam Xxxxxx
0000 Xxxx xx Xxxxxxx Xxxxx
Xxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxx Xxxx, Esq.
if to the Stockholders to the address on the
Corporation's record books
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; when delivered
by courier, if delivered by commercial overnight courier service; five business
days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
(e) SUCCESSORS AND ASSIGNS. This Voting Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto and shall not be assignable by the Stockholders or the
Company without the written consent of the Fund, or by the Fund (other than to
an affiliate) without the written consent of the Stockholders and the Company.
(f) COUNTERPARTS. This Voting 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 agreement.
(g) HEADINGS. The headings in this Voting Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Voting Agreement Page 4
(h) GOVERNING LAW. THIS VOTING AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK. Each party to this Voting Agreement hereby irrevocably agrees
that any legal action or proceeding arising out of or relating to this Voting
Agreement or any agreements or transactions contemplated hereby shall be brought
only in the courts of the State of New York located in New York City or of the
United States of America for the Southern District of New York and hereby
expressly submits to the personal jurisdiction and venue of such courts for the
purposes thereof and expressly waives any claim of improper venue and any claim
that such courts are an inconvenient forum. Each party hereby irrevocably
consents to the service of process of any of the aforementioned courts in any
such suit, action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to the address set forth in Section 4(d),
such service to become effective 10 days after such mailing.
(i) SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(j) ENTIRE AGREEMENT. This Voting Agreement is intended
by the parties to be a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings with respect to such subject
matter, other than those set forth or referred to herein. This Voting Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(k) ATTORNEYS' FEES. In any action or proceeding brought
to enforce any provision of this Voting Agreement or where any provision hereof
is validly asserted as a defense, the successful party shall, to the extent
permitted by applicable law, be entitled to recover reasonable attorneys' fees
in addition to any other available remedy.
(l) FURTHER ASSURANCES. Each party shall cooperate and
take such action as may be reasonably requested by the other party in order to
carry out the provisions and purposes of this Voting Agreement.
Voting Agreement Page 5
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Voting Agreement as of the date first written above.
Z-TEL TECHNOLOGIES, INC.
BY: /s/ D. Xxxxxxx Xxxxx
---------------------------------------
D. Xxxxxxx Xxxxx, President and CEO
THE 1818 FUND III, L.P.
BY: XXXXX BROTHERS XXXXXXXX, general partner
BY: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxx, Partner
4,166,667 Shares of Series E Preferred Stock
Voting Agreement Page 6
OTHER INVESTORS:
/s/ D. Xxxxxxx Xxxxx
--------------------------------------------
D. Xxxxxxx Xxxxx
1,860,800 Shares of Common Stock
G/CJ INVESTMENTS, L.P.
BY: G/CJ Investments, Inc.,
its general partner
BY: /s/ D. Xxxxxxx Xxxxx
---------------------------------------
D. Xxxxxxx Xxxxx, President
5,472,500 Shares of Common Stock
G/CJ INVESTMENTS, INC.
BY: /s/ D. Xxxxxxx Xxxxx
---------------------------------------
D. Xxxxxxx Xxxxx, President
27,500 Shares of Common Stock
FULMEAD VENTURES LIMITED
BY: X. Xxxxxx
---------------------------------------
ITS: Director
---------------------------------------
2,348,520 Shares of Common Stock
250,000 Shares of Series D Preferred Stock
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
1,602,403 Shares of Common Stock
SEWANEE Z-TEL PARTNERS, L.P.
BY: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxx
ITS: Chief Manager of GP
---------------------------------------
1,304,250 Shares of Series D Preferred Stock
Voting Agreement Page 7
GRAMERCY Z-TEL, L.P.
BY: /s/ Xxxxxxxx X. Xxxxxxxxx
---------------------------------------
ITS:
---------------------------------------
1,041,666 Shares of Series D Preferred Stock
GRAMERCY Z-TEL LLC
BY: /s/ Xxxxxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxxxxx
ITS:
---------------------------------------
3,074,280 Shares of Common Stock
--------------------------------------------
Xxxxx X. Kitchen
1,302,973 Shares of Common Stock
/s/ Xxxxxxx X. XxXxxxxxx
--------------------------------------------
Xxxxxxx X. XxXxxxxxx
747,490 Shares of Common Stock
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
120,000 Shares of Common Stock
Voting Agreement Page 8
